The example below is illustrative and composite for educational purposes; it does not represent a testimonial or a guarantee of results.
A manufacturing business owner I worked with last year came to me after selling for $18 million. His first question: "Should I start a family office like the big guys?" My answer surprised him. You don't need a family office to think like one. His underlying worry was themost common post-sale regret: building a business for freedom and then losing direction once it sells. But you do need to understand what actually scales down to your wealth level.
Family offices globally now manage over*$5.5 trillion in wealth*, rivaling hedge funds in total assets according toCNBC citing Addepar data from May 2026. The question for founders with $10M to $25M isn't whether to copy them. It's which parts of their playbook actually work at your scale.
Key Takeaways
- Family offices hold 31% in public stocks and roughly 42% in alternatives, with private equity leading at 25% in the Americas (per CNBC/Addepar).
- The discipline scales, the staff does not.Written investment policy, sized alternatives sleeve, consolidated reporting all translate. In-house CIOs and COOs do not.
- Typical $10M to $25M operating model:a coordinated advisor network with one quarterback, running roughly $125K to $310K all-in.
- Most expensive mistake:confusing direct deals with diligent deals, recreating the same concentration risk founders just escaped.
What Family Offices Actually Own in 2026
The latest data shows family offices have shifted their allocation significantly.Public equities rebounded to 31%in 2025, while*alternatives collectively represent 42%*of portfolios, including private equity, real estate, hedge funds, and private credit according toGoldman Sachs survey of 245 family offices reported by CNBC.
The Real Estate Shift
Real estate now accounts for 39% of family office allocations, up from 26% two years earlier. Apartment complex and land development deal value jumped from $2.1 billion to $7.5 billion according to thePwC Global Family Office Deals Study 2025.
This isn't random. Family offices are chasing yield in a world where traditional bonds don't pay enough. Real estate provides income plus inflation protection, though it carries risks including illiquidity, vacancy, interest rate sensitivity, and market volatility.
Private Equity Dominance
Private equity is*strongest in the Americas at 25%of allocations. But here's what most articles miss: family offices aren't just buying PE funds anymore. They're doing direct deals.
The minimum ticket sizes have democratized.Direct deal minimums have dropped from $5-$10 million historically to $250,000-$500,000 entry points*without reducing strategy quality according toBloomberg's January 2026 family office analysis.
What Scales Down to $10M to $25M
The discipline scales. The overhead doesn't. Here's what you can actually replicate:
A Written Investment Policy Statement
This is the highest-leverage move. Family offices don't wing it. They have written policies that govern asset allocation, risk tolerance, and liquidity needs.
Your IPS should answer three questions: How much can you lose? How long can money be tied up? What's the purpose of this wealth?
An Alternatives Sleeve Sized to Your Liquidity
Don't copy the 42% alternatives allocation blindly. Size it to your actual liquidity needs. If you just sold a business, you probably want*less*illiquidity, not more.
Start with 10-15% in alternatives. Grow it as you get comfortable. The manufacturing owner I mentioned started with 12% and is now at 18% three years later.
Access Through Multi-Manager Platforms
You can't write $5 million checks to private equity funds. But you can access the same strategies through multi-manager platforms that pool smaller investors.
These platforms give youdiversificationacross 20-30 underlying managers for a $500,000 minimum instead of $5 million per fund. The trade-off is an additional layer of fees and less control over individual manager selection.
Consolidated Reporting
Family offices see everything in one place. You should too. Whether it's through your advisor's platform or a service likeAddepar, consolidate your view.
What Does NOT Scale Down
Here's where most people get it wrong. They try to replicate everything.
In-House Staff
The*average annual cost to run a family office is $3.2 million*for operating costs including staff, technology, compliance, and overhead, before investment management fees according to theJ. P. Morgan Private Bank 2024 Global Family Office Report.
That's 32% of a $10 million portfolio just for overhead. The math doesn't work until you're north of $100 million.
Single-Family Office Structure
Multi-family office fees typically run*0.40% to 0.70% of assets under management*. For a family with $25 million, that's $100,000 to $175,000 per year according toSEC guidance on investment adviser fees.
Compare that to the $3.2 million single-family office cost. The multi-family route makes sense until you hit serious scale.
