How to Start a Family Office in Canada

In recent years, Canada has seen significant growth in the number of family offices serving ultra-high-net-worth individuals and families.

Estimates suggest several hundred single-family offices currently exist in Canada, with many more expected to launch in the coming years.

Deloitte’s Global Family Office statistics reported 3,180 single-family offices in North America in 2024.

For wealthy families looking to manage their complex financial affairs more effectively, a family office can provide the structure and expertise needed.

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This comprehensive guide explores what family offices are, how they operate in Canada, and how to establish one.

What Does a Family Office Do?

A family office administers and oversees the day-to-day financial matters of affluent families.

It serves as a single point of contact for diverse financial needs, eliminating gaps in planning and providing effective communication across all aspects of wealth management.

The services provided by family offices are comprehensive and typically include:

• Wealth management, including investment strategy and execution
• Risk management to protect assets
• Tax planning to optimize financial outcomes
• Estate and succession planning for intergenerational wealth transfer
• Administration and governance of family assets and entities

Family offices craft sophisticated strategies that preserve wealth and protect capital across generations.

They create a seamless experience through an integrated suite of services tailored to each family’s unique situation and goals.

Beyond financial management, many family offices also handle personal matters like travel arrangements, property management, philanthropic activities, and family education.

Who Runs a Family Office?

Family offices are typically led by experienced financial and business professionals who oversee a team of specialists. Leadership often includes:

1. Chief Executive Officer (CEO): Provides overall strategic direction. Tim Cestnick is mentioned as an example of a CEO for a Canadian family office.
2. Chief Investment Officer (CIO): Oversees portfolio construction, manager selection, and investment research.
3. Chief Financial Officer (CFO)/Controller: Manages reporting, cash flow, budgeting, and accounting functions.
4. Legal & Tax Director: Ensures compliance with ever-evolving regulations, oversees estate planning, and coordinates with external counsel.
5. Philanthropy & Impact Lead: Designs and administers charitable programs in alignment with family values.
6. Operational Staff & Support: Includes family office administrators, IT specialists, and lifestyle managers.

Family members may take active roles in governance, typically through family councils or boards that set overall direction and priorities.

Some family offices are directly run by family members with relevant expertise.

On the other hand, other family offices are entirely professionally managed with the family maintaining oversight through governance structures.

The specific leadership structure often reflects the family’s preferences, expertise, and the complexity of their financial affairs.

As the family office industry matures in Canada, more specialized professionals are entering this field.

What Is a Family Office in Canada?

The family office concept, while well-established in Europe and the United States since the 1800s, is relatively new to Canada.

The Canadian family office landscape is diverse and growing rapidly, driven by demographic trends as family businesses founded decades ago change hands and create liquidity events.

Canadian family offices serve three main types of families:

1. Business families who own and operate active businesses
2. Financial families who primarily manage investment portfolios
3. Enterprise families who maintain a combination of operating businesses and investment assets

While sharing similarities with family offices worldwide, Canadian family offices often reflect the country’s unique cultural, tax, and legal environment.

Family Office Exchange (FOX), a thought leader in this space that has operated in the US for over 30 years, has recently expanded its presence in Canada, thus indicating the growing importance of this sector.

As in other countries, Canadian family offices fall into different categories:

• Single-family offices serve just one family, offering highly customized services
• Multi-family offices serve multiple unrelated families, providing economies of scale
• Shared family offices, like Our Family Office Inc., which describes itself as “Canada’s first truly integrated Shared Family Office”

How Much Capital Do You Need to Start a Family Office?

The capital requirements for starting a family office depend significantly on the type of office and level of service desired.

For a dedicated single-family office, the general industry consensus is that families should have a net worth of US$1 billion or more to justify and sustain the costs.

This high threshold reflects the significant expense of maintaining a dedicated team and infrastructure.

For families with wealth in the tens or hundreds of millions, multi-family offices often provide a more economical alternative.

These arrangements allow families to access professional family office services while sharing costs across multiple clients.

The ongoing operational costs of a family office can be substantial.

This includes:

• Salaries for specialized professionals
• Technology infrastructure
• Office space
• Other expenses

These costs must be carefully weighed against the benefits of improved wealth management, coordination of services, and privacy.

