The Westwick view
- Variable compensation should be tied to base salary, not to AUM. A CIO running a one-billion-dollar SFO should not earn ten times what a CIO running a one-hundred-million-dollar SFO earns for the same job. And families should hire on character before competence: skills can be taught, loyalty and judgement cannot.
- A family that budgets for its office and not for its investment layer has budgeted for the smaller half of the bill. Both halves belong on the same page, in money, once a year, and the surveys will never put them there for you.
- A purely passive investment allocation, while cheap on paper, is often a delegation in disguise. Families do not invest to track an index; they invest to grow and preserve capital across generations. Cost discipline on the investment side has to go beyond fee compression and ask whether each external mandate still reflects a real conviction.
- Cost discipline is more than a management exercise. It is a fiduciary duty. The people running a family office are temporary stewards of wealth they did not build, accountable to the generations that built it and to those who will inherit it.
Running a single family office is expensive. How expensive depends on the size of the assets, the scope of the mandate, and above all on the discipline with which the office is built and managed. Most families set up an SFO for control and privacy. The cost conversation tends to arrive later, often too late.
It also depends on where you stop counting. The figures families are usually shown, the basis-point benchmarks published every year by the private banks, measure the cost of running the office: people, advisers, systems, premises. They stop there. What the family pays to have its money invested, to managers, inside funds, to custodians and in carried interest, sits outside the perimeter, and in most offices nobody has ever put the two figures side by side. When we do, for a portfolio of ordinary complexity, the second figure is larger than the first.
This guide sets out both. First what the surveys report, and what drives the running cost. Then the cost of investing, which the surveys leave out, and what the bill looks like once it is counted. Then who writes the benchmarks, and what a well-built cost structure looks like in practice. One caveat before the figures. Family offices define their scope very differently, so cross-industry comparisons are imperfect. Some include lifestyle assets, others exclude them. Some internalise functions that others outsource and do not count at all. The numbers below describe central tendencies; individual situations vary substantially.
What the surveys report: the cost of running the office
The short answer: more than most families expect, and less than many SFOs actually spend.
Start by discarding the idea of an entry ticket. A family office has no fixed form, so it has no minimum size: a principal running a small investment structure with one trusted employee has a family office, in every sense that matters. The thresholds practitioners cite, between $250 million and $500 million in investable assets, describe something narrower: the point at which a fully staffed, full-service office earns its keep. Campden Wealth's 2025 report puts that breakeven closer to $500 million. Below the line, the fixed cost of a large team erodes returns faster than the control it buys, so families keep the office deliberately lean, delegate more, or buy the service in. The mistake is not being below the threshold; it is staffing as if you were above it.
Industry benchmarks express the running cost as a proportion of assets, measured in basis points. The picture across annual surveys is broadly consistent.
| SFO size (investable AUM) | Running cost (bps of AUM) | Typical annual budget |
|---|---|---|
| Small (under $250M) | 50–60 bps | $1.0M – $1.5M |
| Midsize ($250M – $1B) | ~40–42 bps | $2.0M – $3.0M |
| Large (above $1B) | 20–35 bps | ~$6.6M average |
Sources: Campden Wealth 2025, UBS 2025, J.P. Morgan 2026. Running cost of the office only: excludes what the family pays its managers, funds and custodians.
Small family office (under $250M)
Running costs sit at 50 to 60 basis points of AUM, with budgets of $1.0 million to $1.5 million per year (Campden Wealth, 2025). At these levels the fully staffed SFO is economically difficult: the fixed cost base is high relative to the assets, and the office cannot benefit from the scale that makes larger structures efficient. Families at this size do not hire a chief executive or a chief investment officer; the principal stays close to the investment decisions and a few generalists handle accounting and monitoring, with advice bought in.
Midsize family office ($250M – $1B)
Average pure operating costs sit at around 40 basis points (Campden Wealth, UBS, 2025), with annual budgets typically between $2 million and $3 million. This is the band in which the SFO model starts to make structural sense, provided the mandate is well-defined and the office is run efficiently.
Large family office (above $1B)
Economies of scale become apparent: average costs fall to between 20 and 35 basis points, depending on methodology, with an average annual operating budget of around $6.6 million (J.P. Morgan, 2026). One nuance: UBS finds that offices also managing an operating company run materially higher, at around 45 basis points on average.
