Thought PiecesAugust 24 2020

What is the History of Family Offices?

2 mins read

Written by Wigmore Firms

Northwood Family Office states, “You can probably go back to the 6th century to find the conceptual roots of the family office. At that time, the major-domo (or highest level domestic staff) was a person who would represent, make arrangements for, or take charge of the affairs of a noble family and its wealth as a family manager or administrator. The modern concept and understanding of family offices was developed in the 19th century. In 1838, the family of J.P. Morgan founded the House of Morgan, which managed the family’s assets, and in 1882, the Rockefellers founded their family office, which continues today.”

Pitcairn, one of our Wigmore members, was established by the second generation as a family office almost a century ago in 1923 as a way to manage their collective assets and advisors, consolidate costs, and improve efficiencies.

“Family offices have come into their own in the last 30 years. As families have become wealthier – through business growth or investments – and as they grew in size – through marriage and childbirth – their affairs often became more complex and required dedicated management. What was easy to manage, with just a nuclear family and modest wealth, became a full-time job when there were multiple generations and substantial non-business wealth. So some wealthy families brought in a trusted advisor – often the family lawyer or accountant, or perhaps a banker or investment manager – to help them manage and coordinate the various components of their family and financial lives. These included investments, trusts, tax planning, family education, wealth transition and financial administration. In some cases, as the workload grew, this person would bring on other staff to assist them in looking after the family. Thus, the family office was formed.”

It is hard to define how many family offices there are, in 2019 Campden FB reported 7,300 single family offices worldwide[1]. Despite this statistic, the definition and the actual number of single-family offices is unknown, but seems to be about 7,500- 10,000 globally (a ten-fold increase since 2008) with assets under management of $6 trillion (EY, Campden). There are far fewer multi-family offices. If you constrain the list to purely North American firms that have $1B AUM, serve a substantial group of clients with $30+ million, and offer an integrated suite of services, the total is under 150 (J.E. McLaughlin).

This overview piece is a collaboration of thoughts from each Wigmore firm following these questions being asked more frequently than you may think. If you would like any further information regarding the Wigmore Association please contact us through the website.