Arman Salavitabar, CFA

Founding Partner, FundFront

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10 Mistakes to Avoid When Setting Up Your Family Office

For families establishing a family office, the objective is typically to gain control, create clarity and build a structure that supports long-term goals without introducing unnecessary complexity. Yet, without the right foundation, many families fall into common traps that can make the family office feel more like a burden than a benefit. A lean family office should provide freedom and support, not a bureaucracy.

This article outlines ten mistakes that families often make when building their office, and how to avoid them to create an efficient, cost-effective and values-aligned structure.

1. Failing to Establish a Governance Framework

Without a governance framework, a family office risks drifting into disorder. Clear rules around decision-making, responsibilities, and oversight are foundational to long-term success. Families sometimes avoid governance for fear of rigidity, but well-designed frameworks actually bring flexibility and accountability. Even a basic structure can provide guidance, reduce ambiguity and create consistency in how the family makes decisions together.

2. Hiring Full-Time Staff for Every Function

One of the most common missteps is attempting to replicate the traditional model of a large, full-time internal team. Most families in this range do not need permanent, in-house specialists across every function. Full-time hires are expensive and often underutilised. A better approach is to outsource selectively, bringing in trusted professionals when needed, while focusing internal roles on responsibilities that truly add value. This strategy keeps overhead low while maintaining access to high-quality expertise.

3. Using the Same Entity to Hold Assets and Employ Staff

Combining employment and asset-holding functions under a single legal entity may seem convenient but can lead to complications. For tax, liability, and administrative reasons, it is essential to separate the administrative entity, used for hiring and operational matters, from the structures that hold family assets. This separation offers clearer oversight, simplifies compliance and ensures the family office operates with agility and protection.

4. Managing Every Staff Member Directly

While it may seem ideal to have a direct line to each person involved in the office, this quickly turns into a full-time job. Families can find themselves chasing updates, managing timelines, and reviewing details rather than focusing on higher-level strategic matters. Appointing a trusted CEO or director to oversee day-to-day operations and be the main point of contact for the family allows the family to delegate with confidence and maintain strategic oversight without micromanagement.

5. Allowing Service Providers to Set the Agenda

Many families defer too much control to external providers, lawyers, banks, consultants, because these professionals present ready-made solutions. But starting with provider-driven agendas risks misalignment. Instead, begin by defining your family’s priorities and vision. Then, bring in the right partners to execute around that foundation. The goal is to stay in the driver’s seat, using service providers as enablers, not decision-makers.

6. Maintaining Too Many Private Banking Relationships

It may feel prudent to maintain relationships with multiple banks, but doing so often leads to diluted service, fragmented reporting and unnecessary complexity. Each relationship requires oversight, coordination and time. Prioritising a few key relationships with institutions that understand your objectives results in more cohesive service and better long-term value.

7. Underutilising Technology

Many families fail to make full use of the technology available to them. Manual processes and siloed systems create inefficiencies that sap time and energy. Tools for wealth aggregation, performance tracking, compliance and document storage can streamline operations and improve transparency. The right tech stack reduces administrative burden and gives families more time to focus on what really matters.

8. Overcomplicating Structures and Systems

Complexity for its own sake can be dangerous. When family offices build structures that are too intricate, they create friction, confusion, and decision fatigue. Simpler systems are easier to manage, easier to hand off, and easier to sustain over time. Aim to create a lean structure that works today, but can grow and adapt as the family evolves.

9. Suppressing Individual Expression

Family offices that focus solely on shared goals can unintentionally alienate individual family members, particularly in the second or third generation, when families are larger and more dispersed. Rather than imposing a one-size-fits-all model, structures should offer flexible ways for members to engage based on their interests (such as through philanthropy, investment committees, or entrepreneurial initiatives) while preserving a sense of unity and purpose.

10. Neglecting Financial Education for Family Members

A family office is not just about preserving capital; it is also about preparing the next generation to carry on a legacy. Too often, families underestimate the importance of financial education. Building fluency around budgeting, investments, tax basics, and governance empowers younger members to engage meaningfully and become good stewards of the family’s assets. Education should be proactive, personalised and ongoing, especially as responsibilities shift over time.

Conclusion

Ultimately, the success of a family office is not measured by complexity or scale, it is about whether it works for the family it is built to serve. A lean, well-run office gives families more control, better coordination and the flexibility to evolve over time. The earlier you approach it with clarity and intention, the more value you will unlock for generations to come.

For families establishing or refining a family office, the right structure can unlock clarity, control and long-term value. If you would like to discuss your approach or explore how to avoid common pitfalls, please contact us. We support families in building offices that are efficient, enduring and aligned with their purpose.

Contact us via our contact form, or book an appointment here.

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Disclaimer

FundFront provides operational and technological solutions for fund structuring, securitisation and management. We do not provide legal, tax or financial advice. We recommend that you consult with professional legal or financial advisors to ensure compliance and appropriateness for your specific situation.

Written by:

Arman Salavitabar