Cost is a content that every family must understand. The cost of supervision and compliance reporting will remain high, which means that the amount of assets under the management of the family office needs to be large enough to offset these fixed costs.

If the family office operates in a central area with a mature market, legal and tax structure, its functions will be better utilized.

In order to solve the problem of high operating costs of family offices, multiple families usually set up a multifamily office (multifamily offices, MFOs), that is, several families centrally manage their wealth. These multi-family offices are usually led by the originating family. In a multi-family office, all assets are placed under one umbrella. However, in general, multi-family offices serve multiple families with different family sizes, wealth, and maturity. This means that this model may have such a risk that compared to the one-to-one proprietary services provided by a single family office, individual families may not be able to obtain personalized advice consistent with their level under the alliance family office model.

When considering the establishment of a family office, some people regard some potential positives as negatives. This tendency is particularly common in the following areas

• Dedication to privacy

• Some families may hesitate to integrate wealth information into a centralized family office structure

• Trust in EAM of external asset managers

• The establishment of a family office often depends on the family’s trust and acceptance of the external asset manager EAM. However, trust usually comes from a long-term cooperative relationship with external asset managers

• ​Expectation of return