Family office and family investment company are two terms that appear frequently in conversations about wealth management. They are often used interchangeably. They should not be.
They describe different things, serve different purposes, and are appropriate at different levels of wealth. Understanding the distinction is the starting point for understanding which one — if either — is relevant to your situation.
What a Family Office Is
A family office is an organisation. It is a dedicated team of professionals — investment managers, accountants, legal advisers, administrators — employed by a family to manage their financial affairs. It is not a legal structure. It is a service model.
A single-family office serves one family. A multi-family office serves several families, pooling resources to make the service economically viable for each. The distinction matters because a single-family office requires sufficient assets to justify the cost of a dedicated team — typically estimated at £50 million to £100 million in investable assets, depending on the complexity of the family's affairs.
Below that level, a traditional family office is not economically viable. The annual cost of a dedicated team — salaries, office space, professional indemnity insurance, technology — exceeds the value it creates for families with less than £50 million in assets. This is why most families in the £5 million to £50 million range are not served by family offices. They are served by retail wealth managers, IFAs, and accountants — professionals who are competent but who are not coordinating the family's affairs as a system.
What a Family Investment Company Is
A family investment company is a legal structure. It is a private limited company, incorporated under the Companies Act, that holds investments — shares in trading businesses, property, funds, or other assets — on behalf of a family.
The FIC is not a service model. It does not employ a team. It is a vehicle — a holding structure that sits above the family's assets and provides a framework for managing them efficiently. The family members are the shareholders. The directors — typically the founders and, over time, the next generation — make the investment decisions.
The FIC is appropriate at a much lower level of wealth than a family office. A family with a trading business worth £3 million, a property portfolio worth £2 million, and significant annual profits can benefit from an FIC. The cost of establishing and maintaining it — company filings, accountancy, legal advice — is a fraction of the cost of a family office team.
What the FIC Does That a Family Office Does Not
The FIC is a tax structure as well as a governance structure. Profits that accumulate inside the FIC are subject to corporation tax rather than income tax. When family members need personal income, they extract it as dividends at dividend tax rates, which are lower than income tax rates for higher-rate taxpayers. The FIC can hold different classes of shares — alphabet shares — that allow income to be distributed differently to different family members, optimising the tax position across the family.
A family office does not provide these benefits directly. It manages assets that are already held in whatever structure they are in. If those assets are held personally, the tax treatment is personal. The family office can advise on tax planning, but it does not change the underlying structure of ownership.
What a Family Office Does That an FIC Does Not
A family office provides active management. It employs people who make investment decisions, manage relationships with external advisers, coordinate across different asset classes, and handle the administrative complexity of a large and diversified estate.
An FIC does not provide active management. It is a structure, not a service. The directors of the FIC make the investment decisions. If the family does not have the expertise or the time to manage the assets themselves, an FIC alone is not sufficient — they still need external advisers, even if those advisers are not organised as a family office.
The Self-Administered Model
The model that fills the gap between the FIC and the traditional family office is the self-administered holding structure. It combines the legal and tax benefits of the FIC with a governance framework that allows the family to manage their affairs without a dedicated team.
The holding company sits above the trading business and any investment assets. Alphabet shares separate voting control from economic rights. A family trust holds growth shares and captures future appreciation outside the estate. A simple governance framework — regular meetings, clear decision-making principles, defined roles for the next generation — provides the coordination that a family office would otherwise provide.
This model is appropriate for families with assets between £3 million and £50 million. It is more sophisticated than a standalone FIC and significantly less expensive than a traditional family office. It provides the tax efficiency, the governance structure, and the succession framework that families at this level need — without the overhead of a dedicated team.
If you are trying to understand which model is appropriate for your situation, the Discovery Call is the right starting point. The choice between a standalone FIC, a self-administered holding structure, and a traditional family office depends on the size and complexity of your assets, your family's circumstances, and your goals for the next generation. Ten minutes to map the position is the right first step.