A family needs at least $100 million in assets to make it worthwhile to establish a single family office, which typically costs about $3 million a year to operate, according to a new study by the Wharton School, the US business school.

About 1,000 single family offices operate around the world. More than half the SFOs are managing family wealth of more than $1 billion, the study said.

Among Wharton’s survey participants, 58 per cent remain involved in operating businesses, and 77 per cent indicated that they are majority stakeholders in holding companies they founded.

The level of involvement in the family business, however, varies widely by geography. Only 40 per cent of US families in the sample are involved in the family business, compared to 70 per cent of the Europeans and 89 per cent of those from other parts of the world.

The average SFO in the Wharton sample serves 13 households within the same family group, covering 40 family members and two to three generations. The median SFO serves four households and eight family members, according to the survey.

The most important objective for the SFO, according to 57 per cent of the survey respondents, is trans-generational wealth management. The second, selected by 39 per cent of the respondents, is to consolidate accounting, tax and estate planning services.

From interviews, the GFA research found that other common reasons for having an SFO include freedom of career choice for family members; cost-effective money management; stable, controlled and scalable asset management; development of trustworthy and loyal employees, and cheaper document administration.