Historically, family wealth would be passed to a large investment adviser who would, on a discretionary basis, invest via a spread of investments to give a guaranteed return on the wealth. The adviser would charge between 2% and 5% annually.

The role of the investment adviser or IFA continues today for many families. However, the rise of the super rich has caused those families to have sufficient leverage that employing advisers just to look after individual families has become an established norm. 

Retired investment advisers have become family retained advisers. Those retained advisers would understand the families risk appetite better and have better and more personal connections to invest the money. This is particularly true in relation to alternative investment funds like hedge funds and private equity. 

We have seen cornerstone investors in new funds coming from families rather than traditional investment funds. We have also seen parallel investments from families with financial sponsors in buyouts. 

High profile individuals like Carl Icahn and the Warren Buffett have invested in public companies. However, the latest trends show family offices are morphing, in effect, into new investment banks.

Increasingly, as the big bulge banks shrink corporates are more reluctant to pay corporate deal advisory fees (though financing fees are still accepted and the investment banks are moving more to finance advisory rather than deal advisory). The historic "big dogs" of the deal world are moving to become advisors to the super rich families.

Those advisers are using their skills of the trade to act in the same way as they did in the bulge banks, but as they are retained advisers to individual families they are acting without being regulated.

Families will argue they don't need to be regulated; It is their money and they can do what they want with it. But, as family offices grow in importance, particularly in the public markets, there is a danger that the distinction between regulated activities and unregulated activities become blurred.