Cost is always a major consideration when setting up a family office. These expenses are multifaceted ranging from employee salaries, IT, administrative costs, consultancy fees etc. A recent UBS report highlighted a significant rise in average operational expenses of family offices in 2022 with 59% of respondents reporting significant rises in the costs for staff and 48% reporting the same for IT. Knowing these funding factors and their impact on the overall performance of the family office will allow families to make better decisions on where to cut costs without unfavourable consequences.
Let us take a bird’s eye view of the general expenses that would be required to operate a family office in 2022.
The categories of family office expenses
The expenses to operate a family office can generally be classified into 4 broad categories: