Family Office

The family office model in Australia is well established but continues to evolve. Traditionally, ultra-high-net-worth families relied on private banks, wealth managers and legal advisers to manage their affairs. Over the past two decades, the shift towards dedicated family offices has accelerated, driven by:

• increasing wealth;
• a desire for greater control; and
• the need for structured succession planning.

Early family offices in Australia were often informal, managed within investment companies or trusts. Today, there is a clear trend towards more sophisticated, institutionalised structures. The single-family office (SFO) model is prevalent among first-generation wealth creators, particularly in property, resources and private enterprise. Multi-family offices (MFOs) have also gained traction, offering economies of scale and shared expertise.

Regulation remains a key consideration. While family offices are generally not subject to the same licensing requirements as financial services firms, compliance with tax laws, corporate governance, and investment regulations is critical. The Australian Taxation Office (ATO) closely scrutinises family office and private structures to ensure compliance.

Historically, Australian family offices were built by entrepreneurs who had monetised private businesses. Families established single-family offices to centralise investment, tax and succession planning. These families sought control over capital deployment, better risk management and privacy.

With Australia’s stable legal system and attractive lifestyle, foreign families – particularly from Asia – have set up local family offices, often for succession planning or education-driven migration. While specific tax incentives are limited compared to Singapore or Hong Kong, Australia remains a desirable jurisdiction for those seeking a long-term presence.

Family offices have evolved from informal structures to institutional-grade investment entities. The reliance on in-house chief investment officers, governance frameworks and co-investment models reflects a shift from passive asset allocation to direct investment and strategic wealth planning.

Initially, family offices in Australia were informally structured, relying on private banks, investment advisers, accountants and lawyers for wealth management. Over time, as family wealth became more global and complex, service providers have evolved to meet these demands:

• Private banks and wealth managers have developed integrated multi-service offerings beyond traditional investment management.
• Accounting and tax firms have expanded to provide family governance and succession planning services.
• Law firms have taken on a more strategic role:
• • assisting in the formation and governance of family offices;
  • ensuring regulatory compliance; and
  • structuring multi-generational wealth transfers.
• Boutique firms now fill gaps left by larger institutions, providing consultancy services outside the constraints of financial product distribution models.

Collaboration between these providers remains a critical requirement for good outcomes.

In Australia, family offices are predominantly located in the major financial centres of Sydney and Melbourne. These cities are the primary hubs due to their concentration of financial institutions, legal firms and wealth management services. Some family offices are in other state capitals such as Brisbane and Perth, where families have regional business interests or ties to industries such as mining, gaming or agriculture.

Unlike jurisdictions such as Singapore and Hong Kong, Australia has no dedicated family office regulatory or incentives framework. Governance and incentives depend on tax, trust and corporate laws and policies applicable to the specific structures and industries relevant to the family office.

No specific codes of conduct, professional guidelines or similar apply directly to family offices in Australia.

In Australia, the main types of family office models are:

• single-family offices (SFOs);
• multi-family offices (MFOs); and
• virtual family offices (VFOs).

In addition, many Australian high-net-worth (HNW) families have all of the characteristics of an SFO, but do not identify with the label.

SFOs: SFOs manage the wealth, investments and financial affairs of a single HNW family.

• Advantages: SFOs offer highly personalised investment strategies and directly involve family members in decision-making and strategy formulation. SFOs benefit from enhanced privacy and confidentiality.
• Disadvantages: SFOs have high operating costs and require significant resources to maintain staff and infrastructure. They lack economies of scale and are also vulnerable to succession planning issues and difficulty in accessing best of breed personnel and/or advice.

MFOs: MFOs serve the financial needs of a group of HNW families who together access shared services and expertise. The goal is to achieve economies of scale while still offering personalised attention and services.

• Advantages: By sharing services, MFOs offer a more affordable option than SFOs. Families also:
• • benefit from the collective knowledge and experiences of other families within the MFO; and
  • may have access to investment opportunities and services not accessible by individual families by achieving economies of scale.
• Disadvantages: Customisation is limited, as MFOs must balance the interests of multiple families. This can result in:
• • less personal attention;
  • potential conflicts of interest;
  • loss of privacy; and
  • the dilution of investment opportunities.

VFOs: VFOs leverage technology to replicate traditional family offices by outsourcing services to external specialists and coordinating their efforts to meet the family’s financial needs.

• Advantages: VFOs offer a cost-effective solution to setting up and running a family office. They provide flexibility and scalability to adapt to changing family dynamics and financial requirements.
• Disadvantages: VFOs may lack the highly personalised and hands-on approach that a traditional family office can provide. Technological issues and cybersecurity threats may disrupt the services and expose the family’s sensitive information. Families may also have less direct oversight of the management team and operations, potentially compromising privacy and control.

