Use Case: Reducing a Family Office's Cost Base
How we brought a $1.5bn single family office's running cost from nearly 0.9% to around 0.4% of assets, by reworking five parts of its operating model.
In brief
A single family office of roughly $1.5bn was spending close to 0.9% of assets a year to run itself, against an industry norm nearer 0.4% at that scale.* The cost had become a drag on performance. We reworked five parts of the operating model: staffing, access to external advisers, fees, the investment mix, and idle lifestyle assets. The family recovered roughly 0.5% on assets a year, money put back to work instead of absorbed by overhead.
Context
A single family office built around roughly $1.5bn in assets was spending close to 0.9% a year simply to run itself. Comparable offices of that size operate nearer 0.4%.* The difference had stopped being a line item and started being a drag on every return the office produced.
Cost rarely arrives in one decision. It accumulates. A senior hire here, a new adviser there, an asset kept for sentiment rather than sense. Each step looked reasonable on its own. Together they had pushed the office well past what its work required.
The family asked us to bring the cost base back in line and to rebuild how the office ran day to day.
The situation
A family office is a tool. Its job is to serve the family, efficiently and quietly. When the cost of running it begins to compete with the performance it is meant to protect, the tool has drifted from its purpose.
That was the position here: the structure had grown faster than the needs behind it. The first task was to separate what the family genuinely used from what the office had simply kept.
We worked through five parts of the operating model.
The five levers we used to reduce the cost base
1. Staffing
Over the years the office had collected too many senior profiles and too much overlapping responsibility. Titles had multiplied; clear ownership had not.
We resized the team against the real work of the office, not its history. We also recalibrated pay so that it tracked performance rather than the size of the assets under management. An office should not become more costly to a family simply because the portfolio grew.
2. Access to external advisers
Too many people inside the office could call a lawyer, a tax specialist or a banker directly, with no coordination and no budget control. Legal, tax and banking costs had drifted upward for years, one uncontested invoice at a time.
We put a single point of coordination in place. Advisers are still used where they add value. They are now used on the family's terms, against a scope the office sets. (We take the same view on how families should manage their providers and fees.)
3. Fees
No one in the office had the job of renegotiating what providers charged. Fees were set once and rarely revisited. Left unchecked, they did what fees always do. They grew, in places to three times the market rate.
We renegotiated banking and wealth management fees across the board. A few basis points are not a rounding error on a portfolio of this size. On the US equity holding alone, a single negotiation saved roughly 0.3% a year on $170m. Compounded at around 8% over ten years, that one change added close to $10m to the family's wealth. Hardly negligible.
4. Rationalising the investment mix
A meaningful part of the portfolio was small residential property, managed directly by the office. The holdings were modest in value and heavy in attention. They consumed staff time and administration out of all proportion to what they returned. This is the pattern we see most often: the cost of running a family office is driven by what the office does and the nature of what it holds, far more than by the headline value of the assets. (We explore this in detail in our guide to family office cost structure.)
Our diagnosis led to a reorganisation. Part of the portfolio was delegated to professional managers. The rest was sold. Choosing what to outsource and what to keep in-house was part of the same exercise.
5. Idle lifestyle assets
Some lifestyle assets made little economic sense against how little they were used. The principle is simple. Unless you fly constantly, renting a jet is usually a better use of capital than owning one. We applied the same test across the office's standing assets and acted where ownership no longer paid for itself.
The outcome
The office now runs at close to 0.4% of assets, in line with comparable structures. The family recovered roughly 0.5% on its assets each year, returned straight to performance rather than spent on overhead.
The number matters, but it is the result of the real work. We redesigned the operating model to match the family's needs, so the office could serve them efficiently again and stop working against the returns it was built to protect.
That is what we do. We are the family's voice at the table, and then we hand back an office the family can run.
* Industry benchmarks for operating cost at this scale sit around 0.35–0.44% of assets (UBS Global Family Office Report 2025) and roughly 0.37% (J.P. Morgan Global Family Office Report 2024).
Frequently asked questions
How much does it cost to run a single family office?
At larger scale, operating cost commonly sits around 0.35–0.44% of assets a year. Smaller offices run considerably higher as a share of assets, because fixed costs are spread over a smaller base. Cost is shaped far more by what the office does and the nature of its holdings than by the size of the portfolio.
How much can a family office reduce its running costs?
It depends on how far the cost base has drifted. In this case, a $1.5bn office moved from nearly 0.9% to around 0.4% of assets, recovering roughly 0.5% a year. The saving came from five areas at once rather than a single cut: staffing, adviser coordination, fees, the investment mix, and lifestyle assets.
Why do family office costs drift upward over time?
Cost accumulates through individually reasonable decisions: additional senior hires, uncoordinated access to external advisers, fees that are never renegotiated, and assets kept for reasons other than return. Reviewed together rather than one at a time, much of it can be removed without weakening the office.
Can cutting cost harm the family office?
It can, if the work is done with a spreadsheet rather than judgement. The aim is to match the office to the family's real needs, keeping what is used and removing what is not, so the office serves the family efficiently rather than simply more cheaply.