Family office insights this week:
The true cost of running a family office
Where the next-gen get their financial info
The danger of cutting family members off
A sharp takedown of the mutual fund industry
Family office jobs in New York, Las Vegas and LA
Family values with Matthew McConaughey
The Brutal Cost of Running a Family Office
With such high costs, why do so many families still opt for a Single Family Office model?
The advantages of family offices are clear: Privacy. Customization. Control.
But these can come at a price. Salaries, tech, legal bills.
The dream of running your own shop often collides with the brutal economics of keeping it alive.
When many families realize their family office is actually eroding generational wealth, they often (quietly) shut them down or scale them back.
This week, we break down the real cost of running a family office, featuring the latest data from Goldman Sachs and Citi Private Bank.
A rule of thumb
“Family office expenses often approximate 1% to 2% of the assets under management.”
This 1-2% number from the recent Citi 2025 Global Family Office Report is an all-in amount including external managers and advisors. Pure operating costs typically run 0.5%–1.5% of assets annually,
That means:
$200M = $1M–$3M/year just to run
$500M = $2.5M–$7.5M/year
$1B = $5M–$15M/year
Even the wealthiest families have to ask if the control is worth that bill.
The numbers in black and white
Here’s what Citi found when they asked families to reveal their cost base:
Operating Costs (Citi 2025)
Cost as % of AUM | % of Family Offices |
|---|---|
<50 bps | 36% |
50–100 bps | 36% |
100–200 bps | 20% |
>200 bps | 7% |
Translation: about two-thirds of family offices are spending at least 0.5% a year. And one in four are pushing above 1%.
You might expect economies of scale, but Citi points out that larger offices experience scope creep as they expand their remit into philanthropy, next-gen education, and governance.
The scope of a family office is a key cost driver. Every new service (like a foundation, concierge, or complex reporting system) has a multiplier effect: extra legal work, new tech tools, ongoing monitoring. Without discipline, service creep can send costs spiraling.
Who’s on payroll?
The biggest line item is almost always people.
Staffing can eat 50–60% of the budget.
And yet, most family offices are small. Goldman Sachs and Citi agree that the average family office employs under 10 people.
Typical Staffing Levels (Goldman Sachs & Citi 2025)
Employees | % of Offices (GS) | % of Offices (Citi) |
|---|---|---|
1–3 | 52% | 39% |
4–6 | 28% | 24% |
7–9 | 5% | 13% |
>10 | 7% | 24% |
So while the headlines feature sprawling offices with CIOs, CFOs, and in-house tax teams, the median office is lean: a handful of generalists, often supported by outsourced specialists.
But at the top end, staff lists can look like hedge funds:
CIO & investment team
CFO/COO
In-house tax/legal
Accountants & controllers
Executive assistants
Next-gen education
Philanthropy lead
Governance & HR
Put that in London, New York, or Zurich, and salaries and bonuses alone can exceed $2M a year.
Complexity
Complex portfolios add costs. Private equity, co-investments, and niche alternatives require more due diligence, more legal structuring, and pricier systems.
Basic ETFs can be tracked on Excel, but once you’re in direct deals, you usually need software to keep on top of it.
And there’s complexity around families too.
More members = more complexity: multiple ownership stakes, different reporting preferences, even conflict resolution and education programs. All of this adds to the budget.
Continue reading the full article for further considerations, including location, hidden risks and the one ratio that matters most…
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𝕏 highlights
Where young people get their financial information.
The danger of cutting family members off.
Where to work
Three family office industry job opportunities posted this week…
What to read
Unconventional Success by David Swensen (the late Yale endowment chief) is a sharp takedown of the mutual fund industry and its hidden costs. He argues that average investors (and by extension wealthy families) should avoid most active managers and stick to a disciplined mix of low-cost index funds.
What to listen to
In this episode of China Decode, hosts Alice Han and James Kynge discuss the economic and political implications of Nvidia’s complicated relationship with China. Plus the US-China Tik-Tok deal and the surprising trend of Chinese nostalgia for a simpler time.
What to watch
There is a lot of good academic writing about family values and parenting… but this interview with Matthew McConaughey is a true masterclass.
And finally…
We’ve got some stellar things in the pipeline, including the Family Office Guide to Dubai, a profile of an Indian SFO, How to Open a Family Office and some fun topics we can’t say too much about yet.
Family Office Buzz on Monday was popular as ever with particular interest in $10M- $100M-$1B lifestyles as well as a look inside a $14B MFO.
Let’s finish with a quote:
“Some family trees bear an enormous crop of nuts.”
- Wayne Huizenga
Right, that’s enough for this week!
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