Two further nuances rarely show up in headline benchmarks. Costs rise across generations (UBS finds first-generation offices at around 37 bps, later generations at 44 bps), and the range within each size band is wide. Two offices managing $800 million might spend $2 million or $6 million a year. The gap is rarely explained by portfolio size, almost always by decisions about structure, staffing and scope. Operating costs also rose by nearly 5% in 2024, ahead of inflation (Campden Wealth, 2025). Without active management of the cost base, drift is the default.
Where the office sits counts too. The same €500m office costs about €2.4m a year to run in Brussels and €4.5m in Geneva, almost entirely because of salaries, as we show in what a family office costs in Paris, Brussels, Luxembourg and Geneva.
These benchmarks describe central tendencies. To see what they give for a specific allocation, headcount and service perimeter, our family office cost calculator runs the model we use in practice, built from offices our partners have run rather than from surveys. You can read how the calculator works before you use it.
Where the running cost goes
The composition of costs matters more than the level, because it is in the breakdown that the levers for improvement become visible.
Staffing
Staffing is the dominant cost in virtually every SFO. UBS finds that staff costs account for two-thirds of pure operating expenses globally. Campden Wealth's breakdown by size is instructive: in large offices, C-level executive compensation represents around 39% of total operating costs; in midsize offices, 54%; in small offices, C-level compensation alone can absorb 72% of the operating budget. The concentration at the top is what makes the leadership layer the area where cost decisions matter most. Morgan Stanley's 2025 survey adds that 95% of investment-focused family offices keep total compensation costs below 1.9% of AUM, and 55% below 0.5%.
Legal, tax and compliance
Legal, tax and compliance costs are substantial and frequently underestimated. UBS finds that legal and compliance costs represent around 10% of pure operating expenses, with physical infrastructure a further 8%. As complexity grows across jurisdictions, structures and family generations, so does the demand for external counsel; without centralised oversight, those costs drift upward unchecked. Office-related functions account for the largest share of outsourced expenses, between 24% and 36% (Campden Wealth, 2025).
Technology
Technology has become a meaningful and fast-growing line item. Consolidated reporting, portfolio management systems, cybersecurity and AI-driven analytics all carry recurring costs. Campden Wealth identifies technology as one of the two main drivers of cost inflation in 2024, alongside staffing. Smaller offices over-rely on generic tools and under-invest in fit-for-purpose systems; larger offices pay for redundant platforms procured in response to a specific problem and never rationalised. Both errors are common, and neither is cheap over time.
Administration and overhead
Administration and overhead — office space, back-office operations, compliance — benefit significantly from scale. Large offices spend proportionally far less on overhead (around 27% of total costs) than smaller ones (40 to 44%). For small and midsize offices, outsourcing administrative functions is often more efficient than replicating them in-house, though the outsourced model still requires careful provider selection and ongoing oversight.
In-house investment management
Internal management consumes analyst and CIO time captured in salaries, and it is the one investment cost the surveys do capture, because it sits in the payroll. Most family offices run roughly 70% in-house and 30% outsourced by decision-making authority (Goldman Sachs, 2025). J.P. Morgan puts external expenses at 25 to 28% of total operating costs. Read the perimeter, though: "external" here means the lawyers, auditors, administrators and consultants whose invoices pass through the office's budget. What the family pays its managers and funds is a different line, and it is the subject of the next section.
The cost of investing: the half the surveys leave out
The basis-point figures above refer to what UBS calls "pure cost", meaning the direct operational expenses of the office. UBS's own report notes that pure cost accounts for only 57% of total family office expenditure once asset management fees and banking charges are included. On the surveys' own figures, then, the full cost of an SFO is nearly twice the headline benchmark, and that is before most of the fees charged inside funds and before the carried interest, which no survey counts. Citibank estimates external investment management fees alone average 1% to 2% of AUM for families using third-party managers.
Estimates built on the surveys, adding the external fees they capture, put the all-in cost of a traditional SFO at around 0.5%–0.75% of assets a year: about $3 million for a family with $500 million. We used that range ourselves for some time. It is a survey-based estimate, and it should always be presented as one, because it still leaves out most of what is charged inside funds, and all of the carry.
So we priced it in full. The model behind our calculator is drawn from the offices our partners have built and run: what they pay their people, what they pay their providers, and what each pocket of the portfolio costs to hold, management fees, fund-level costs, custody, trading, the cost of selecting and monitoring managers, and carried interest spread over the life of the funds. Take a $500 million single family office based in the United Kingdom, serving four family members: half the portfolio in listed equities and bonds, close to a third in private equity, venture and real asset funds, a tenth in three direct holdings (one of them controlled), a few per cent in metals and collectibles, the rest in cash. Investment oversight and accounting kept in-house; execution split between the office and its banks; tax, legal and IT bought in.
| A $500m single family office, portfolio of ordinary complexity | A year | Basis points |
|---|---|---|
| Running the office (leadership, in-house teams, advisers, IT and premises) | $3.3m (range $2.6m–$4.1m) | 66 |
| Investing the money (management fees, fund-level costs, custody, trading, monitoring) | $4.6m | 92 |
| Carried interest, spread over the life of the funds | $1.7m | 34 |
| Total | $9.6m | 192 |
Source: Westwick family office cost calculator, model version 1.6.0 (October 2026). Running cost from the public estimate, investment costs from the full analysis.
The office costs 66 basis points to run, above the surveys' average for its size because direct holdings, one of them controlled, cost more to run than the average office the surveys describe. The investment layer costs $6.3 million, close to twice as much, and even with the carried interest taken out it still costs more than the office. In a median year on that allocation, with a gross return in the region of 8.5%, the two layers together take more than a fifth of the gain.
Change the portfolio and the picture changes. On a fully listed portfolio of the same size (60% equities, 30% bonds, the rest in cash), the calculator puts the office at about $1.6 million a year and the investment layer at about $2 million: roughly $3.6 million in all, about 70 basis points, with the two halves close to parity. Complexity, not size, is what tips the balance. That is why we now give two figures where we used to give one: priced in full, a fully listed portfolio costs the family in the region of 0.7% a year, and a portfolio of ordinary complexity, with close to a third in private-market funds and some direct holdings, nearer 1.5%–2%. In the second case the office itself is the smaller half of the bill, and the half that gets all the scrutiny.
Add lifestyle assets (aircraft, yachts, family properties), classified as personal rather than operational and counted by nobody, and the true all-in cost is higher still. Full-cost benchmarking is an exercise most family offices have never done. The calculator's full analysis does it pocket by pocket on your own allocation; our guide to family office fees explains the five ways an external firm gets paid, and why so much of this money is never invoiced.
Who writes the benchmarks, and what that means
Before holding an office against any of the survey figures above, it is worth asking where they come from. Most of the surveys quoted in this guide — UBS, J.P. Morgan, Citi, Goldman Sachs, Morgan Stanley — are published by private banks, and their respondents are drawn from the banks' own client bases: UBS's 2026 edition states that it reflects the opinions of 307 of the bank's clients; J.P. Morgan's covers 333 offices, labelled "clients" throughout its exhibits. Even the independent research houses rarely publish alone: Campden Wealth's 2025 report, built on 146 offices, is produced with AlTi Tiedemann Global, a wealth manager. Each report, then, rests on a few hundred family offices about which the reader is told almost nothing — which families, what perimeter, run by whom. The figures are self-reported, unaudited and self-selected, because the office that takes the time to complete a sixty-question survey is not the average office. Which offices decline to answer, no report can say.
The more structural limit is the perimeter. These surveys measure the cost of running the office and stop there. Management fees, performance fees and fund-level costs — the layer that, on the example above, is the larger part of the bill — sit outside the definition. Those excluded fees are, in large part, what the publishing institutions charge their clients. We make no claim about intent; we simply note that the perimeter ends where the publisher's invoice begins, and that a family relying on these figures will budget for half the true cost, and often less.
None of this makes the benchmarks useless. They are the best public data available, and we quote them throughout this guide. It makes them a starting point rather than a verdict — numbers to be read the way a family reads any document produced by a counterparty. The corrective is to run the figure on your own perimeter.
What an intelligently built cost structure looks like
The benchmarks describe what family offices spend, not what they should spend. The gap is usually wide, and almost always the product of decisions made in the early years that were never revisited.
At Westwick, the patterns we see are remarkably consistent. The issues are rarely exotic. They are the result of accumulation: costs that were individually reasonable at inception but never challenged as a whole. A lean office is not the same thing as an intentional one. Intentional means every significant expenditure is a deliberate decision, regularly tested against the alternatives. Five structural issues come up most often.
Staffing bloat at the top
The problem we encounter most often is not understaffing. It is the gradual accumulation of senior profiles with overlapping mandates. SFOs that begin lean tend to add seniority without a corresponding increase in the scope or complexity of the work. Each hire was individually justified at the time. Collectively, they produce a leadership layer that is expensive, internally political, and slower to act than a smaller team would be. When we audit an organisation of this kind, our first step is to map roles against real responsibilities: not titles, not history, but what each person actually decides and delivers. The restructuring that follows usually reduces cost and improves execution at the same time.
