Family offices have grown rapidly as a sector inside and outside North America. Success also brings attention, such as from regulators. It also requires the sector to be more professional in its processes. This article takes a brief tour of the territory.

The author of the following article is Joshua Becker (pictured below), a corporate and tax partner, advising  founders, emerging companies, investment funds and family offices. He works at Pillsbury Winthrop Shaw Pittman LLP in New York. His practice includes advising clients on the tax and non-tax aspects of mergers and acquisitions, fund formations, hedge funds, emerging company investments, family office operational and investment structures, and real estate joint ventures and investments.

The editors are pleased to share these insights, for example how family offices are becoming more institutionalized, and possibly face rising regulatory scrutiny. The usual editorial disclaimers apply to views of guest writers. To comment, email tom.burroughes@wealthbriefing.com and amanda.cheesley@clearviewpublishing.com

Joshua Becker

Family offices are in the midst of a dramatic transformation. Once little more than administrative outfits run by trusted family advisors, these offices have evolved into some of the most sophisticated investment organizations in the world.

Traditionally, a family office might have been led by a retired trust and estates attorney – someone who had long managed the family’s wills, trusts, and tax strategies. Their role was largely administrative: overseeing wealth preservation, coordinating with bankers, and ensuring compliance with estate planning needs. The emphasis was on stewardship, not strategy.

That model, however, is rapidly becoming obsolete. Today’s family offices increasingly resemble professional investment firms. Many now compete directly with private equity shops, hedge funds, and large institutional investors. To operate at that level, families are recruiting directly from Wall Street – poaching professionals from investment banks, private equity partnerships, and hedge funds. This shift reflects not only the staggering growth of private wealth in recent decades, but also a fundamental change in how wealthy families deploy their capital.

From passive stewards to active investors
For much of their history, family offices were passive allocators. Capital was farmed out to third-party managers while the family office itself served primarily as a gatekeeper and record-keeper. That approach no longer aligns with modern ambitions. Today’s family offices are moving aggressively into direct investments – buying stakes in private companies, co-investing alongside institutional investors, and in some cases leading deals themselves. This strategy offers more control, better alignment with family values, and the potential for outsized returns by cutting out the layers of fees charged by traditional managers.

But with opportunity comes complexity. Direct investing demands sophisticated deal sourcing, rigorous due diligence, and the ability to structure transactions that maximize both value and protection. The old guard of family advisors was often ill-equipped to handle these demands, prompting a talent shift toward seasoned Wall Street professionals.

This evolution was underscored recently when Jeff Bezos’s father announced that he was hiring a CEO to run his family office – a clear signal that wealthy families no longer see their offices as passive caretakers of wealth, but as active, institutional-grade players in global markets.

Further institutionalization
Professionalization extends well beyond talent acquisition. Many family offices now operate with the same governance, reporting, and risk management practices as institutional investment funds. They are building in-house teams dedicated to compliance, analytics, and ESG (environmental, social, and governance) oversight. Some have developed internal structures that rival mid-market private equity firms in both scale and sophistication.

Legal structuring is also growing more complex. As family offices evolve, they often adopt partnership-like entities that mirror private equity or hedge fund models. These structures allow for compensation and incentive equity packages that attract and retain non-family professionals while maximizing tax efficiency and asset protection for family members. The result is a virtuous cycle: institutional-grade structures attract top-tier talent, which in turn enhances both investment opportunities and protections for the family.

A regulatory reckoning on the horizon?
As family offices expand in size, influence, and market participation, questions are beginning to arise about whether the current legal framework will hold. Today, family offices operate under relatively light regulation compared with traditional investment funds. But with trillions of dollars under management, that could change.

Regulators may eventually extend disclosure requirements, tighten compliance standards, or revisit tax treatment. The Securities and Exchange Commission has already expressed concern about the opacity of private markets, and family offices – many of which help keep companies private longer – may soon face greater scrutiny. For now, their freedom from many regulatory constraints remains a key attraction for both families and the professionals they recruit. Still, it seems unlikely that such a massive and growing sector of the economy will remain unexamined for long.

What this means for professionals and markets
The rise of the professionalized family office is reverberating across industries. For law and accounting firms, the question is whether family offices will become as dominant a source of transactional work as private equity has been for the past two decades.

For finance professionals, family offices may become an increasingly appealing career destination. They offer competitive compensation, the chance to work closely with entrepreneurial families, and often fewer regulatory burdens than public funds.

The broader market implications are equally significant. As more capital is deployed through sophisticated family offices operating in less regulated environments, companies may stay private longer, reducing the flow of high-quality firms into public markets. This could shift the balance of capital further away from Wall Street and into private hands.

The road ahead
The professionalization of family offices marks a fundamental shift in global wealth management. With trillions of dollars poised to transfer between generations in the coming decades, these offices will only continue to grow in number, scale, and sophistication.

What began as small administrative operations serving a single family’s needs have, in many cases, become powerful investment engines. They are reshaping not only the future of wealth preservation but also the structure of private capital markets. And by all indications, this is only the beginning.