In Family Businesses “family blockholder conflicts” — tensions within groups of family owners — often necessitate sophisticated management approaches. “To curb family blockholder conflicts, families often separate the family from its assets and install intermediary governance structures” a practice that underscores the role of Family Offices in harmonising individual family interests with collective goals (Zellweger & Kammerlander, 2015). Family offices are also instruments for managing wealth and offering tailored strategies that ensure the longevity and prosperity of the Family Business across generations. However, the architecture of these offices can vary significantly, designed to meet specific familial and business needs. In this article, we’ll explore the three primary types of family offices — Legal, Asset Management, and Lifestyle — including their functions, strengths, and inherent challenges. By understanding these variations, families can align their governance structures more closely with their long-term objectives, an essential strategy discussed in our previous exploration, “Strategic Governance in Family Offices“.

Legal Family Office: Bridging Generations through Strategic Governance

The Legal Family Office provides a comprehensive hub for managing family wealth and preparing for intergenerational wealth transfer. This type is ideally suited for active families with business interests spanning multiple generations and multiple jurisdictions. The emphasis here is on a governance framework that supports the complex needs of wealth preservation, tax planning, accounting and family business management. This type is more governance-driven than the other types of Family Offices, in the need to harmonise family interests with business operations and ensure that decisions support long-term wealth sustainability and family unity. This form of Family Office is highly recommended for families looking to maintain active engagement with their business entities and ensure a smooth transition of assets and values to future generations.


  • Holistic Management: Offers a comprehensive approach to managing family wealth, including investments, estate planning, and family business affairs, which provides a cohesive strategy for preserving and growing family assets.
  • Intergenerational Focus: Specifically designed to facilitate the transfer of wealth and values across generations, helping to ensure long-term family legacy and cohesion.
  • Enhanced Control: Allows families to maintain active involvement and oversight over their collective assets and business interests, aligning operations closely with family goals.


  • Complexity in Implementation: Requires sophisticated systems and expertise to manage diverse assets and legal structures, which can be resource-intensive. A potential solution is to create or join a multi Family Office that serves multiple families simultaneously or then outsource non-core competencies to trusted external advisors.
  • Potential for Conflict: external advisors getting involved in complicated topics such as succession, the distribution of roles and responsibilities, and family values (or the lack thereof, respectively diverging interests) may lead to conflicts among family members.
  • Governance Overhead: Needs a robust governance structure to manage varied and often complex family dynamics and business operations, which can be cumbersome to administer.

Asset Management Family Office: Focused Financial Stewardship

Commonly encountered in the Family Office landscape, the Asset Management Family Office focuses primarily on managing the family’s financial assets. This type of Family Office is often led by former bankers or investment managers and is often established after the family has seen a liquidity event, i.e. sold, for whatever reason, the family business. The governance structure here revolves around financial risks and their mitigation, with strategies designed to maximise returns while protecting the family’s capital from market volatility and other financial risks. This approach is less about family dynamics and more about strategic asset allocation, investment performance, and financial risk management, making it suitable for families that prefer a hands-off approach to their investment portfolio.


  • Professional Management: experienced financial professionals can offer expert oversight of the family’s investment portfolio and asset allocation strategies.
  • Risk Mitigation: Focuses primarily on financial risks, employing advanced tools and strategies to safeguard assets.
  • Efficiency: Streamlines the management of financial assets, potentially yielding higher returns due to professional oversight and strategic investment choices.


  • Limited Scope: Primarily focuses on financial assets and may overlook the broader needs of the family, such as intergenerational planning and non-financial legacy concerns. Here it is best to outsource to specialized advisors. One of the challenges is for the family (and the family office) to see this requirement early enough to mitigate damage being done.
  • Dependence on Market Conditions: Heavily reliant on market performance, which might introduce significant volatility and risk to the family’s wealth. Mostly, the family will be minority shareholders and thus have no influence over dividend policies. Furthermore, families that invest in illiquid investments (Private Equity and Venture Capital) will see a considerable lock-in.
  • Potential Misalignment: The risk of misalignment between the financial managers’ strategies and the family’s long-term goals, especially if communication is not strong, the family has not clearly enough defined these themselves or it is left highly ambiguous.

Lifestyle Family Office: Catering to Personal and Family Needs

The rarest type of Family Office, the Lifestyle Family Office, functions similarly to a high-end concierge service, handling everything from travel arrangements and property management to more personalised services that cater to the unique lifestyle needs of family members. In this model, governance requires a clear structure to manage expenditures and ensure that the services provided align with the family’s objectives and privacy requirements. This type of office is perfect for families who value discretion and efficiency in managing their personal affairs and day-to-day life.


  • Personalised Services: Offers tailor-made services to meet the daily and luxury needs of family members, enhancing their quality of life.
  • Privacy and Convenience: Handles personal and sensitive tasks discreetly and efficiently, ensuring privacy and freeing up time for family members to focus on other interests.
  • High Level of Customization: Able to adapt quickly to the changing personal needs of family members, providing flexibility not typically found in more traditional corporate structures.


  • High Cost: Managing such personalised services can be costly, especially when the demands are extensive or require global coordination.
  • Less Focus on Financial Growth: Concentrates more on lifestyle management rather than financial asset growth, which may lead to underutilization of potential wealth accumulation strategies.
  • Risk of Over-Servicing: There is a risk of becoming too service-oriented, potentially leading to inefficiencies or unnecessary expenditures that do not add value proportionate to their cost.

Conclusion: Choosing the Right Family Office

Each type of Family Office serves distinct purposes and comes with its own set of advantages and drawbacks. The choice of which type to establish or engage depends heavily on the family’s immediate and future needs, values, and objectives. By carefully considering the pros and cons of each option, families can better align their choice of Family Office with their long-term visions, ensuring that their wealth and personal affairs are managed effectively and thoughtfully.


Zellweger, T. and Kammerlander, N. (2015) ‘Family, Wealth, and Governance: An Agency Account’, Entrepreneurship Theory and Practice [Preprint]. Available at: