Conflicts of interest policies for family offices: what to include

A family office conflicts of interest policy identifies the situations in which a person's private interest could affect a decision made for the family, requires those situations to be disclosed before the decision is taken, and sets out who then decides and on what terms. For a family office the recurring conflicts are related-party transactions between the office and family businesses or family members, the employment and pay of family members, co-investment by staff or family members alongside the office, and the use of office resources for personal purposes. The policy is short. The disclosure log that sits behind it is what makes it work.

Why family offices need one

A single family office has fewer external constraints than a regulated manager. In the United States, the SEC's family office rule, adopted on 22 June 2011 as Rule 202(a)(11)(G)-1, excludes from investment adviser registration an office that serves only family clients, is wholly owned by family clients and controlled by family members, and does not hold itself out as an adviser. Offices that qualify are outside the Advisers Act's conflict rules. The discipline has to come from the family's own documents.

The structural exposure is high. Bank of America's 2025 Family Office Study of 335 North American offices found two-thirds employ two or more family members, 48% share employees with the family business, 52% share a wealth management platform with it and 85% have a family business currently generating wealth for the office. J.P. Morgan's 2026 report found about six in ten families currently have an operating company. Every one of those links is a potential related-party transaction.

Policy coverage lags the exposure. J.P. Morgan's 2026 summary data, reported by Caproasia, show 22% of offices with a formal employment policy. Bank of America found 63% with a policy on family members working in the family business, rising to 76% among offices that share employees with it. There is no published survey figure for the share of family offices with a written conflicts policy; the figures above are the closest proxies and suggest a minority.

What the policy covers

Citi's 2025 Global Family Office Report found 46% of offices have no client service agreements, which is the document that would define who the office works for and on what terms, and 72% have formal separation from the family business. The 28% without separation are the ones in which related-party flows are least visible.

Related-party transactions

These are the highest-value conflicts. The standard sequence is disclosure by the conflicted party, recusal from the decision, an independent valuation or market check, approval by the non-conflicted members of the board or committee, and a minute that records the terms and the basis for approval. Where the office has no independent directors, which J.P. Morgan's data suggest is the case for about two-thirds of offices, the shareholders' agreement can reserve related-party transactions above a threshold for approval by all owners. The role of outsiders in these decisions is covered in independent directors and advisory boards.

Co-investing alongside the office

Co-investment is where conflicts are least often written down, because it is seen as alignment rather than conflict. It is both. A staff member who invests personally in a deal is aligned on the upside and conflicted on the sizing, the timing of exit and the allocation of follow-on capital. A policy should state who may co-invest, whether on the same terms as the office, whether pre-clearance is required, the maximum personal allocation relative to the office's, and how carried interest or fees paid by the deal to any individual are disclosed. The same rules apply to family members investing personally in deals sourced by the office, a case discussed further in club deals and how families syndicate.

The disclosure log

The log is a register, maintained by the general counsel, chief operating officer or an independent director, recording each disclosed interest, the date, the decision taken and who took it. Annual attestations from staff and family members in governance roles refresh it. The log is reviewed by the board or audit committee once a year. Its value is less in catching misconduct than in protecting the people who followed the process when, years later, a family member asks why a transaction was approved.

A conflicts policy costs little and is rarely tested. When it is, usually during a succession or a dispute between branches, the family discovers whether the office kept the log or merely wrote the policy.