How to Determine Whether Your Family Office is Successful

Charlie Carr • January 11, 2026

Last year, someone asked me a simple question that led to quite a bit of thought and discussion: How do I know if my family office is successful? The most common initial answers (investment returns, tax benefits) feel flippant and incomplete. One former family office president said, “I considered each year a success if I didn’t screw anything up … (long pause) badly.”

What became clear is that very few family members or office leaders had thought about this question. If they measure success at all, their assessment is based on total expenses or investment returns, because these are the easiest factors to quantify.

If you don’t know how to define success, then how can you properly do strategic planning or decide where to focus new resources?

Derailers of success

We believe that most initial responses to this question are derailers of success rather than measures of success. In other words, good performance in these areas does not define success for the office, but poor performance can take the office off the track toward success. Here are a few examples:

Investment returns: Great investment returns generally do not make a family office successful, but messing up investments can make the office a failure. If a large investment flames out, or even if returns significantly trail their benchmarks, the family may place the blame on the office and its leadership.
Taxes: The family office might minimize tax liabilities and provide excellent tax planning, but this may be viewed as just doing its job. Losing an IRS audit or realizing that the family could have saved millions of dollars with better tax planning before selling a business or investment may define failure for the office.
Fraud: Discovering that an employee stole from the family or perhaps uncovering how an outsider successfully committed fraud may make the office appear to be a failure. If there wasn’t any fraud last year, or at least none that you are aware of, the perspective may be that the office did what it was supposed to do. But does that mean it was successful?

If you don't know how to define success,
then how can you properly do strategic planning
or decide where to focus new resources?

Service: Most family office staff will go to extreme lengths to provide any service or support that the family desires. Often, such efforts become expected and don’t constitute success, whereas not doing so may be an irritant or failure in the family’s view.
Total cost: One family member told us he viewed the family office as a bottom-line number: “Do we really need this many people?” We doubt many people consider staying within budget to be their definition of success.

Each of these things may be compared to the starter on your car. When you turn the ignition (or press the button on many cars), you don’t think about whether or not the car will start, unless you recently had problems with it. Being able to start the car doesn’t guarantee that the journey will be successful, but if the car does not start, the journey will likely be a failure.

What is success?

The definition of family office success will vary, depending on the family and the office. What is the purpose for the family office? Most often, even when the family hasn’t defined it explicitly, the purpose is to promote the family’s legacy. How well does the family office support the family’s vision and hopes for the future, in addition to supporting their financial ability to pursue these dreams? This likely has more to do with maintaining family unity and cohesion, maximizing the family’s human capital (rather than financial capital) or seeing an entrepreneurial spirit and passion persist in future generations.

In the earlier analogy of starting your car, the car is a means to support your journey, whether that is to the grocery store or on a vacation. A family office is part of the means for a family to achieve its vision or legacy — the vision or legacy is more important than the office.

Once you identify how you will define success, you need a

reporting dashboard to track it.

One family told us their family office’s purpose was to “remove the burdens of wealth from the talent [next-generation family members], so they can focus their time and attention on the business.” For this family, success can be measured by how much work has been removed from the family members. Another family told us that the founder has very strong values, and they will measure success by whether or not the values remain after the founder passes away. This is harder to measure but an admirable objective.

It is not an easy exercise, and it requires being intentional in thinking through your purpose and identifying how you will define success.

Measuring success

Once you identify how you will define success, you need a reporting dashboard to track it. This should be a one-page report, measuring not just the primary measures of success, but also the derailers. A good report will track what will make the office a success, as well as factors that could prod the family to say it is a failure. The measures should be both short-term (e.g., How we are doing this year?) as well as long- term (e.g., How we are doing over five years?).

The easy metrics are typically the derailers: total expense, investment returns, tax liability and fraud. How do you report on fraud? If you were a victim of fraud, you obviously report that. If you are not aware of being a fraud victim, perhaps you report results from accounting controls or from your regular ethical phishing tests (because you are doing those, right?).

How do you measure family members’ entrepreneurial spirit and passion? One family decided that a partial answer was to track the percentage of family members whose earned income is at least as much as the distributions they receive. This is not a clean proxy, but it’s moving in the right direction. Another family tracks level of academic degrees earned and ongoing educational efforts.

One might wonder how the family office can impact or influence these results. Once you understand the vision and desired legacy for the family, the office leadership can get creative in helping them move toward that vision. If education is a big part of that, then the family office can help each family member find ways to further their education or participate in relevant conferences or seminars. If entrepreneurship is important, the office might find relevant speakers for the family retreat as well as provide one-on-one coaching.

Supporting a multigenerational family legacy is never easy, but don’t let the challenge deter you from putting in the effort. Start with intentionality, then add creativity from your leadership team and a lot of hard work — and prepare to celebrate the success of your family office.

Originally published in Family Business Magazine, January / February 2020

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By Charlie Carr • December 31, 2025

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Why Should I Allow an Outsider to Review my Family Office?

