Sustaining Generational Wealth: Exploring the benefits of a Family Office
A Family Office is an organised way to manage a family's wealth, investments and legacy, typically motivated by the desire to invest together across family branches and generations. The structure and setup of a Family Office can vary and there is not a one-sized-fits-all approach. The right structure depends on factors such as the size of wealth, complexity of investments, number of generations and households, and the family’s overarching purpose and vision.
Families may consider creating a Family Office following a significant financial event or when wealth reaches a level that requires more coordination and oversight. Common triggers include:
A large equity event, such as the sale of an operating business or a major asset.
Significant positive cash flows from an ongoing business.
A balance sheet that can support liquidity planning and strategic investment diversification.
When these conditions arise, it becomes valuable to formalise the family’s governance, reporting, and operating structures — ensuring both financial and non-financial goals are met across generations.
There are three common types of Family Office structures:
Virtual Family Office (VFO): A Virtual Family Office is the least structured option where the family collaborates with a team of different advisors, which can include existing and new. Usually, there are no dedicated employees, and services are typically outsourced to various professionals such as investment advisors, accountants, lawyers, bookkeepers, and family succession and dynamics specialists. Regular meetings, often quarterly or half-yearly, are held to discuss and manage the family's wealth.
VFOs are usually suitable for:
first or second-generation families;
families with lower levels of complexity or less households to manage;
those with wealth under $100 million; or
those with smaller quantities of investments or asset classes to manage.
Advantages:
Lean, cost-effective, and flexible structure.
Minimal overhead while maintaining access to professional advice.
At Lineage, we often see VFOs evolve out of the family’s operating business. That is, a family’s private affairs and investments are generally looked after by the operating business’ finance team and at some stage, usually 2nd generation, the family decide that they would like their affairs to be discreet, and/or the personal items have begun to “clog up’’ the processes and procedures within the business.
In this case, we help families:
Define what functions to transition away from the business.
Implement new processes and governance structures.
Provide bookkeeping, investment reporting, and meeting facilitation.
Develop Investment Policy Statements and review asset protection and estate planning.
Outsourced Family Office (OFO): An Outsourced Family Office is a hybrid model, increasingly common in Australia, where families engage a specialist external provider (like Lineage) that delivers a wide range of in-house capabilities without requiring the family to build and manage their own office.
An OFO typically offers a full suite of in-house services, including governance, tax, compliance, structuring, reporting, philanthropy, and strategic oversight. It also coordinates with additional advisors, such as investment managers, lawyers, or Chief Investment Officers (CIOs), to ensure that all aspects of the family’s affairs are effectively managed. This approach provides families with access to a fully developed office framework without the need to build and manage one from scratch.
An OFO is typically suitable for:
Families with moderate complexity who do not justify the cost of a full SFO.
Families with wealth under approximately $300 million.
Those seeking a professional, coordinated approach to wealth management and governance.
Advantages:
Combines the expertise of a multidisciplinary team with neutrality from family dynamics.
Provides access to broad capabilities and networks without needing to “reinvent” an office.
Offers scalability as the family’s needs evolve.
At Lineage, we provide an extensive range of services that a Family Office typically requires, such as:
Helping families define their purpose, values, and strategy.
Establishing governance frameworks such as Family Councils and Investment Committees.
Managing governance, compliance, and investment reporting.
Collaborating with the family’s existing investment and legal advisors for a seamless experience.
Facilitating introductions to trusted lawyers, investment managers, or CIOs where required.
This structure allows families to maintain control while leveraging our in-house expertise and network to achieve the best possible outcomes.
Single Family Office (SFO): A Single Family Office is the most comprehensive and autonomous structure, created solely to serve one family. It typically includes dedicated employees, a physical office, and internal systems to manage investments, administration, governance, and family support functions.
A SFO typically comprises a dedicated in-house team responsible for managing accounting, tax, compliance, investments, concierge services, and governance. This structure provides full control over both financial and non-financial affairs, ensuring that all aspects of the family’s wealth and operations are aligned with their long-term objectives. SFOs often establish formal governance frameworks, such as Family Councils and Investment Committees, to support decision-making, communication, and accountability across generations.
We work with SFOs who have a small number of in-house employees, such as an accountant and bookkeeper, while relying on Lineage or other external advisors for additional services.
Other SFOs may have a larger number of in-house employees, including a Chief Investment Officer (CIO), investment analysts, and additional professionals.
SFOs are best suited for multi-generational families:
Supporting multiple households
Families with wealth exceeding approximately $200 million.
Families with complex assets or diverse investment portfolios.
Those seeking full control, confidentiality, and customisation.
Advantages:
Maximum control and privacy.
Deep alignment with the family’s vision, values, and objectives.
Ability to customise operations and governance structures fully.
At Lineage, we work with SFOs of all sizes — from those with a small internal team (e.g., accountant and bookkeeper) to those with larger teams, including Chief Investment Officers (CIOs) and investment analysts.
We often support SFOs by helping define strategy and structure:
Strategy: Outlining the long-term vision of the family, including both financial and non-financial goals such as family communication, next-generation engagement, and leadership development.
Structure: Establishing governance frameworks (e.g. Family Councils, Investment Committees) and documenting essential policies such as Family Constitutions, Investment Policy Statements, and estate planning.
In our experience, while many SFOs focus heavily on operational management, the most successful ones invest in defining and documenting strategy and governance, ensuring the Family Office remains aligned with the family’s long-term purpose.
While the three Family Office models — VFO, OFO, and SFO — each offer distinct advantages, the right structure ultimately depends on the family’s wealth, complexity, and goals.
At Lineage, we work alongside families at every stage, from those establishing their first formal framework to those optimising multi-generational Family Offices, helping ensure that structure, strategy, and operations are aligned for long-term success.
Michelle De Lucia, Partner at Lineage Group
Over two decades working with business families and family offices has given Michelle a unique perspective to both family and business issues. And having worked as a CFO for a large family office, Michelle has hands-on knowledge of reporting, systems, policies and procedures specific to successfully set up or manage a complex family office.
To find out more about how we can help with your individual family office requirements, please get in touch to arrange a confidential discussion.