Family offices in Australia provide a mix of:

• investment management;
• governance;
• tax structuring; and
• personal services.

The scope depends on:

• the complexity of family wealth;
• intergenerational planning needs; and
• investment objectives.

These key services involve the following activities:

• Investment management:
• • Portfolio construction, asset allocation and risk management.
  • Direct investments in private equity, venture capital and real estate.
  • Co-investments with other family offices and private funds.
  • Environment, social and governance (ESG) and impact investing strategies.
  • Diversification across asset classes and jurisdictions.
• Tax and structuring:
• • Establishment and management of trusts, private investment companies and foundations.
  • Tax-efficient asset holding structures.
  • International tax planning and compliance for global families.
  • Estate planning and intergenerational wealth transfer.
  • Management of tax risks, especially Division 7A risks and fringe benefits tax exposure for lifestyle assets.
• Governance and succession planning:
• • Family constitutions and governance frameworks.
  • Board structures and decision-making protocols.
  • Educational programmes for the next generation.
  • Dispute resolution mechanisms.
  • Succession strategies for operating businesses and passive investments.
• Legal and regulatory compliance:
• • Corporate governance and fiduciary duties.
  • Compliance with financial services licensing requirements (if applicable).
  • Privacy and cybersecurity risk management.
  • Employment law for family office staff.
• Philanthropy and social impact:
• • Structuring private ancillary funds and charitable trusts.
  • Managing grant-making programmes and social impact investments.
  • ESG-aligned capital deployment.
  • Legacy and reputational management.
• Personal and concierge services:
• • High-value asset management (art, aircraft, yachts, real estate).
  • Security and risk management.
  • Family travel coordination and lifestyle services.
  • Private staffing (chauffeurs, house managers, executive assistants).

When determining the appropriate family office structure, families should consider several factors, including the need for external advisers – even in an SFO – to ensure best-of-breed expertise and mitigate risks.

• Wealth and costs: Establishing and maintaining an SFO require significant financial resources. While an SFO offers dedicated services, the cost of in-house teams across legal, tax and investment functions is substantial. MFOs and VFOs provide cost efficiencies through shared services.
• Complexity of needs: Families with intricate financial structures, cross-border investments or intergenerational wealth planning require a highly tailored approach. An SFO allows for bespoke solutions but necessitates external specialists to provide independent advice and access to institutional-grade opportunities.
• Privacy and control: SFOs provide greater confidentiality but can also lead to insular decision-making. Bringing in external advisers ensures governance, risk diversification and the ability to benchmark against best practices.
• Investment strategy and risk management: Even an SFO with in-house investment professionals must engage external advisers to assist with:
• • conducting due diligence;
  • accessing niche opportunities; and
  • structuring complex transactions.
• Regulatory and tax compliance: Given the evolving tax landscape and international regulatory frameworks, external legal and tax counsel remain essential for structuring and compliance, regardless of the office model.

In Australia, family offices typically adopt ownership structures that align with their operational needs, family dynamics and regulatory requirements. Commonly, the group known as the ‘family office’ will comprise a group of trusts, companies and foundations. Common entities include the following.

Not all ownership structures used by Australian family offices are directly available to families outside the jurisdiction. However, several options can still be accessed with appropriate compliance.

• Private companies: Non-resident families can establish an Australian proprietary limited company, provided that they comply with registration requirements, including appointing at least one director who is an Australian resident.
• Trusts: Australian trusts are available to foreign families; however, the trust’s tax residency depends on where the trustee is located. Non-resident trustees may render the trust as foreign, leading to different tax implications.
• Partnerships: Non-resident families may participate in partnership arrangements in Australia, but families must consider the tax implications of their partnership income being subjected to Australian tax.

• Control: Decide between centralised control (eg, corporate trustee) or decentralised management. Governance frameworks must be clear.
• Asset protection: Trusts, corporate structures and special purpose vehicles can mitigate liability risks, particularly where family members operate businesses.
• Tax efficiency: Trusts offer flexibility in distributing income, while companies provide continuity but attract corporate tax rates. Holding structures must be optimised to avoid unnecessary tax leakage.
• Succession planning: Trusts have an 80-year perpetuity period in most Australian states and territories. Foundations or corporate vehicles exist in perpetuity.
• Flexibility and adaptability: Hybrid structures (eg, trusts holding companies) allow adjustments as family dynamics evolve.
• Privacy and compliance: Consider disclosure obligations. Private trust companies or tailored legal entities may offer greater confidentiality.

A high-net-worth Australian family managing intergenerational wealth might use:

• a family trust for local investments;
• a corporate entity owned by trusts for operating businesses; and
• a charitable foundation for philanthropy.

Offshore entities may also be used, most often for specific offshore assets or business interests.

