The cost of staffing the family office

Staffing a family office is a significant — and growing — expense. From UBS’s Global Family Office Report 2023, here are five takeaways about the cost of family office staffing:

1) Staff costs are family offices’ most significant operational expense. The pure cost of running the family office (as opposed to asset management and banking-related costs) accounts for 61% of the overall cost. Staff costs are by far the largest part of this pure cost: almost 70%. And 60% of survey respondents expect spending on staff to increase over the next three years.

2) In-house functions start with the financial core of the family office. The most likely family office functions done in-house are strategic asset allocation (85%), portfolio risk management (77%) and financial accounting and reporting (73%). A majority of family offices also have bookkeeping and accounting functions (72%), portfolio administration (62%), philanthropy (60%) and succession planning (51%) done in-house.

3) Family offices outsource strategically. The functions most likely to be outsourced are legal services (64%), tax planning (58%), and cyber security (53%).

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4) Base salary is just the beginning. Bonuses are the most common form of compensation above a base salary: 60% offer family office employees a discretionary bonus and 47% offer a performance-linked bonus. Co-investment opportunities are the next most common form of additional compensation, offered by 23% of respondents.

5) Family offices in the United States are particularly likely to look beyond base salary. In the U.S., 76 % of family office offer discretionary bonuses, and 69% performance-linked bonuses. And 48% of U.S. family offices offer co-investment opportunities.

About the Author

Margaret Steen

Margaret Steen is the editor of FO Pro, The Family Office Professional. Based in Silicon Valley, she has written for Family Business Magazine for more than 15 years.


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