Why Your ‘Family Office’ Might Actually Be an Investment Office
From the MGD Private Pulse series
Insights for UHNW individuals and family enterprises.
The term family office has grown to describe almost any coordinated effort to manage wealth. Yet many of these structures are, in practice, an investment office with a far narrower remit than families realise.
Investment capability is frequently the first part of a family’s affairs to mature. It develops structure, reporting, and rhythm; it introduces policy, process and discipline; and it naturally becomes the most visible element of the enterprise. As a result, families often assume they have a family office when what they truly have is an investment office—highly capable and deeply valuable, but narrower than the family may expect.
This edition of MGD Private Pulse features insights from Stephen Furness, Chief Investment Officer at MGD Private. With more than three decades advising Australia’s leading business families, Stephen’s work sits at the intersection of strategy and stewardship—designing investment governance frameworks, chairing client investment committees, and formalising the charters and delegation structures that support disciplined decision-making. His experience gives him a clear view of how families describe their “office” arrangements, and where the labels of family office and investment office often diverge from the underlying reality.
The Expanding Use of ‘Family Office’
The concept of a family office once referred to a clearly defined model: a private, coordinated structure that supported a family’s financial, structural and personal affairs across generations. Today, the term is used far more broadly. It may describe a sophisticated multi-disciplinary team, a long-standing adviser relationship, or a collection of roles and responsibilities that have evolved organically over time.
Because investment capability often becomes the first part of the enterprise to mature—producing reporting, structure, and process—it can naturally take on the appearance of a family office. Families may begin to assume that this investment-led structure holds a wider governance role than it actually does, particularly when it is delivered by trusted people who are deeply familiar with the family’s affairs.
What an Investment Office Does Exceptionally Well
An investment office is designed to govern capital. It provides discipline in decision-making, sets policy and risk parameters, constructs and monitors portfolios, evaluates opportunities, and delivers structured reporting. It often becomes a family’s most visible and formalised function, especially after a liquidity event or when wealth grows in scale or complexity.
Its work necessarily touches matters such as liquidity planning, diversification, tax implications and intergenerational investment preferences. These touchpoints can create the impression that the investment office is governing the broader enterprise. In reality, it is fulfilling a specific and specialised mandate: stewarding the capital, not the family.
For many families, this capability is precisely what they require.
Where a Family Office Sits in the Ecosystem
A family office carries a different purpose. Its work spans governance, communication, continuity and coordination. It helps a family articulate long-term intentions, establish principles for decision-making, prepare the next generation, integrate the work of specialist advisers, and navigate transitions in ownership, leadership or structure.
A family office does not replace the investment function; it provides the context through which investment decisions make sense. It handles the questions that sit behind the portfolio—purpose, priorities, participation, timing and legacy—rather than the portfolio itself.
Why These Roles Are So Easily Confused
Investment governance has its own formal architecture—committees, mandates, policies and reporting cycles—that can resemble broader enterprise governance. It is also often delivered by the professionals a family interacts with most frequently. This creates a sense of structure and cohesion that, while very real within the investment domain, can be mistaken for whole-of-enterprise governance.
The result is a natural, often unintentional blurring of terms: an investment office that looks and feels like a family office, even when its remit is narrower.
Where the Differences Reveal Themselves
The distinction between the two structures becomes sharper in moments of transition rather than in steady states. Business sales, leadership changes, major distributions, structural decisions and succession considerations all raise questions that span across family, business and financial lines. These decisions call for principles, communication frameworks and cross-adviser coordination—not solely investment expertise.
An investment office engages thoughtfully with these issues, but it is not designed to set the governing principles that lie behind them. These are questions of governance, cohesion and continuity, not portfolio construction.
How MGD Private Makes Sense of the Entire Enterprise
Over decades of advising families, MGD Private has observed that most enterprises operate across several natural domains, whether formally recognised or not. These include the Family Office, which supports communication, cohesion and generational continuity; the Corporate Office, which governs the operating business and the relationship between owners and leaders; the Investment Office, which governs the capital; and the Private Office, which supports individual family members’ personal affairs.
To bring coherence to these domains, MGD Private applies a framework known as Family Enterprise Governance. This framework helps families understand how the distinct parts of their enterprise influence one another and how decisions in one domain affect outcomes in the others. It does not create additional layers; rather, it clarifies the landscape so families can make informed, coordinated decisions that reflect their intentions.
The Question That Brings True Clarity
Instead of asking whether they have a family office, families gain more clarity by asking what their current structure actually governs—and whether that aligns with what they need governed. For some, investment governance is the right and sufficient focus. For others, the complexity of their affairs points to a broader governance approach.
Recognising the difference between a family office and an investment office does not diminish either role. It simply provides the clarity required to support confident decision-making, smoother transitions and the long-term continuity of the family enterprise.
Do you know what your current structure actually governs?
For some families, the answer is clear; for others, the lines have blurred over time. Understanding whether your arrangements function as an investment office, a family office or a combination of both is a valuable step toward ensuring the enterprise can respond with cohesion when decisions matter most. If greater clarity would support your planning, the MGD Private team can help you assess the path forward. Learn more about our MGD Private team.
MGD Private Pulse is a series from MGD Private exploring the issues that matter most to ultra-high-net-worth individuals and family enterprises. MGD Private represents the specialist private-client capability within MGD Group, guiding Australia’s leading business families who continue to own and shape significant enterprises with discretion, precision and enduring care.
Important Note:
Financial advice is provided by MGD Wealth Ltd. AFSL 222600, ABN 53 009 079 725. Stephen Furness is a Representative of MGD Wealth Ltd. Any advice included in this article is general and has been prepared without taking into account your objectives, financial situation or needs. As such, you should consider its appropriateness having regard to these factors before acting on it. Before you make any decision about whether to acquire a certain financial product, you should obtain and read the relevant product disclosure statement.
Tax advice is provided by MGD Tax, ABN 22 355 316 063.
Liability limited by a Scheme approved under Professional Standards Legislation.