Australia has no specific legal framework for family offices, so structuring depends on the services provided.

• Legal structure:
• • Single family office: Typically structured as:
  • • a company;
    • a discretionary trust;
    • a unit trust; or
    • a hybrid structure (or a group thereof).
  • Multi-family office: Usually a corporate entity, often requiring an Australian financial services (AFS) licence.
  • Registration: Australian Securities and Investments Commission (ASIC) registration is required for corporate entities under the Corporations Act 2001 (Cth). Trust deeds should be signed in ‘wet ink’ and most states and territories require nominal duty to be paid.
• Governance and tax:
• • Regulations: Refer to question 4.3.
  • Family constitution or family agreement: Governs decision-making and succession.
  • Employment and incentives: Must be structured efficiently (eg, phantom plans, share schemes).
  • Tax residency and Foreign Investment Review Board (FIRB) Compliance: Important for international families, but also for families utilising trusts where ‘foreign beneficiaries’ (even if no such beneficiaries exist) may need to be excluded for FIRB, land tax and stamp duty reasons.

The costs of establishing and running a family office in Australia vary widely depending on its structure, scope and services. Estimating typical costs is as challenging as predicting expenses for the establishment and operation of any bespoke business operation.

Australia does not have a dedicated regulatory framework for family offices. Instead, compliance obligations depend on the structure, the services provided and the level of engagement in financial activities.

• Financial services regulations: Family offices may be subject to regulations under the Corporations Act 2001 (Cth), governing financial services in Australia. The Corporations Act imposes obligations related to:
• • record-keeping;
  • disclosure; and
  • conflicts of interest.
• An AFS licence is also required for family offices that provide financial services to non-related parties. This requirement can even arise in groups under common control. Because the Corporations Act excludes fiduciary powers when defining ‘control’, a subsidiary of a corporate trustee will not be a ‘related body corporate’ of the trustee company itself and the exception to holding an AFS licence will not apply. Management investment scheme regulations must be considered in relation to any co-investments.
• Taxation: Family offices must also adhere to tax obligations administered by the Australian Taxation Office. The applicable obligations will depend on how the family office is structured and the nature of its investments.
• Anti-money laundering and counter-terrorism financing: Under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, family offices must implement measures such as customer due diligence and reporting obligations to prevent money laundering and terrorism financing.
• Professional standards: Family offices must adhere to the ethical guidelines and standards relevant to the services they provide, such as the Financial Planning Association of Australia or Chartered Accountants Australia and New Zealand.
• Foreign investment: Under Australia’s Foreign Investment Review Board (FIRB) regulations, the classification of a trust as a foreign person hinges on the interests held by its beneficiaries. Specifically, if a trust has beneficiaries who are foreign persons, the trust itself may be deemed a foreign person, necessitating FIRB approval for certain transactions. Land tax and duty surcharges may also apply to property held by such trusts.
• Other: Family offices that have employed staff will be subject to employment law regulations and may be subject to regulations on data and information under the Privacy Act 1988 (Cth).

Before establishing a family office, the fundamental question is whether one is needed. For families with substantial assets, a family office can provide privacy, control and bespoke wealth management. However, for some, outsourcing to professional advisers may achieve the same objectives without the cost and complexity of an in-house structure.

If a family office is warranted, several factors must be carefully managed:

• Governance and control: Who will run the office? A well-drafted family constitution or charter is essential to prevent disputes and ensure alignment between generations.
• Cost versus benefit: Operating costs can exceed A$1 million annually, depending on staffing and services. A lean virtual family office may be preferable for those seeking lower overheads.
• Tax and regulatory compliance: The structure must be optimised for tax efficiency, succession planning and asset protection, while ensuring compliance with ASIC, FIRB and Australian Taxation Office requirements.
• Succession and longevity: Will the next generation engage with the family office or will wealth be fragmented? Structuring must anticipate family dynamics and intergenerational wealth transfer.

• Regulatory risks: Family offices must comply with a range of Australian regulations, including:
• • tax laws;
  • financial services legislation; and
  • privacy standards.
• Financial risks: Managing substantial portfolios exposes family offices to market volatility and poor investment decisions.
• Reputational risks: Public exposure of family disputes, mismanagement or unethical conduct can harm the family’s reputation.
• Operational risks: Family offices face cybersecurity threats, fraud and operational failures.
• Succession risks: Poor governance and unclear succession planning can disrupt operations and cause family conflicts.

