It’s often said that if you have seen one family office, you’ve seen one family office. Indeed, Canada’s family office landscape is as diverse as the families that utilize these increasingly common management structures.
Yet, many family office structures—single-family or multi-family—share structural commonalities worth examining, especially as more entrepreneurial families attain ultra-high-net-worth status.
One report from Deloitte suggests the landscape is expanding rapidly, with the number of family offices globally forecast to grow to nearly 11,000 by 2030—up from about 8,000 in 2024.
Canadian families are likely at the edge of that growth, as more recognize family offices’ value proposition, says Dan Riverso, chief executive officer of Jesselton Capital Management Inc., based in Toronto.
“People are asking the question, ‘What do I do with all this wealth?’” Successful Canadian entrepreneurs are behind their counterparts in the United States and Europe on establishing family offices, he adds.
Those jurisdictions saw explosive growth after the 2008 financial crisis, when interest rates fell to near zero and private equity began snapping up mid-market businesses, says Mark Tepsich, head of family office design and governance strategy at UBS in New York City. “You saw the rise of family offices as families sold their businesses to private equity.”
For Canadians now faced with managing substantial wealth, grasping how family offices are structured is helpful in deciding whether this type of organization fits their needs, he adds.
Single-family versus multi-family offices
Family office structures can be charted on a three-dimensional chart: the amount of assets, the number of generations, and the level of sophistication.
”You can probably take every family office in Canada and plot them on that three-dimensional chart,” says Riverso, who formerly ran a family office and now provides investment fund services for family offices through Jesselton.
A minimum net worth is required to make the cost, which can run into the millions of dollars annually, worthwhile. “Running a family office is often a break-even enterprise,” Tepsich says. A family requiring a multi-family office’s service may have tens of millions of dollars in assets, while a single-family office often needs a minimum of $100 million, he adds.
Some single-family offices often develop useful processes for managing their specific family’s wealth that can then be scaled up for other families. “When the value proposition is strong enough, it can grow to external clients,” says Dasha G. Smyth, chief executive officer of PortfolioXpressWay in Toronto.
One advantage for an SFO that expands into the multi-family office space is they can spread out the costs among clients, benefiting from economies of scale, adds Smyth, whose company provides a wealth management platform designed for multi-family offices.
How is a family office staffed?
This varies greatly, Riverso says, citing one particular single-family office comprising just one individual managing the family wealth. “He sold his company, was the chief financial officer there, and now he’s essentially the family office CFO and lone full-time employee,” he adds.
With more wealth comes greater complexity, especially as time passes, and new generations become involved in financial affairs. At that point, a family office must scale up staff to meet growing demand.
“We often see family offices at this point outsource a lot of services,” Tepsich says. That generally includes investment management, but it can also involve legal, estate, tax and cross-border advice.
Other families have so much wealth, and are so unique, that their family offices must have larger dedicated staffs, which can include C-suite roles.
“Their wealth is incredibly complex, involving billions, often spanning five or more generations,” Riverso says.
Many families may hire their own investment oversight managers—like a chief investment officer—and then hire outside experts for legal and tax needs in part-time roles. At the same time, these family offices often have a small administrative staff, much like a small or medium-sized enterprise does, Smyth says.
“Running an office can involve a lot of manual work,” she says about reporting requirements, noting financial services remain very “paper-based.”
Good governance
Formal governance structures may not be necessary—though still a good idea—for first-generation-only family offices. Yet as more family members are added to the mix, “that’s when governance and family councils are necessary,” Tepsich says.
These structures provide guidance for regular meetings among family members, what individuals’ responsibilities are regarding family-owned businesses, and decisions for and access to various wealth assets, he adds.
Good governance helps families establish road maps for what they seek to accomplish with their wealth, Riverso says.
Some families, for example, set out plans for tax-efficient trusts for legacy wealth needs. Others may create governance defining how future generations are supported by family wealth. That may include setting up registered retirement savings plans (RRSP) and tax-free savings accounts (TFSA) as young members become adults.
“Families can build out these structures, including investment policy statements, and then their family office might, for example, look to third-party management to invest the money,” Riverso adds.
Governance is also increasingly important for younger generations regarding technological access to the family office networks that include its data for investment and business holdings.
“Good, comprehensive governance helps a family continue to grow and adapt, including evolving with technological change,” Tepsich says.
Keeping up with tech
Technology is increasingly central to how a family office is structured, especially in the artificial intelligence age. “AI can automate a lot of administrative tasks, so the potential is there to make family offices leaner,” Tepsich notes. Yet it also entails new cybersecurity risks, says Adam Evans, chief information security officer at RBC, based in Toronto.
“We saw this with cloud,” he says. Many family offices—especially those with tech-savvy younger adults—are eager to leverage new technologies.
But there is a risk of shooting themselves in the foot and asking why afterward, Evans adds. “Most family offices don’t necessarily have the skills or resources to safely enable highly tailored AI strategies in their organization.”
Again, governance structures help ensure safe use of AI technology, protecting family offices’ most valuable resource: data.
Turning to third-party providers of platforms like PortfolioXpressWay can help family offices safely leverage evolving technologies, including safe management of financial assets and consolidated reporting.
“Family office clients today really expect to log in from anywhere at any time to see their net worth,” Smyth says. Yet this technological integration can exceed the capabilities of a single-family office, which often has only a single technology manager.
Companies like PortfolioXpressWay allow family offices to extend their tech capabilities, Smyth says.“Ultimately, family offices want a tech solution they trust to handle their data safely.”
Bespoke by nature
Although most family offices bear structural similarities, their individual design generally varies according to a specific family’s needs. “Each family is different regarding philosophy, how they made their wealth, their balance sheet, their geography and jurisdiction, and how they want to work together,” Tepsich says.
That’s why trying to define the family office landscape, he adds, “is a bit like being a cultural anthropologist.”
Joel Schlesinger is a Winnipeg-based freelance writer who has written for Canadian Family Offices since 2021. Specializing in investment, wealth advice, real estate and personal finance, he is also a regular columnist for the Winnipeg Free Press, and his work regularly appears in The Globe and Mail, Calgary Herald and Edmonton Journal.
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