How Much Does a Family Office Actually Cost?
You don't need $50 million to think like a family office. You need the right framework. Here's the real cost breakdown — and the alternative most founders don't know exists.
The real numbers behind traditional family offices — and why founders don't need $50M to access the same strategies
(TL;DR) Traditional single family offices cost $1M-$2M per year to operate and require $50M-$100M in assets to justify the expense. Multi-family offices require $25M-$50M minimums and charge 0.5%-1.5% of assets annually. Most founders with $3M-$15M in liquidity don't meet these thresholds — but they don't need to. A Virtual Family Office using The VFO Value Stack™ framework provides the same strategic benefits for $25K-$75K annually, making family office strategies accessible at any wealth level.
Quick Answer: How much does a family office cost?
| Type | Annual Cost | Minimum Assets |
|---|---|---|
| Single family office | $1M-$2M | $50M-$100M |
| Multi-family office | 0.5%-1.5% of assets | $25M-$50M |
| Virtual family office | $25K-$75K | $1M-$5M |
Cost Summary:
- Single family office: $1M-$2M/year, requires $50M-$100M minimum
- Multi-family office: 0.5%-1.5% of assets annually, requires $25M-$50M minimum
- Virtual family office: $25K-$75K/year, accessible starting at $1M-$5M
What Is a Family Office?
A family office is a private wealth management organization that handles all financial affairs for a high-net-worth family. It goes far beyond investment management.
A full-service family office typically provides:
- Investment management and asset allocation
- Tax planning and compliance
- Estate and succession planning
- Legal coordination
- Risk management and insurance
- Bill pay and cash management
- Family governance and education
- Philanthropy coordination
- Lifestyle management (travel, property, staff)
Think of it as a personal CFO, legal team, investment committee, and chief of staff — all dedicated to one family's wealth.
The concept originated with wealthy families like the Rockefellers and Morgans in the 19th century. Today, there are an estimated 10,000+ family offices globally managing trillions in assets.
Key point: A family office is a comprehensive wealth management system, not just an investment account with a financial advisor.
How Much Does a Single Family Office Cost?
A single family office (SFO) serves one family exclusively. It's the gold standard — and the most expensive option.
Typical annual operating costs:
| Expense | Range |
|---|---|
| Staff salaries (CIO, CFO, admin) | $500K-$1.2M |
| Office space and overhead | $50K-$150K |
| Technology and systems | $50K-$100K |
| Legal and compliance | $100K-$300K |
| Accounting and tax | $75K-$200K |
| Insurance and risk management | $25K-$75K |
| Total | $800K-$2M+ |
Minimum asset threshold: $50M-$100M
Below $50M, the math doesn't work. If you're paying $1.5M annually to run a family office on $30M in assets, that's 5% of your wealth just for administration — before any investment fees.
The rule of thumb: family office costs should be 1-2% of total assets. At $100M, spending $1.5M (1.5%) is reasonable. At $25M, it's unsustainable.
What this means: Single family offices are only viable for families with $50M+ in investable assets. Most post-exit founders don't qualify.
How Much Does a Multi-Family Office Cost?
A multi-family office (MFO) serves multiple families, spreading costs across clients. This makes it more accessible — but still expensive.
Typical fee structures:
| Fee Type | Range |
|---|---|
| Assets under management (AUM) | 0.5%-1.5% annually |
| Flat retainer | $50K-$250K/year |
| Hourly consulting | $300-$600/hour |
| Performance fees | 10%-20% of gains (rare) |
Minimum asset threshold: $25M-$50M
Most MFOs won't take clients below $25M. Some boutique firms work with $10M+, but service levels drop significantly.
Example costs:
- $25M in assets at 1% AUM fee = $250K/year
- $50M in assets at 0.75% AUM fee = $375K/year
- $100M in assets at 0.5% AUM fee = $500K/year
These fees are on top of underlying investment fees (fund expenses, trading costs, etc.).
What this means: Multi-family offices reduce costs versus single family offices but still require significant wealth to access.
Why Are Family Offices So Expensive?
Three factors drive family office costs:
1. Human capital
The biggest expense is people. A competent family office needs:
- Chief Investment Officer ($300K-$600K)
- CFO or Controller ($150K-$300K)
- Tax specialists ($100K-$200K)
- Administrative staff ($50K-$100K)
- Outside counsel and advisors (variable)
One person can't do it all. Wealth management requires specialists in investments, tax, legal, and operations. That's 3-5 full-time employees minimum.