• Family charter/constitution:
• • Defines governance, succession planning and dispute resolution mechanisms.
  • Increasingly adopted to prevent or reduce intergenerational disputes and provide structured decision-making.
• Estate planning documents:
• • Wills, generally with testamentary trusts: Allow tax-effective wealth transfer and asset protection, particularly for minor beneficiaries.
  • Letters of wishes: Provide non-binding guidance on family intentions, particularly in discretionary trust structures.
  • Enduring powers of attorney and appointment of guardians: Essential for continuity if key family members lose capacity.
  • Superannuation binding death benefit nominations: Ensure tax-efficient distribution of superannuation to intended beneficiaries.
• Investment and risk governance:
• • Investment policy statement: Defines:
  • • wealth management strategy;
    • environmental, social and governance considerations; and
    • risk parameters.
  • Compliance and risk framework: Addresses Australian Securities and Investments Commission (ASIC), Australian Taxation Office, Foreign Investment Review Board and cybersecurity risks in an evolving regulatory environment.

These documents should be regularly reviewed, particularly:

• during:
• • generational transitions;
  • major liquidity events; or
  • regulatory changes; or
• at least every three to five years.

Family members: Governance frameworks, such as a family constitution, provide clarity on:

• decision-making;
• wealth transfer; and
• conflict resolution.

Regular family councils or board meetings:

• ensure transparency;
• foster engagement; and
• prevent disputes.

Tailored reporting – ranging from high-level investment summaries for passive members to detailed briefings for active participants – balances discretion with inclusivity.

Trusted advisers: Collaboration between legal, tax and investment professionals is critical. A family office should establish cross-disciplinary advisory committees to ensure holistic decision-making and risk management. Regular strategy sessions and information-sharing mechanisms prevent silos and align professional advice with the family’s objectives.

Media: Public engagement should be tightly controlled to protect privacy. Often Australian families will require members to sign confidentiality deeds and agree to social media and public communications policies.

• Governance structures:
• • Family council/board: Comprising key family members, this body provides:
  • • strategic direction;
    • succession planning; and
    • dispute resolution.
  • It should meet quarterly or biannually.
  • Independent advisory board: Increasingly common in Australian family offices, this includes external legal, tax and investment professionals to provide objective oversight.
  • Investment committee: Oversees:
  • • asset allocation;
    • risk management; and
    • compliance with the investment policy statement.
  • Regular reporting: This ensures transparency through:
  • • annual family meetings;
    • financial reports; and
    • succession reviews.
  • Cybersecurity and confidentiality protocols: These are critical to protect sensitive family and financial information.
• Fiduciary and regulatory oversight:
• • Trustees/directors: If structured via trusts or companies, fiduciaries must ensure compliance with:
  • • trust law;
    • corporate governance requirements; and
    • ASIC obligations.
  • External or internal regulatory oversight: Monitors taxation, privacy, and regulatory risks, ensuring adherence to the Australian Taxation Office, Foreign Investment Review Board and anti-money/laundering/counter-terrorist financing laws.
• External audits:
• • Private companies (Pty Ltd): Audit is required for large proprietary companies – that is, companies which meet at least two of the following criteria:
  • • revenue of more than A$50 million;
    • assets of more than A$25 million; and
    • more than 100 employees.
  • Public companies: Mandatory audit under the Corporations Act 2001 (Cth).
  • Trusts: No automatic audit unless required by the trust deed, beneficiaries or ASIC (for registered schemes).
  • AFS licensees: Must conduct annual independent audits under ASIC requirements.
  • Self-managed super funds: Annual audits required under the Superannuation Industry (Supervision) Act 1993 (Cth).
  • Private ancillary funds: Annual audits are required under the Australian Taxation Office and Australian Charities and Not-for-profits Commission regulations.

An increasing number of disputes (in and outside of Court) arise around the control and benefits of family groups, especially when an unclear succession plan leads competing claims between family members. Poor trust governance and failure to document succession intentions resulted in unnecessary litigation. Family offices must ensure clear succession frameworks to avoid similar disputes.

In Owies v JJE Nominees Pty Ltd [2022] VSCA 142, the Supreme Court criticised the trustee of a family trust for failing to exercise discretion properly, favouring some beneficiaries over others without justification. The case underscores the need for:

• transparent governance;
• proper trustee decision-making; and
• dispute resolution mechanisms.

In Bird v Bird [2013] NSWCA 262, a failure to separate personal and business interests resulted in litigation between family members over trust distributions. The court emphasised that fiduciaries must act impartially and prudently when administering family wealth.

Investment and wealth management: Australian family offices must comply with Australian Securities and Investments Commission (ASIC) regulations if managing investments or providing financial advice. Australian Prudential Regulation Authority-regulated superannuation funds influence local investment trends, with a growing emphasis on environmental, social and governance and ethical investing.

Tax and estate planning: Australia has no estate tax, but capital gains tax (CGT) and duty can apply to inherited assets. The Australian Taxation Office rules on trust distributions, non-resident taxation and controlled foreign corporation rules require careful structuring. Binding death benefit nominations are essential for superannuation planning.

