Operating Cost Benchmarks (2024)
Hard data on what it costs to run a single family office, from executive compensation to software licensing.
The 1% Rule of Thumb is Dead
Historically, families were told an SFO should cost roughly 1% of AUM. Today, driven by technological efficiencies and outsourced capabilities, a $500M family office typically runs between 60 to 80 basis points (0.6% - 0.8%), or $3M to $4M annually. However, complexity—not just AUM—drives costs. A highly illiquid direct real estate portfolio requires more headcount than a passive index portfolio.
| Expense Category | Est. Annual Cost ($500M AUM) | % of Total Budget |
|---|---|---|
| Investment Team (CIO + Analyst) | $800k - $1.5M | 35-45% |
| Accounting / Tax (CFO + Controller) | $400k - $700k | 20-25% |
| Technology (Addepar, GL, Security) | $150k - $300k | 10-15% |
| Legal & External Auditing | $100k - $250k | 5-10% |
Common Mistakes
Under-budgeting for technology integration. Licensing Addepar might cost $100k, but paying a consultant to implement historical data and build custom K-1 ingestion workflows can cost another $150k in Year 1.
FAQ
A: No. MFOs operate as profit centers and scale costs across clients. An SFO is a cost center tailored specifically to one family's idiosyncratic needs.
Use our Setup Cost Estimator to model your specific AUM.
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