Compensation alignment matters too. Remuneration tied to AUM rather than to performance is a structural incentive for expansion without accountability. Our conviction at Westwick is that variable compensation should be expressed as a percentage of base salary, not of assets under management. A CIO running a one-billion-dollar SFO should not earn ten times what a CIO running a one-hundred-million-dollar SFO earns for the same job. The capital, the risk, and the ultimate allocation decision come from the family, not from the operator.
On recruitment, we encourage the families we work with to hire on character before competence. Skills can be taught. Loyalty, ownership and judgement cannot. In a family office, where mandates are long and the work demands discretion, the cost of getting character wrong is far higher than the cost of training someone whose skills are still maturing.
Uncoordinated access to external advisers
Legal, tax and banking relationships proliferate in SFOs where no single point oversees external spend. Family members, business lines or administrative staff engage counsel directly, with no visibility into what the office is already paying or what rates have been negotiated elsewhere. Over five or ten years, the advisory budget grows by stealth, serviced by a roster of providers who have never been benchmarked against one another or the market. The answer is rarely to dismiss providers who have served the family well. It is to centralise oversight, set clear protocols for engagement, and build in regular reviews. Beyond cost, centralisation is a question of alignment. External advisers have their own commercial agendas, and without a single owner of the relationship it becomes difficult to ensure the advice the family receives is shaped by the family's interests rather than the provider's pipeline.
Fees that were never renegotiated
Banking, custody and investment management fees are usually set at inception and rarely revisited. The initial negotiation happens when the office is new and leverage is limited. As assets grow and the aggregate relationship with any given institution increases, the basis for a better arrangement strengthens. The conversation, however, rarely happens unless someone initiates it. A family office managing $500 million that trims its external management cost by 20 basis points retains an additional $1 million a year. Reinvested over two decades, the compounded value is significant.
Renegotiating does not mean compressing fees as a matter of principle. The opposite is often the right call. When a family is selling a billion-dollar asset or executing a complex international deal, hiring top-tier banks and law firms usually pays for itself. Their fees are higher, but they buy credibility with counterparts, deter opportunistic bidders, and save weeks of friction. Discipline means knowing where it is worth paying for the best, and where the family is paying premium fees out of inertia.
Portfolios that have never been rationalised
We often see SFOs holding legacy positions, typically small residential real estate assets managed directly, that consume disproportionate internal time and cost relative to their contribution. These are seldom the product of a deliberate direct-property strategy. They are the residue of historical acquisitions, often made for personal reasons, never reconsidered as the portfolio evolved. When properly modelled (all direct costs, internal time, performance against a specialist-managed equivalent), the economics rarely support continued direct ownership at small scale. The fix is usually delegation, partial disposal, or a full exit. All three tend to improve the economics and the coherence of the portfolio at the same time.
The same test applies to the external mandates. A purely passive allocation, while cheap on paper, is often a delegation in disguise: it removes conviction from the portfolio and reduces the family office to a low-cost custodian of market exposure. Cost discipline on the investment side cannot stop at fee compression. The harder question is whether each externalised mandate reflects a real conviction, or whether it has been retained out of habit.
Lifestyle assets held as if they were investments
Private aircraft, yachts, second homes and similar assets are legitimate expressions of family wealth, and we are not in the business of telling families how to live. But they carry operating costs that are frequently invisible in the family office budget because they are categorised as personal rather than operational:
"It is striking that families rarely question the expenses of private planes and pilots yet frequently scrutinize family office budgets. Over time, underinvestment in professional support can lead to substantial financial shortfalls, and when compounded across generations, the effects can be monumental."
— IMD Global Family Office Report 2025
The opposite case is just as common. Overinvestment in rarely used lifestyle assets compounds in the other direction, quietly and outside any governance oversight. A private aircraft flying 150 to 200 hours per year costs several multiples of equivalent access through charter or fractional ownership, yet the total cost of ownership is rarely laid out in one place. The decision to hold such assets is ultimately personal, and not everything should be reduced to a return calculation. It should, however, be made with a clear understanding of what it actually costs.
The discipline that makes the difference
Good intentions do not run a cost base. Structure does. A well-run family office builds cost review into its governance calendar in the same way it builds investment review. At least annually, the full cost base should be examined, both halves of it: operating spend against budget, staff costs against market benchmarks, adviser costs against scope and alternatives, and what every external manager, fund and custodian was paid, in money, against the market. The process should be owned by the principal or CEO, not delegated to the people whose compensation it might affect.
The families that manage this well treat the family office as a business to be run, not a service to be consumed. They ask, every year, whether the structure they have is the structure they would build from scratch today, and they are willing to act on the answer.