2. Infrastructure
Family offices need systems:
- Portfolio management software ($20K-$100K/year)
- Accounting and reporting platforms ($10K-$50K/year)
- Secure document management ($5K-$20K/year)
- Cybersecurity ($10K-$50K/year)
These tools exist to provide consolidated visibility across complex holdings. They're not optional.
3. Complexity premium
Wealthy families have complex needs:
- Multiple entity structures (trusts, LLCs, partnerships)
- Multi-jurisdictional holdings
- Alternative investments requiring specialized due diligence
- Family dynamics requiring governance structures
- Privacy and security concerns
Complexity requires expertise. Expertise costs money.
The insight: Family office costs reflect the genuine complexity of managing significant wealth. The question is whether you need all of it — or just the strategic framework.
What Do Founders Actually Need?
Here's what most founders with $3M-$15M in liquidity actually need after an exit:
Essential:
- Proper entity structure (holdco, trusts, LLCs)
- Tax-optimized investment strategy
- Consolidated financial reporting
- Basic asset protection
- Estate plan that reflects current wealth
- Clear investment policy
Nice to have:
- Dedicated investment manager
- Full-time CFO
- In-house legal counsel
- Family governance structure
- Philanthropy coordination
Probably don't need:
- 24/7 concierge services
- Private aviation coordination
- Art collection management
- Multiple full-time staff
Most founders are over-served by traditional wealth managers (who push products) and under-served by family offices (who won't take them as clients).
The gap in the middle is where The VFO Value Stack™ fits.
Key point: Founders need the strategic framework of a family office without the full infrastructure and overhead.
What Is a Virtual Family Office?
A Virtual Family Office (VFO) provides family office services without the dedicated staff and physical infrastructure.
Instead of hiring full-time employees, a VFO uses:
- Fractional executives (part-time CFO, investment advisor)
- Specialized consultants (tax, legal, estate planning)
- Technology platforms (portfolio tracking, reporting, document management)
- Outsourced operations (bill pay, admin, compliance)
The VFO coordinates these resources into a unified system — giving you the benefits of a family office without the $1M+ annual overhead.
This model works because:
- Technology has replaced much of what required full-time staff
- The gig economy created a pool of fractional experts
- Cloud-based platforms provide institutional-quality tools at accessible prices
- Founders don't need 24/7 service — they need strategic coordination
The VFO Value Stack™ is the framework for implementing this model systematically. It provides the same five levels that traditional family offices use:
- Legal Infrastructure
- Financial Oversight
- Risk + Privacy Architecture
- Opportunity Allocation
- Legacy & Governance
Each level can be implemented with fractional resources rather than full-time staff.
Key point: A Virtual Family Office delivers family office strategy at a fraction of traditional costs by using fractional experts and technology instead of full-time staff.
How Much Does a Virtual Family Office Cost?
A VFO using The VFO Value Stack™ framework typically costs $25K-$75K annually, depending on complexity.
Typical cost breakdown:
| Service | Annual Cost |
|---|---|
| Fractional CFO/financial oversight | $6K-$24K |
| Tax planning and preparation | $5K-$15K |
| Legal (entity maintenance, updates) | $3K-$10K |
| Estate planning | $5K-$15K |
| Investment advisory | $5K-$20K |
| Technology platforms | $2K-$5K |
| Insurance review | $1K-$3K |
| Total | $27K-$92K |
For most founders with $3M-$10M in assets, expect to spend $25K-$50K annually. For $10M-$25M, budget $50K-$75K.
Compare this to traditional options:
| Model | Annual Cost | Minimum Assets |
|---|---|---|
| Single family office | $1M-$2M | $50M-$100M |
| Multi-family office | $125K-$500K | $25M-$50M |
| Virtual family office | $25K-$75K | $3M-$5M |
| Traditional wealth manager | $15K-$50K | $1M+ |
The VFO costs more than a basic wealth manager but delivers far more value. It costs a fraction of traditional family offices while providing the same strategic framework.
What this means: For $25K-$75K annually, founders can implement family office strategies that were previously reserved for $50M+ families.
How Does VFO Cost Compare to Investment Fees?
Most founders focus on VFO costs but ignore investment fees — which are often larger.
Traditional wealth management fees:
- Assets under management: 0.5%-1.5% annually
- Fund expense ratios: 0.2%-2% annually
- Trading costs: 0.1%-0.5% annually
- Performance fees (hedge funds): 20% of gains
On $10M in assets with a 1% AUM fee, you're paying $100K/year — before fund expenses.
