The Hard Truth About the Multi-Family Office Model

In this short video, TFOA founder Marc Sharpe shares the hard truth about the multi-family office model and what families should weigh before choosing one.

It’s a companion to TFOA’s whitepaper on multi-family offices.

Transcript

A Multi Family Office, viewed honestly, is a oftentimes just a Registered Investment Advisor with a worse business model.

That sounds harsh. Hear me out. An RIA charges fees on assets under management. Clean revenue model. The Multi Family Office charges the same fees, but tacks on a host of additional services. Governance. Education. Philanthropy coordination. Next-generation planning. Those services are the family office part. They’re also the part that usually doesn’t make money.

So inside every MFO there’s a tension. The investment side pays the bills. The family office services attract the families. The math creates pressure to underinvest in the very things that make the MFO worth more than a regular RIA.

If you’re evaluating a Multi Family Office, ask one question. How do they get paid for the non-investment work? If the answer is “it’s bundled,” you can guess which side gets cut when budgets get tight.