Succession and governance: Testamentary trusts, wills, enduring powers of attorney and guardianship appointments are critical. Foreign beneficiaries may need Foreign Investment Review Board approval for inherited Australian property. Clear family constitutions help to prevent disputes.

Real estate and luxury assets: Australian property attracts CGT, stamp duty and foreign ownership restrictions. Luxury assets owned within a family office structure may need to be made available to family members at arm’s-length commercial rates to avoid Division 7A taxation issues.

Employment and compliance: Family offices must adhere to:

• fair work laws;
• superannuation obligations; and
• the Privacy Act 1988 (Cth).

Cybersecurity risks require stringent data protection measures.

Philanthropy and reputation: Deductible gift recipient-endorsed philanthropic structures provide tax incentives. Media exposure should be carefully managed to protect family reputation and privacy.

Private ancillary funds (PAFs): PAFs are charitable trusts allowing high-net-worth (HNW) families to establish tax-effective foundations.

• Advantages: Tax-deductible donations and offer flexibility in supporting causes.
• Disadvantages: Require compliance with strict regulatory obligations, including annual distributions and reporting, creating administrative complexity and increasing costs.

Public ancillary funds (PuAFs): PuAFs are similar to PAFs but accept public contributions, pooling donations to support charitable initiatives.

• Advantages: Facilitate collective impact and reduces administrative burdens for individual donors.
• Disadvantages: Donors have limited control over fund allocation.

Direct donations: HNW individuals and families often donate directly to charities or causes as one-off gifts or ongoing contributions.

• Advantages: Simple, immediate and low administrative burden. Immediate tax deduction if to a registered DGR charity.
• Disadvantages: The tax deduction is only obtained on the gift itself, not the investment of corpus. Limited influence over fund utilisation and can lack long-term strategic impact.

Corporate philanthropy: Family businesses engage in philanthropy through corporate social responsibility initiatives, integrating charitable giving into their business operations and impact investing.

• Advantages: Enhances brand reputation and aligns business operations with social values.
• Disadvantages: May be perceived as tokenistic or inconsistent with the company’s practices and requires significant resources.

Bequests and testamentary giving: Leaving a legacy through wills allows individuals to support causes posthumously.

• Advantages: Ensures a lasting legacy that aligns with personal or family values and may reduce estate taxes.
• Disadvantages: Delayed impact and potential family disputes if not clearly documented. No tax deduction for charitable bequests made under a will.

Social enterprises and impact investing: These innovative approaches combine financial returns with social benefits.

• Advantages: Appeal to younger generations prioritising values-driven investments by encouraging sustainable and scalable solutions to societal challenges.
• Disadvantages: Involve higher investment risks and require expertise to identify successful ventures.

Impact investing is becoming increasingly embedded in Australia, reflecting a growing interest in aligning investment strategies with social and environmental goals. Many private equity firms, superannuation funds and family offices are now integrating impact strategies into their portfolios. Key concerns and considerations for impact investing include the following:

• Measurement and reporting: Impact investing can be challenging due to the difficulty in measuring and reporting social and environmental impacts. Investors must adopt robust impact measurement metrics and reporting standards, such as the Global Impact Investing Network standards, to ensure transparency and accountability.
• Risk and return: Balancing financial returns with social outcomes can involve significant risks, particularly in early-stage ventures or emerging markets. Conducting thorough due diligence is essential to align investments with risk tolerance.
• Regulatory environment: Australia’s regulatory framework supports impact investing through initiatives such as green bonds, social impact bonds and recommendations from the Social Impact Investing Taskforce’s Final Report to encourage innovation in the sector. However, evolving tax laws and compliance requirements must be monitored to ensure adherence and tax optimisation.
• Cultural and generational factors: Younger generations are driving demand for impact investing, prioritising sustainability and ethical values. Family offices should consider how generational shifts influence their investment strategies.
• Scalability and longevity: Balancing immediate impact with sustainable, long-term growth is a critical consideration for investors seeking to scale their impact while maintaining financial viability.

• Environmental: Family offices are prioritising investments in renewable energy, sustainable agriculture and climate change mitigation. These initiatives reflect a commitment to environmental stewardship and long-term sustainability.
• Social: There is a growing emphasis on social responsibility, with investments targeting healthcare, education and social equity. Family offices are also evaluating the social impact of their investments, ensuring that they promote inclusivity and contribute to community wellbeing.
• Governance: Strengthening governance practices is a key focus, enhancing transparency, ethical standards and accountability. This includes conducting due diligence on the governance structures of investee companies.