Scale is rarely what separates a well-run SFO from an expensive one. Discipline is. And cost discipline in a family office is more than a management exercise. It is a fiduciary duty. The people running the structure are not its owners. They are its temporary stewards, accountable to the generations that built the wealth and to those that will inherit it.
How Westwick helps
Start with the figure. Our family office cost calculator gives the running cost of a specific office from its allocation, headcount and service scope, and the full analysis behind it prices the investment layer the surveys leave out, pocket by pocket. It is built from the offices our partners have run, and it is free.
Where the figure it returns sits a long way from what the office actually spends, the question is why. Our family office audit answers it from outside the office: structure, staffing, cost, allocation and governance, read by people with nothing to sell the family at the end of it. In one such review we brought a $1.5bn office's running cost from close to 0.9% to around 0.4% of assets without removing a service the family relied on.
Sources
- Campden Wealth / AlTi Tiedemann Global, The Family Office Operational Excellence Report 2025
- J.P. Morgan, Global Family Office Report 2026
- UBS, Global Family Office Report 2025
- UBS, Global Family Office Report 2026
- Citibank Private Bank, Global Family Office Report 2025
- Morgan Stanley / Botoff Consulting, Compensation Practices of Investment-Focused Family Offices 2025
- IMD Global Family Business Center, The Global Family Office Report 2025
- Goldman Sachs Wealth Management, Family Office Investment Insights: Adapting to the Terrain, 2025
- Westwick Partners, Family office cost calculator, model version 1.6.0, October 2026 (methodology)
Frequently asked questions
How much does a single family office cost to run?
The industry surveys put the running cost at roughly 50–60 basis points of assets for small offices (under $250 million), around 40 for midsize offices and 20–35 above $1 billion, with staff accounting for about two-thirds. For a $500 million office of ordinary complexity, our own model gives about $3.3 million a year, or 66 basis points. That is the cost of the office only; what the family pays to invest comes on top.
What is the all-in cost of a family office?
It depends on what is counted. Estimates built on the bank surveys, adding the external fees they capture, give about 0.5%–0.75% of assets a year. Priced in full, with the fees charged inside funds and the carried interest, our model puts a $500 million office with a fully listed portfolio at about 0.7% and the same office with close to a third in private-market funds and a few direct holdings at close to 2%. The investment layer, not the office, is what moves the figure.
How much does it cost to invest a family office's portfolio?
For a $500 million office with half the portfolio listed, close to a third in private equity, venture and real asset funds and a tenth in direct holdings, our calculator puts management fees, fund-level costs, custody, trading and monitoring at about $4.6 million a year, plus about $1.7 million of carried interest spread over the life of the funds: $6.3 million, or 126 basis points. On a fully listed portfolio of the same size, about $2 million.
Is there a minimum AUM to justify a single family office?
No. A family office has no fixed form, so it has no minimum size: a principal with one trusted employee has a family office. The thresholds practitioners cite, $250–500 million in investable assets, describe the point at which a fully staffed, full-service office earns its keep, with Campden Wealth's 2025 research putting that breakeven near the top of the range. Below it, families keep the office lean and buy more in. The mistake is not being below the line; it is staffing as if you were above it.
What is the main cost driver in a single family office?
Within the running cost, staffing. In small and midsize offices, C-level compensation alone can represent between 50% and 70% of operating costs; in larger offices the team is broader and the proportion falls, but the absolute number rises. Across the whole bill, the driver is the complexity of the portfolio: private-market funds, direct holdings and carried interest are what take a family from under 1% a year to close to 2%.
How reliable are family office cost benchmarks?
They are the best public data available, and they should be read as a starting point. Most are published by private banks surveying their own clients: samples are self-selected, figures are self-reported and unaudited, and each report defines 'family office' and 'operating cost' differently. Above all, they stop at the running cost. The management fees, fund-level costs and carried interest they leave out are, for a portfolio of ordinary complexity, the larger part of the bill, and they are largely charged by the institutions publishing the surveys. The corrective is to compute the figure on your own perimeter.
What are the most common fee structures for a family office?
A single family office does not charge a fee; it bears a running cost of roughly 40–60 basis points of assets, about two-thirds of it staff. Separately, the family pays its managers, funds and custodians: a percentage of assets, fund-level fees, custody and trading charges and, on private-market funds, carried interest. Citibank puts external investment-management fees alone at 1% to 2% of assets for families using third-party managers. Our guide to family office fees sets out the five ways an external firm gets paid.