How to Start a Family Office in Canada

Setting up a family office in Canada involves several key steps:

Assess your needs and goals

Begin by clearly defining what you want to accomplish with your family office.

Common drivers include a liquidity event (such as selling a family business), increasing complexity of assets, or the desire for more coordinated wealth management.

Determine the appropriate structure

Decide whether a single-family office, multi-family office, or other arrangement best suits your needs and budget.

This decision should be based on your wealth level, complexity of affairs, and desired level of control.

Establish legal and operational frameworks

Create the necessary legal entities, governance structures, and operational procedures. This includes defining roles, responsibilities, and decision-making processes.

Build your team

Recruit qualified professionals with expertise in wealth management, tax planning, legal matters, and other relevant areas.

Consider which functions will be handled in-house versus outsourced.

Develop systems and processes

Implement the technology, reporting systems, and workflows needed to efficiently manage family affairs.

Create governance mechanisms

Establish family councils, investment committees, and other governance structures to ensure proper oversight and alignment with family values.

The process typically requires significant planning and consultation with experts in family office design and management.

Do Family Offices Make Money in Canada?

Family offices themselves are not primarily profit-driven entities but rather service organizations created to manage family wealth.

However, they typically operate under one of several business models:

For single-family offices, the family directly bears the costs of operations, including staff salaries, technology, office space, and other expenses. These costs are considered investments in protecting and growing the family’s wealth rather than profit-generating activities.

Multi-family offices, on the other hand, often operate on a fee-based model, charging each family for services provided. This allows them to generate revenue while sharing costs across multiple clients.

The Rockefeller Family Office, which evolved from serving just the Rockefeller family to becoming a multi-family office, exemplifies this transition.

Family offices can indirectly contribute to wealth creation through strategic investment management, tax optimization, and cost-efficient administration of family affairs.

Their integrated approach helps prevent wealth erosion that might occur with uncoordinated financial management.

What Are the Disadvantages of a Family Office?

While family offices offer numerous benefits, they also come with drawbacks that should be carefully considered:

High Costs

Creating a single-family office can require annual operating budgets of US$1 million to US$4 million (100–200 bps of AUM), making it prohibitively expensive for families below the US$1 billion threshold.

Complex Setup

Designing governance frameworks, hiring talent, and implementing technology demands extensive time, expertise, and project management.

These happen to be the areas where families may lack experience.

Limited Regulation

Family offices are lightly regulated compared to banks and funds, heightening risks of compliance gaps, money laundering vulnerabilities, or operational failures.

High-profile scandals in Singapore and elsewhere underscore the need for robust internal controls and third-party oversight.

Resource Constraints

Standalone single-family offices may lack the extensive research, deal-flow networks, and investment resources available to large financial institutions or commercial multi-family offices.

Family Dynamics

If not proactively managed through clear charters and impartial advice, interpersonal conflicts, generational tensions, or diverging family visions can:

• Undermine governance
• Lead to board deadlocks
• Trigger office reorganization

Which Country Is Best for Family Office?

The ideal jurisdiction for a family office depends on several factors including tax treatment, regulatory environment, access to expertise, and proximity to investments.

While Canada offers many advantages for family offices, including political stability and a strong financial system, families often consider multiple jurisdictions.

Canada’s family office sector is still developing compared to more established markets like the United States, where family offices have existed for over 30 years.

This means that while expertise is growing in Canada, families may sometimes look to other countries for specialized knowledge or services.

The United States offers a mature family office ecosystem with extensive professional networks like the Family Office Exchange (FOX).

European countries, particularly Switzerland and the United Kingdom, have long histories of family office services and sophisticated private banking.

Ultimately, many global families operate family offices across multiple jurisdictions to:

• Optimize tax efficiency
• Access expertise
• Manage investments worldwide

The best approach depends on each family’s unique situation, including citizenship, residence, investment focus, and long-term goals.

Starting a family office in Canada provides the advantage of proximity and familiarity with the local business, tax, and legal environment.

This is done while potentially maintaining international connections for specific needs.

Pained by financial indecision?

Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.