Integrating ESG principles requires balancing positive returns with positive impact. Family offices must evaluate how to incorporate these factors into investment decisions without compromising financial returns. Australia’s evolving regulatory landscape, including ESG reporting obligations and climate-related disclosures, necessitates ongoing compliance and adaptability. Additionally, measuring and reporting ESG impact present challenges, requiring robust frameworks and expert guidance to ensure accuracy and accountability.

Stakeholder engagement: Effective philanthropy in Australia benefits from collaboration with:

• First Nations communities;
• non-governmental organisations; and
• ESG specialists.

Family offices could prioritise Indigenous-led initiatives and consult with local leaders to ensure alignment with self-determination principles. Transparent engagement may enhance impact and credibility.

Community and cultural sensitivity: When working with Indigenous Australians, an understanding of traditional ownership, cultural heritage and historical contexts may help ensure philanthropic efforts are respectful and effective. Family offices might consider aligning initiatives with frameworks such as the Uluru Statement from the Heart and engaging with Native Title laws and cultural heritage protections to navigate potential sensitivities.

Government collaboration and policy alignment: Engaging with government agencies and policy initiatives may help to amplify impact, particularly in areas such as:

• climate action;
• social equity; and
• Indigenous economic development.

Aligning philanthropy with public sector initiatives could increase effectiveness and influence systemic change.

Reputation management: With increased scrutiny on greenwashing and ESG commitments, transparent reporting under Australian Securities and Investments Commission, Australian Charities and Not-for-profits Commission and Australian Stock Exchange disclosure standards may strengthen credibility. Independent impact assessments could provide additional accountability.

Sustainability and legacy: A long-term philanthropic strategy might focus on:

• environmental conservation;
• social impact; and
• intergenerational change.

Structuring initiatives through charitable trusts or deductible gift recipient entities could offer tax efficiencies and ensure ongoing impact.

Key personnel typically include the following:

• Chief executive officer (CEO): Oversees the entire operation of the family office, ensuring that all activities align with the family’s long-term goals and values.
• Chief investment officer: Manages the family’s investment portfolio, usually relying on support from external advisers.
• Financial adviser/planner: Provides financial planning services, such as:
• • tax optimisation;
  • estate planning; and
  • wealth management.
• Legal counsel: Handles legal matters, including:
• • regulatory compliance;
  • estate planning;
  • dispute resolution; and
  • any legal risks associated with the family’s activities.
• Accountant/financial controller: Manages accounting functions, tax compliance and financial reporting, ensuring that the family’s financial affairs are accurately tracked and compliant with regulations.
• Administrative support: Coordinates day-to-day operations, including scheduling, communication and logistics.

The composition of the team can vary depending on the chosen family office structure:

• Single-family office (SFO): Typically requires a full complement of in-house staff to handle all aspects of the family’s financial and personal affairs, providing highly personalised services.
• Multi-family office (MFO): Shares resources across multiple families, which results in a leaner organisational structure but with more specialised roles to cater to the unique needs of each family.
• Virtual family office: Relies on external service providers for most functions, minimising in-house staff and offering flexibility in staffing requirements.

To attract and retain skilled professionals, family offices often employ various forms of equity incentive arrangements:

• Phantom plans: Phantom plans mimic equity incentive plans; however, incentives are delivered in cash. These plans are highly customisable and are typically used to reward senior employees for the appreciation in value of family group assets under their management. Phantom plans also create opportunities for internal liquidity without requiring the sale of the underlying asset. They also include good and bad leaver provisions to protect the family in the event of an employee’s departure.
• Employee share schemes (ESS): ESS allow employees to receive or purchase shares in the company they work for. This type of scheme is ideal when a family office holds a significant interest in one or more private or listed companies and wants to incentivise the long-term performance of that company or company group. The family office employee might be asked to devote considerable time and services directly to the company, potentially constituting a sufficient nexus to establish a deemed employment arrangement for ESS purposes.
• Loan-funded share plans/co-invest plans: These offer senior employees the opportunity to invest alongside the family in particular investments. Rather than indirectly investing through taking ownership of a family group entity, employees directly invest in the underlying asset, fostering deeper commitment and shared interests.

In Australia, family members often assume official positions in family offices, though the extent of their involvement can vary depending on the size, complexity and goals of the family office. In smaller SFOs, it is common for family members to take on key roles, such as CEO or chief financial officer, or even roles in investment management, depending on their expertise and interest. In these cases, the family office may function more as an extension of the family’s personal affairs, with a high degree of oversight from family members.

However, in larger family offices or MFOs, family members may not hold formal operational positions but still play a significant role in governance. They may serve on advisory boards or strategic committees, providing direction on:

• investment philosophy;
• charitable giving; or
• other areas important to the family’s values and legacy.

In these structures, the day-to-day operations are typically handled by professional staff.