By Charlie Carr • June 20, 2021

Why should I allow an outsider to review my family office? This is a key question we frequently encounter. One of the primary purposes of your family office is to maintain the privacy of the family. If you allow someone to spend time in your office, understanding the services, processes and procedures, then you are giving up elements of that privacy. Why would you do that? What could the family office gain? A better question might be, “what do you have to gain?” Could there be risks or gaps that you haven’t thought about? Are there holes in your control processes? Could you better serve the family by bringing some services in-house, or perhaps by outsourcing something you currently do in-house? What additional services might you consider providing for the family? Are there ways to deliver your services more efficiently or effectively, perhaps allowing your team to expand their offering? Do your reports to the family provide them the information they want and need? Are you effectively using technology? And, not to step too hard on your toes, but when you changed your bill pay and approval processes during the pandemic, did you look at your controls to ensure they are still relevant and effective? If fraud were to occur, where is it most likely to happen? What is a family office diagnostic? We have worked with a wide variety of family offices over nearly 20 years, and are often challenged to come up with creative ways to add controls (e.g., how do you segregate accounting duties in a one-person office?) or enhance an offering. A family office diagnostic shows how your office compares to other family offices, gives you a quantitative grade, and most importantly, provides a series of recommendations for how to improve the office – risk management, effectiveness and efficiency. Such a diagnostic can be a great prelude to creating strategic plans , as you prepare to service the family’s next generation or consider technology upgrades. As for the privacy issue that we opened with, we will zealously guard the family’s privacy; our continued business depends on our discretion. Please reach out and let’s discuss a family office diagnostic.

Family Business Dividend Policy Creation

By Charlie Carr • April 9, 2021

Over the years, I've really enjoyed working with the various people at Family Business Magazine, and am honored to have another article published in the current edition. I've had many questions over the last few years about how family businesses should make distributions to owners, and I finally wrote my thoughts on the topic. Being thoughtful on this topic, involving the various family owners in documenting philosophy and approach, can go a long way toward building family harmony. I hope you enjoy this article. Please reach out about creating a vision and strategic plan to support your legacy.

Family Business Charitable Contributions

By Charlie Carr • February 23, 2021

One of our family business clients recently asked for a benchmark or assistance in setting an amount for charitable giving from the business. What a great question! The challenge is that family businesses have such different goals, values and approaches; it is difficult to compare them to each other. Most family businesses are at least doing nominal charitable giving, such as sponsoring youth sports and local schools or perhaps in-kind donations of whatever product or service they provide. Many family businesses do this without tracking them or even much thought. When it comes to larger donations, businesses have to think about why they are making them. Some businesses make donations as public relations, perhaps instead of advertising and marketing. These businesses may have larger donation budgets than others, as it combines marketing with charitable desires. Some businesses make very few donations, explaining that they distribute money to owners and encourage them to donate personally. A few family businesses we know have used the Biblical-tithe as a rule, giving a tenth of their net income, either donating in-year or perhaps setting up a foundation or donor-advised fund. Some businesses set a fixed amount annually, based perhaps on what they did in the past or a number that “feels” right. Other businesses choose to make donations in particularly good years, or perhaps when they sell a line of business or a particular property. One conversation we’ve held many times is about how important it is to ensure that donations from the business match the family’s shared values while ensuring they support (or at least do not detract from) the business’ goals. In other words, if a donation could lead to bad social media or alienate groups of customers, or if perhaps the recipient organization only matches the values of a subset of owners, then the business should not make the donation. Focus on where the family and its values are in alignment, and ignore the areas where they disagree. None of this musing answers our client’s question about how much they should budget for charity each year. We would love to hear from you on benchmarking charitable giving – how has your family business set amounts for such donations? Please reach out about creating a vision and strategic plan to support your legacy.

Vision Provides Boundaries for What Not to Do

By Charlie Carr • December 18, 2020

In working with families, family businesses and family offices on their vision and strategic plans, we’ve long discussed how the vision and values should identify where to focus your efforts and attention. Many times, we’ve looked at business opportunities and evaluated whether they aligned with the family’s values, as well as their vision. We’ve targeted investments, new businesses, philanthropic initiatives, succession plans, training programs, and much more based on their desired future-legacy. This has been a clear benefit of knowing who you are, where you want to go, and what is important to you. You can choose to change your vision, but don’t operate outside of it. As I created the vision and values for Big Canyon Advisors, I was reminded of another benefit to having a clear vision and purpose: providing boundaries about what not to do. I am focused on inspiring families to achieve their legacy for the next 100 years; spending time on activities that don’t support that vision is a distraction, limiting my success. Recently, several people have approached us about referral opportunities with good, solid companies. However, while such arrangements could be profitable for the business, since they are not within the vision (and are potential conflicts of interest), we have declined these opportunities. Our vision statement has helped us understand not just where we are going, but also where we should not go in order to stay on track. Having a clear vision and strategy for the family and business keeps us moving toward our goals, while also providing boundaries to help us say “no” to things that could distract or waylay us on the path toward success. This is just as true of the families, businesses and family offices with which we are working. Please reach out about creating a vision and strategic plan to support your legacy.

Welcome

By Charlie Carr • October 29, 2020

Welcome to Big Canyon Advisors! After more than 30 years of working for large companies, and nearly 20 years focused on family businesses and family offices, I took the leap to start my own consulting firm. I have been inspired by the entrepreneurial spirit of many of the clients I’ve advised over the years. We will use this blog site to share insights into some of the common challenges we find across our clients, and hope to hear back from you, with your own insights and experiences. Our intent is to have a fresh post at least monthly, so please check back. Thank you for visiting. Charlie