Family Office Cost Calculator

The $100 Million Question: Should You Build a Family Office or Rent One?

For the ultra-wealthy, there comes a specific tipping point—usually whispered about in private clubs or boardroom meetings—where having a “wealth manager” is no longer enough. The financial life of the family has become a business in itself.

This is the moment the Family Office conversation begins.

But here is the reality check that few advisors will tell you upfront: Building a Single Family Office (SFO) is essentially launching a startup. It requires a CEO, a CTO, HR, payroll, cybersecurity, and lease agreements. It is expensive, time-consuming, and operationally heavy.

Conversely, the Multi-Family Office (MFO) allows you to “rent” this infrastructure, but often at a steep percentage of your assets.

So, which is cheaper? And more importantly, which is smarter?

The “Build vs. Rent” Dilemma

The decision almost always comes down to a Breakeven Analysis.

1. The Single Family Office (SFO)

• The Model: You hire your own dedicated staff. You pay their salaries, benefits, and the rent.
• The Cost Structure: High Fixed Costs. Whether your portfolio is up 20% or down 20%, you still have to pay your Chief Investment Officer’s salary.
• The Breakpoint: Because the costs are fixed (e.g., $1.5M/year overhead), the percentage cost drops as your assets rise. An SFO that costs 2% of assets at $50M only costs 0.5% of assets at $300M.

2. The Multi-Family Office (MFO)

• The Model: You join a platform serving other wealthy families. They handle the investments, tax, and bill pay.
• The Cost Structure: Variable Costs. You usually pay a percentage of Assets Under Management (AUM).
• The Breakpoint: MFOs are generally cheaper for those with $20M to $100M. However, as your wealth grows, that percentage fee can become a massive absolute number, eventually exceeding the cost of running your own shop.

How to Use The Calculator

We built the Family Office Cost Calculator above to help you run these numbers instantly.

Step 1: Input Your “Investable” AUM Do not include your primary residence or your collection of vintage cars. We are looking for liquid assets that require active management.

Step 2: Build Your Virtual Team This is where the costs add up. In the “Internal Staff” tab, toggle the roles you think you need.

• Do you need a CIO? If you want to do direct private equity deals, yes. That’s expensive ($350k – $800k+).
• Just need bill pay? Maybe you only need a Controller/Admin.

Step 3: Analyze the “Efficiency Gauge” Look at the final result chart labeled “Cost as % of AUM.” In the institutional world, we aim for total costs to be under 100 basis points (1.00%). If your calculated SFO cost is 2.50% of your assets, you are likely burning capital inefficiently and should stick to an MFO.

The Verdict

There is an old adage in wealth management: “If you’ve seen one Family Office… you’ve seen one Family Office.” Every situation is unique. However, the math provides a guide:

• < $50 Million: Almost certainly “Rent” (MFO). The overhead of an SFO is too heavy.
• $50M – $200M: The “Gray Zone.” A Hybrid model often works best here (Outsourced CIO + Internal Chief of Staff).
• > $200 Million: “Build” (SFO) becomes attractive. You gain total control, privacy, and customization for a cost that is likely lower than an MFO’s fee.

Use the calculator to find your own personal tipping point.