Key concerns and considerations include the following:

• Family dynamics and governance: When family members occupy official positions, it is crucial to establish clear governance frameworks to avoid conflicts of interest and ensure professionalism. Remuneration for family members working in the family office should be on arm’s-length terms.
• Expertise and competence: Family members taking on official roles should possess the necessary skills and expertise. Relying on family members without relevant experience may undermine the efficiency and effectiveness of the family office.
• Succession planning: Many Australian family offices integrate succession training, financial education and mentorship programmes to prepare the next generation for leadership roles, ensuring a structured transition and long-term sustainability.

Managing talent in family offices requires:

• competitive remuneration;
• governance clarity;
• confidentiality protections; and
• fraud risk mitigation.

Given their private nature, attracting and retaining skilled professionals present unique challenges.

Competitive compensation and incentives: Family offices often lack traditional career progression, making above-market salaries, performance-based bonuses and co-investment opportunities key to attracting top talent. Phantom equity schemes can further align employee incentives with family objectives.

Governance and fraud risk management: Without institutional oversight, family offices face heightened fraud risks. External audits, segregation of duties and independent oversight reduce financial misconduct risks. Background checks and strict financial controls are essential safeguards.

Confidentiality and cultural fit: Employees must handle sensitive financial and personal information, necessitating:

• non-disclosure agreements;
• cybersecurity protocols; and
• controlled access.

Ensuring alignment with family values enhances long-term engagement.

Retention and development: Providing mentorship, leadership training and exposure to complex investments enhances job satisfaction. A structured governance framework fosters professionalism and stability, which are key to retaining skilled staff.

In Australia, the ideal approach is for family disputes within family offices to be resolved through a tiered approach, as outlined in the family agreement. These steps aim to maintain privacy and preserve relationships:

• Family council: Disputes are first addressed at family council meetings. These discussions involve an independent friend or adviser or trusted friend to facilitate a collective resolution, avoiding the costs and publicity of court proceedings.
• Mediation: If unresolved, disputes are then referred to mediation. Mediation allows the parties to reach a mutually agreeable solution with the help of a neutral mediator. This approach is particularly suited to sensitive family dynamics, helping to preserve relationships.
• Arbitration: If no resolution is reached, the dispute is then referred for arbitration. Arbitration involves a neutral arbitrator making a binding decision resolving the dispute. It is less formal than court litigation but provides a definitive resolution.
• Court: Where disputes cannot be resolved through mediation or arbitration, parties may resort to the Australian courts. However, this is usually a last resort due to:
• • the public nature of court proceedings; and
  • the risk of damaging family relationships.

Typical issues in these disputes include disagreements over:

• succession planning;
• the distribution of assets;
• governance structures;
• the roles of family members within the office;
• beaches of fiduciary duty;
• allegations of mismanagement; and
• the interpretation of legal documents, such as trust deeds or shareholders’ agreements.

Notwithstanding the above, family disputes are increasingly being heard in the Australian courts, in relation to:

• commercial matters (including trust and company governance);
• family law (eg, divorce); and
• succession (eg, challenges to wills).

Family disputes in high-net-worth (HNW) families often arise from estate challenges and divorce settlements, requiring careful structuring of trusts, corporate entities and pre-emptive governance frameworks to mitigate risk.

Will challenges and estate disputes: Under the Succession Act 2006 (New South Wales) and equivalent laws in other states, eligible persons (including spouses, children and dependants) can challenge a will if they believe they were unfairly excluded or inadequately provided for. The Courts can exercise a broad discretion in family provision claims. Family offices should consider testamentary trusts and structured gifting to reduce litigation risks.

Divorce and wealth protection: Family law courts take a broad view of the asset pool, often including trust assets and corporate structures controlled by one spouse. Courts can find that a discretionary trust is property, not a mere financial resource, if a spouse has effective control over distributions. Binding financial agreements and independent trustee control can help to shield assets, including broader family group assets, in HNW divorces.

Jurisdiction in estate disputes: The Australian courts can determine inheritance claims over foreign assets if the deceased had strong ties to Australia. Family offices managing international wealth should ensure multi-jurisdictional estate planning to prevent forum shopping and conflicting legal claims.

International divorce and asset division: Australia’s Family Law Act 1975 (Cth) allows courts to consider offshore assets in property settlements. However there is a significant risk international forum disputes, which underscores the importance of:

• pre-nuptial agreements;
• independent trustee control; and
• structured ownership of foreign assets.

Enforcement and compliance: Court orders may not be enforceable overseas. Family offices should structure assets in jurisdictions with reciprocal enforcement agreements, ensuring that trusts and corporate structures remain legally resilient across borders.

A family may decide to wind up or restructure a family office due to:

• generational shifts;
• governance failures;
• financial downturns; or
• a preference for outsourcing.

The decision requires careful consideration of:

• tax implications;
• asset restructuring; and
• continuity planning.