The hidden math:
- $10M at 1% AUM = $100K/year in fees
- Over 20 years at 7% growth, that's $1.5M+ in fees
- At 1.5% AUM, it's over $2.2M
A VFO approach using The VFO Value Stack™ often reduces total costs because:
- You're not paying AUM fees on passive index holdings
- You're coordinating specialists rather than paying bundled markups
- You have visibility into what you're actually paying
Key point: VFO costs should be evaluated against total wealth management costs, not in isolation. Many founders pay more in hidden fees than they would for a full VFO implementation.
When Should Founders Consider a Virtual Family Office?
Consider implementing a VFO when you have:
- $3M+ in liquid assets — Below this, simpler solutions work fine
- Multiple entity types — If you have a holdco, trusts, and various accounts, you need coordination
- Complex tax situation — Multiple income sources, stock options, carried interest, etc.
- Estate planning needs — Children, charitable goals, succession concerns
- Time constraints — You don't want to manage this yourself
- Control preferences — You want oversight without day-to-day involvement
You probably don't need a VFO yet if:
- You have less than $1M in investable assets
- Your financial life is simple (one account, W-2 income)
- You enjoy managing your own investments
- You have no estate planning complexity
The threshold: $3M-$5M in assets is where VFO implementation starts making sense. Below that, build the foundation. Above that, implement the full framework.
Key Takeaways
- Single family offices cost $1M-$2M annually and require $50M-$100M minimum
- Multi-family offices require $25M-$50M minimums and charge 0.5%-1.5% of assets
- Most founders with $3M-$15M are too small for traditional family offices but too complex for basic wealth management
- Virtual family offices using The VFO Value Stack™ cost $25K-$75K annually
- VFOs use fractional experts and technology instead of full-time staff
- The strategic framework is identical to traditional family offices — only the implementation model differs
- Total cost comparison should include hidden investment fees, not just advisory costs
- $3M-$5M in assets is the threshold where VFO implementation makes sense
Frequently Asked Questions
What is the minimum net worth for a family office?
Traditional single family offices require $50M-$100M minimum to justify costs. Multi-family offices typically require $25M-$50M. Virtual family offices using The VFO Value Stack™ are accessible starting at $3M-$5M.
How much does a family office charge?
Single family offices cost $1M-$2M annually in operating expenses. Multi-family offices charge 0.5%-1.5% of assets under management. Virtual family offices cost $25K-$75K annually depending on complexity.
Can I have a family office with $5 million?
Not a traditional single family office — the costs would consume too much of your wealth. However, you can implement family office strategies using a Virtual Family Office model for $25K-$50K annually.
What is a Virtual Family Office?
A Virtual Family Office provides family office services using fractional experts, specialized consultants, and technology platforms instead of full-time dedicated staff. It delivers the same strategic framework at a fraction of traditional costs.
What is The VFO Value Stack™?
The VFO Value Stack™ is a five-level framework for implementing family office strategies: Legal Infrastructure, Financial Oversight, Risk + Privacy Architecture, Opportunity Allocation, and Legacy & Governance. It was developed by Bill Heneghan to make family office strategies accessible to founders with $3M-$50M in liquidity.
Are family office fees tax deductible?
Investment management fees are generally no longer deductible for individuals after the 2017 tax law changes. However, fees paid through a properly structured entity (like a holdco) may have different treatment. Consult your tax advisor for your specific situation.
What's the difference between a family office and a wealth manager?
Wealth managers primarily focus on investment management and charge based on assets under management. Family offices provide comprehensive services including tax planning, legal coordination, estate planning, risk management, and family governance — treating wealth as a system rather than just an investment portfolio.
How do I know if I need a family office?
Consider family office services if you have $3M+ in assets, multiple entity structures, complex tax situations, estate planning needs, and prefer coordinated oversight rather than managing multiple advisors independently.
Related Resources
The VFO Value Stack™: How Founders Think Like a Family Office — The complete framework for implementing family office strategies at any wealth level.
Why Founders Should Build a Holding Company Before Exit — Level 1 of The VFO Value Stack™: Legal Infrastructure fundamentals.
The Wire Hit. Now What? A Founder's First 90 Days After Exit — What to do immediately after a liquidity event.
Go Deeper
The Family Office Playbook provides the complete guide to implementing The VFO Value Stack™ — from entity structure to legacy planning.
About the Author
Bill Heneghan is the founder of LegacyIQ and author of The Family Office Playbook. He developed The VFO Value Stack™ framework to help founders with $3M–$50M in liquidity build generational wealth using family office strategies. His work focuses on making family office strategies accessible to founders without requiring traditional $50M minimums.