Within a multi-family office, a portfolio is built for one family at a time: it starts with that family’s goals, spending, taxes, existing holdings and constraints, is written into an investment policy, and is then filled with managers and investments chosen from the whole market. The office’s research and buying power are shared across families, but the allocation, the managers used and the pace of change are specific to each family.

Step 1: Understand the Family’s Full Balance Sheet

Construction begins with what the family already owns: operating businesses, concentrated stock, real estate, trusts, private investments and accounts at different banks. A family whose wealth is concentrated in one industry needs a different liquid portfolio from a family that has already diversified. Taxes, existing gains and legal structures also shape what is practical.

Step 2: Write the Investment Policy

The investment policy statement records objectives, time horizon, risk tolerance, liquidity needs, spending, restrictions (for example, values-based exclusions), target allocation ranges, benchmarks and who approves decisions. It is the reference point for every later choice.

Step 3: Set the Strategic Asset Allocation

Asset allocation, the mix of cash, bonds, public equities, private investments and real assets, drives most of a portfolio’s long-term behavior. The allocation reflects the family’s need for return, its ability to tolerate declines and illiquidity, and its cash-flow needs over the coming years.

Step 4: Select Managers and Investments

In an open-architecture firm, the advisor can recommend any manager or strategy rather than a proprietary product list. For each slot in the allocation, the choice is between low-cost index exposure and active managers where skill is more likely to add value after fees. Private investments are added gradually, according to a commitment plan.

Step 5: Implement Carefully

Moving from an existing portfolio to a new one involves taxes, timing and sometimes lock-ups. Implementation is often phased: using cash and tax losses first, trimming concentrated positions over time, and committing to private funds across several years.

Step 6: Monitor, Rebalance and Report

Consolidated reporting shows the whole portfolio, including fees, across custodians and managers. The family and advisor review results against benchmarks, rebalance when allocations drift outside their ranges, and update the policy when the family’s circumstances change.

Why Fee Transparency Matters

A portfolio’s true cost includes the advisor’s fee, each manager’s fees, fund expenses, custody, trading and, in private funds, carried interest. Families should see each layer and the total. Investor.gov’s guide to understanding fees shows how much a small difference compounds over time.

How WE Family Offices Constructs Portfolios

Our Investment Strategy services are built around each family’s specific needs and keep the family involved at every step. They include asset allocation and portfolio construction, sourcing and due diligence, fee evaluation, negotiation and quality control, values-aligned investments, oversight and market updates, and consolidated reporting.

Our investment views come from our Strategic Investment Committee and are put into practice through our Implementation Committee, supported by manager research. Each family’s portfolio can be a bespoke combination of public and private investments. We are non-discretionary, so the family approves the policy and each significant change, and we are paid only by our clients, with no commissions from any manager.

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