There’s a general consensus within the private wealth industry that the number of single-family offices is booming worldwide. More telling, the amount of money they’re controlling is growing at an even greater rate. Professionals who monitor and pontificate on these numbers tend to define single-family offices as investment vehicles.

While many single-family offices can be characterized as private investment firms that sometimes incorporate non-investment services, others can be more broadly defined. A single-family office, for example, might address financial and lifestyle issues without dealing with investments or selecting money managers.

The exceptionally affluent are increasingly creating single-family offices to deal with the various needs and preferences of exceptionally affluent families. For example, a number of them provide governance and oversight of family business interests. With many of the ultra-wealthy concerned about their heirs’ ability to deal with the family fortune—including in areas such as philanthropy—the single-family office is sometimes being used to educate the next generation.

The cost of running a family office varies considerably. Although single-family offices take many forms, they usually fall into one of two broad categories:

    • Single-family offices that are dedicated to a single, very wealthy family and the employees of the firm. The families can range from multiple generations to lone individuals.
    • Single-family offices that are created and structured to ensure control. They’re established and managed to maximize control over information and professional relationships.

Precisely defining the scale and scope of the single-family office universe is pretty much impossible. Still, the anecdotal evidence leads to the conclusion that single-family offices are booming.

Richard. J Flynn is managing principal of the Rothstein Kass Family Office Group.