Bespoke Private Placements
The good deals with $5 million minimums aren't available to you. The deals that are available often shouldn't be in your portfolio.
Stick to institutional-quality managers accessible through platforms. Skip the "exclusive opportunities" pitched at wealth conferences.
A Practical Operating Model
Here's how to actually implement this:
The Coordinated Advisor Network
You need a quarterback, not a team. One advisor coordinates with your CPA, estate attorney, and insurance specialist. Everyone talks to each other.
This prevents the left-hand-right-hand problem where your tax strategy conflicts with your investment strategy.
Annual Cost Benchmarks
Expect to pay 0.75% to 1.25% all-in for coordinated wealth management at $10M to $25M. That includes investment management, planning, and coordination.
Higher than a robo-advisor, lower than a single-family office. You're paying for the coordination and access.
Texas Residency Advantages
If you're Texas-based, you have structural advantages. No state income tax. No state estate tax. Favorable trust laws for multi-generational planning.
Consider establishing trusts with Texas situs even if you move. Where this structure is appropriate, tax savings may compound over decades, depending on your specific situation and future tax law changes.
This material discusses general tax and trust structures. It is not a substitute for individualized tax or legal advice. Consult your tax advisor and attorney regarding your specific situation.
The One Role You Can't Outsource
You still need to be the quarterback of your own wealth. Advisors execute. You decide.
Stay involved in the big decisions. Delegate the implementation.
The Mistakes I See Most Often
Confusing Direct Deals with Diligent Deals
"Direct" doesn't mean "better." I've seen founders put 30% of their wealth into direct real estate deals because it felt more "family office-like."
They recreated the sameconcentrationrisk they just diversified out of by selling their business.
Treating Asset Allocation Like a Permission Slip
Asset allocation isn't about hitting exact percentages. It's about managing risk relative to your goals.
If you need $2 million liquid for a real estate purchase next year, don't put it in private equity because your target allocation says so.
Underestimating Illiquidity Tolerance
You just spent 10-20 years with all your wealth tied up in one business. Most founders want*more*liquidity after an exit, not less.
Don't rush into illiquid alternatives. Give yourself time to adjust to having liquid wealth.
Importing Jargon Without Discipline
Using family office terminology doesn't make you a family office. Having family office discipline does.
Focus on the process, not the labels.
Frequently Asked Questions
What is the minimum net worth to start a family office?Industry data suggests $100 million minimum for a single-family office due to the $3.2 million annual operating costs. Multi-family offices serve clients starting around $25 million.What do family offices invest in?Current allocation data shows 31% public equities, 42% alternatives (including private equity at 25%, real estate at 39% of some portfolios), with the remainder in fixed income and cash.Can you invest like a family office without one?Yes, through coordinated advisor networks, multi-manager platforms for alternatives access, and disciplined investment policy statements. The strategy scales; the overhead doesn't.What is a virtual family office?A coordinated network of specialists (wealth advisor, CPA, estate attorney) that provides family office-like services without the overhead of dedicated staff. Costs typically 0.75-1.25% annually versus $3.2 million for single-family offices.How much of a family office portfolio is in alternatives?Current data shows 42% in alternatives collectively, including private equity, real estate, hedge funds, and private credit. This varies significantly by family size and risk tolerance.Do family offices use index funds?Yes, many use index funds for their public equity allocation (31% of portfolios). The focus is on low-cost, diversified exposure rather than active management in public markets.Should a $10M-$25M founder hire a family office or wealth advisor?A coordinated wealth advisor network is more cost-effective. Multi-family office fees run 0.40-0.70% annually versus $3.2 million fixed costs for single-family offices.How are family offices changing in 2026?Increased allocation to real estate (up to 39%), direct private equity deals with lower minimums ($250K-$500K), and technology adoption for portfolio management and reporting.
Work with Pinnacle Wealth Advisory
If you have $10M to $50M in liquid or about-to-be-liquid wealth and want a second opinion on what should and should not scale down for your specific situation, here's where to start:Schedule a consultationto discuss your wealth strategy.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC. Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes. Doug Greenberg is an investment adviser representative of SB Advisory LLC, a registered investment adviser.
Top comments (0)