Governance breakdown and family disputes: In Byrnes v Kendle [2011] HCA 26, a trust dispute arose due to poor documentation and mismanagement, illustrating how governance failures can force families to reconsider their structure. When internal conflicts render a family office unworkable, transitioning to a multi-family office (MFO) or outsourcing investment management may be preferable.

Financial viability and investment performance: A family office may become unsustainable if:

• asset values decline; or
• operational costs outweigh benefits.

A downturn in property markets or equity investments could prompt a shift to professional wealth managers or liquidation of assets into simpler structures.

Generational change and succession issues: When younger family members are disengaged or uninterested in continuing the office, families may transition to an MFO or private bank structure. Tax and corporate wind-up obligations under Australian Securities and Investments Commission and the Australian Taxation Office rules must be carefully managed to avoid unintended liabilities.

The Australian family office sector is expanding rapidly, driven by:

• intergenerational wealth transfers;
• sophisticated investment strategies; and
• growing global connectivity.

Family offices are becoming more structured, professionalised and proactive in managing complex portfolios.

Prevailing trends include the following:

• Institutionalisation: Many family offices are hiring top-tier investment professionals, moving beyond traditional private wealth management to direct private equity, venture capital and ESG-focused investments.
• ESG and philanthropy: While some family offices prioritise genuine impact investing, others focus on philanthropy as a vehicle for intergenerational engagement.
• Governance and succession: More families are implementing formal governance structures, family constitutions and independent advisory boards to navigate generational transitions.

Legislative and regulatory activity to watch out for includes the following:

• Australian Taxation Office oversight: Heightened scrutiny of:
• • trust distributions;
  • offshore holdings; and
  • intergenerational tax planning.
• Financial services licensing: The Australian Securities and Investments Commission may expand Australian financial services licensing requirements for family offices that function similarly to multi-family offices.
• Superannuation and tax reform: Potential adjustments to superannuation caps and estate planning frameworks could reshape structuring strategies.

Key considerations when operating a family office in Australia include the following:

• Structuring with precision: The legal structure should align with the family’s wealth, objectives and governance needs. Companies, including companies limited by guarantee, are now often used as appointors of discretionary trusts. However, this streamlined efficiency must be balanced against concentred control and increased regulatory oversight. Companies limited by guarantee are subject to the public companies regulatory regime under the Corporations Act 2001 (Cth).
• Governance and decision-making: A clear governance framework is essential. Family offices frequently rely on family constitutions (typically non-binding) or family agreements (binding) to define decision-making authority, oversight mechanisms and succession planning.
• Regulatory compliance: There is no specific regulatory regime in Australia; however, family offices must comply with Australian laws generally, including:
• • the Corporations Act 2001 (Cth);
  • anti-money laundering/counter-terrorist financing laws;
  • privacy obligations; and
  • employment laws.
• Activities may require an Australian financial services licence or credit licence, and co-investments should be assessed against the managed investment regime.
• Succession: Australia has no inheritance tax, but poor structuring can result in:
• • duty;
  • capital gains tax liabilities;
  • superannuation death benefits tax;
  • an inability to make further family trust elections; and
  • unintended consequences or disputes.
• Talent and incentives: Equity participation, phantom share plans and performance incentives can align employee interests with family objectives.
• Cybersecurity and ESG: Family offices are high-value cyber targets, requiring strong data protection. ESG and philanthropy should be embedded in governance.

Potential risks include the following:

• Family disputes and control struggles: A lack of clarity in decision-making rights fuels disputes. While most family agreements and constitutions include dispute resolution mechanisms, their enforceability must be carefully considered – particularly concerning parties and subject matter (eg, see Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13).
• Trust compliance risks: Trust structures are common among high-net-worth (HNW) Australian families but are frequently mismanaged. Owies v JJE Nominees Pty Ltd [2022] VSCA 142 underscores the fiduciary duties of trustees, reinforcing that even where a trust deed grants ‘absolute and uncontrolled’ discretion, trustees must still give real and genuine consideration to all beneficiaries.
• Expanding regulatory burden: As family offices scale, their investment and financial activities may attract heightened regulatory scrutiny. Increasing compliance obligations may necessitate licensing, enhanced reporting and corporate governance adjustments.
• Tax traps and Australian Taxation Office (ATO) oversight: The ATO maintains intensive oversight of HNW taxpayers through targeted compliance programmes, including:
• • the Top 500 Private Groups Tax Performance Program, which monitors Australia’s wealthiest private groups for tax governance and compliance;
  • the Next 5,000 Program, focused on HNW individuals managing significant assets outside the Top 500; and
  • the High Wealth Private Groups Program, targeting individuals with net wealth exceeding A$50 million, scrutinising aggressive tax planning and enforcement risks.