Ultra-wealthy families are quietly spending more to run their own investment operations.
CNBC reports that family offices with $ 1B+ in assets now average $ 6.6 million a year in operating costs, up from $ 6.1 million in 2024. That is a meaningful jump, and it does not look temporary.
J.P. Morgan Private Bank says much of the increase is coming from compensation. Family offices are paying up for the same people private equity and hedge funds want: portfolio managers, deal teams, and risk specialists.
At the same time, outsourcing is becoming standard. Around 80% of family offices now hand off at least part of the portfolio to external managers or specialists. And interestingly, only 28% say they are doing it mainly to cut costs. The bigger drivers are access: private markets, proven track records, and niche expertise.
Advisors also describe a familiar tension inside families. The principals often shrug at higher overhead because the benefits feel real: control, privacy, and the ability to move quickly. Their heirs inherit a different picture. They see the same control, but they also see the invoices, the headcount, and the creeping complexity. Some start asking whether the setup should be simplified, merged with another structure, or even wound down after a generational handover.
So the signal is pretty clear. Running your own shop keeps getting more expensive. And the next generation tends to be less sentimental about it. They want benchmarks, transparency, and a clean explanation for why the cost base makes sense. Which pushes the real question forward.
It is no longer "who is the best advisor?"
It is: what governance and operating model actually earns a $ 6−7 million annual overhead?
If you rebuilt the structure from scratch today, would your current family office survive the first round of scrutiny?
CNBC reports that family offices with $ 1B+ in assets now average $ 6.6 million a year in operating costs, up from $ 6.1 million in 2024. That is a meaningful jump, and it does not look temporary.
J.P. Morgan Private Bank says much of the increase is coming from compensation. Family offices are paying up for the same people private equity and hedge funds want: portfolio managers, deal teams, and risk specialists.
At the same time, outsourcing is becoming standard. Around 80% of family offices now hand off at least part of the portfolio to external managers or specialists. And interestingly, only 28% say they are doing it mainly to cut costs. The bigger drivers are access: private markets, proven track records, and niche expertise.
Advisors also describe a familiar tension inside families. The principals often shrug at higher overhead because the benefits feel real: control, privacy, and the ability to move quickly. Their heirs inherit a different picture. They see the same control, but they also see the invoices, the headcount, and the creeping complexity. Some start asking whether the setup should be simplified, merged with another structure, or even wound down after a generational handover.
So the signal is pretty clear. Running your own shop keeps getting more expensive. And the next generation tends to be less sentimental about it. They want benchmarks, transparency, and a clean explanation for why the cost base makes sense. Which pushes the real question forward.
It is no longer "who is the best advisor?"
It is: what governance and operating model actually earns a $ 6−7 million annual overhead?
If you rebuilt the structure from scratch today, would your current family office survive the first round of scrutiny?