How do family offices decide which services to insource and which to outsource? We asked half a dozen family office leaders which services they have opted to provide in-house, and how they made the decision:
We provide investment management services, tax planning, family governance, philanthropy management, travel coordination and a myriad of other services. We handle everything in-house, currently coordinating with external providers on the specific execution elements when necessary from accountants and attorneys.
— John Michael “JM” Elder, president and chief investment officer, Wellspring Family Group
We really look at this based on whether we have the core competencies to address something in-house or whether we are better off outsourcing. Over the years, that’s really meant more outsourcing as we’ve reduced staffing through retirements, etc. So, for example, while we once did most tax compliance in-house, we now outsource it. The office definitely takes more of a management/coordination role, utilizing outsourced subject matter expertise, than in the past. We have some core administrative, treasury, bookkeeping/accounting and foundation management and compliance work in-house, as well as specialty items like the Corporate Transparency Act and foreign bank account reporting, but otherwise likely oversee and coordinate things like estate planning, tax compliance (including gift tax compliance), etc.
— Josh Kanter, president, Chicago Financial, Inc. (a single-family office), and founder and CEO of leafplanner
I am constantly thinking about how best to use our resources to stay one step ahead of an evolving family. My approach to resource allocation focuses on one core principle: delivering exceptional service while maintaining the trust and privacy of our family members. This guides my decisions between in-house and outsourced services, based on several key factors:
In-house services:
- Personal services (tax, estate, and financial planning) to maintain deep family relationships
- Highly confidential and mission-critical functions requiring direct control
- Core competencies where we have established expertise
Outsourced services:
- Specialized functions requiring specific expertise that would be costly to maintain in-house
- Tasks with inconsistent demand to avoid underutilized staff
- Highly regulated services where external providers are better equipped to handle evolving compliance requirements
- Scalable operations that need to flex with changing family needs
Technology serves as a key enabler across both models, enhancing our team’s efficiency and elevating service quality for family members.
— Josh Miller, CEO, single-family office
Our office, like many, has evolved with what we handle in-house versus outsourced. The family office provides strategic wealth management for the family as a whole, and at the household and individual level as requested. They also handle all investment planning for the family office, in conjunction with the board, and serve as advisors to family members as needed. The office also maintains all charitable giving at the joint level, including a foundation and multiple DAFs, and they also are charged with creating educational services for family members, including married-ins and the rising generation. While we used to do more bill pay and concierge services in-house, only elderly (typically age 80+) utilize these services, and the intent is to sunset these services if possible. We do outsource estate planning, though the staff are highly involved in conversations to maintain continuity. Most of the family uses the same attorneys for estate planning, though they are not required to do so.
— Bryn Monahan, senior consultant at Relative Solutions and fourth generation family/board member, Foster Holdings
Destiny Family Office handles all traditional wealth management services, in addition to bookkeeping/bill pay services. We have partnerships with outsourced services for trust services and comprehensive banking services. Tax and legal are outsourced to a variety of sources. We’re constantly building our service offerings and have a three-year goal of bringing tax services in-house, probably through an M&A deal.
— Thomas H. Ruggie, founder and CEO, Destiny Family Office
The best advice on this is to be sure the things that are in-house are ones we can deliver on in a best-in-class manner. Conversely, those things that we don’t have an appetite to do internally are prime targets for outsourcing (even if we might be able to do it well).
— Scott Saslow, founder and CEO, ONE WORLD Investments and author of ‘Building A Sustainable Family Office’
