If you’ve sold your startup and are navigating wealth management decisions, here’s the bottom line:
- Traditional Wealth Managers: Best for portfolios under $50M with simple needs. Expect costs of 1.15%–1.75% of assets ($400K–$600K annually for $40M). Services focus on investments but lack support for complex needs like real estate or trusts.
- Multi-Family Offices: Fit for $50M–$150M portfolios or complex setups. Costs range from 1.5%–3% of assets ($600K–$1.2M annually for $40M). Offers broader services like tax prep, estate planning, and exclusive investments.
- Single-Family Offices: Ideal for $150M+ portfolios or those seeking full control. Costs run $2M–$5M annually, with extensive customization and privacy. Feasible below $150M only with steady income streams.
Quick Tip: Match your choice to your portfolio size, complexity, and income stability. For leaner setups, stick with wealth managers or multi-family offices. For larger, intricate portfolios, a single-family office may be worth the cost.
Wealth Management Options Comparison: Costs and Services by Portfolio Size
Traditional Private Wealth Management: Basic Services at Lower Cost
Annual Costs and Fee Breakdown
If you have $40 million in liquid assets, traditional wealth managers typically charge between $400,000 and $600,000 annually. This represents a fee of 1%–1.5% of assets under management (AUM). On top of that, you’ll encounter additional expenses, including custody, transaction, and fund-related fees, which can add another 0%–0.5%. Altogether, the total cost usually falls between 1.15% and 1.75% of your assets. Here’s an example: a 1% management fee on $40 million equals $400,000.
The largest portion of these fees – often more than 50% – goes toward investment services, such as portfolio construction, asset allocation, and trade execution. The remainder covers custody services, performance tracking, and basic coordination with outside tax and legal advisors. As your portfolio grows, the percentage fees may decrease due to economies of scale. This cost structure serves as a baseline for comparing traditional wealth management to the broader services offered by multi-family and single-family offices.
Services Included
Traditional wealth managers primarily concentrate on investment management. Their core offerings include portfolio construction across public markets, such as stocks, bonds, mutual funds, and ETFs. They manage risk, rebalance portfolios, and provide quarterly performance reviews. Additionally, they offer basic tax planning coordination and estate planning referrals, often acting as intermediaries to connect you with specialized third-party advisors.
This approach works well if your financial situation is relatively simple. If your assets are primarily liquid and invested in public markets, you have one primary residence, and your estate plan isn’t overly complex, these services may meet your needs. For example, founders with straightforward, liquid portfolios often find this model sufficient. The emphasis here is on simplicity – if your financial picture doesn’t require extensive administrative support, traditional wealth management can offer good value for its cost.
Services Not Included
That said, traditional wealth management doesn’t cover everything. Their focus is strictly on portfolio management, leaving several key areas unaddressed. For instance, they won’t handle bill payments, trust administration, or philanthropic planning. They also won’t manage your real estate holdings, oversee property maintenance, or assist with travel arrangements. If you’ve retained equity in a sold company or launched new ventures, they won’t provide advice on business operations or help structure compensation for your team.
As your financial situation grows more complex, these limitations become more apparent. If you own multiple homes, have tax obligations across several states, or invest heavily in private equity and hedge funds, traditional managers may struggle to keep up. They also lack the tools to provide consolidated reporting for all your assets. This means you’ll need to compile separate statements for private business interests, art collections, and real estate to get a full view of your net worth.
Multi-Family Offices: More Services at Higher Cost
Annual Costs and Fee Breakdown
Managing a $40 million portfolio through a multi-family office typically costs between $600,000 and $1,200,000 annually – equivalent to 1.5% to 3% of assets under management (AUM). This cost includes a base management fee of 1.5% to 2.5% of AUM (ranging from $600,000 to $1,000,000), additional technology and service fees ($50,000 to $200,000), and possibly performance fees tied to alternative investments.
According to the Citi 2025 Global Family Office Report, 36% of family offices operate within a cost range of 50 to 100 basis points, while 20% fall between 100 and 200 basis points. The complexity of your financial situation – such as managing multiple entities, navigating various tax jurisdictions, or higher allocations to alternative investments – can significantly influence these costs. Essentially, the more intricate the portfolio, the higher the price tag.
Additional Services Provided
Multi-family offices offer a broader range of services compared to traditional wealth management, tailored specifically to meet the needs of founders and entrepreneurs. These services include consolidated reporting that integrates all aspects of wealth – liquid assets, private equity, real estate, and business interests – into a unified view of net worth. They also handle trust and estate administration, tax preparation, and philanthropic planning, whether through foundations or donor-advised funds.
For founders who have exited their businesses, access to alternative investments becomes a major draw. Multi-family offices often have deep connections with top private equity funds, venture capital opportunities, and exclusive real estate deals that are typically out of reach for individual investors. On top of that, they provide concierge-level services – managing properties, coordinating travel, and handling the administrative complexities that come with newfound wealth. Firms like Iconiq Capital and Tolleson Wealth Management, for instance, specialize in assisting tech founders and entrepreneurial families, managing everything from concentrated stock positions to earnout agreements and venture reinvestments.
Limitations and Drawbacks
While the service offerings are extensive, they come with trade-offs. In a multi-family office setup, you share resources – such as systems, staff, and data platforms – with 10 to 50 other families.
"Family offices reflect the families that they serve… they vary widely in the types of investments they make, the types of services that they provide, and how they’re organized." – Elisa Shevlin Rizzo, Head of U.S. Family Office Advisory at J.P. Morgan Private Bank
This shared model can limit both privacy and customization. While top firms enforce strict confidentiality protocols, you won’t have the same level of control over your financial data as you would with a single-family office. Additionally, about 24% of family office clients globally have reported experiencing cyber threats or breaches, highlighting potential vulnerabilities in shared systems.
If your financial needs require highly specific attention – like an investment team that exclusively focuses on direct startup deals or a 24/7 response capability for urgent decisions – multi-family offices may fall short. Their shared infrastructure simply can’t match the personalized, round-the-clock focus of a single-family office.
Single-Family Office: Complete Control at Maximum Cost
Annual Costs and Expense Breakdown
Operating a single-family office for a portfolio worth $40 million comes with a hefty price tag, ranging from $2 million to $5 million annually – equivalent to about 5% to 12.5% of the assets under management. A significant chunk of this budget – around 67% – is allocated to personnel costs. For example, a Chief Investment Officer typically earns between $300,000 and $500,000, though in larger offices, this figure can hit a median of $821,000. Investment analysts add another $150,000 to $300,000 to the payroll, while tax and legal staff cost between $200,000 and $400,000. Administrative personnel salaries range from $100,000 to $200,000.
Beyond staffing, other major expenses include office space and technology ($150,000–$500,000), external professional services like audits and legal compliance ($100,000–$500,000), technology platforms ($50,000–$150,000), and insurance or other operational costs ($100,000–$300,000). On average, running a single-family office costs about $3.2 million annually, with personnel expenses consistently being the largest line item.
These costs, while substantial, come with the benefit of complete control over your wealth management approach.
Benefits of Full Control
Although the costs can be daunting, especially for smaller portfolios, they provide an unparalleled level of control – a critical factor after a liquidity event. A single-family office ensures absolute privacy for your financial holdings, tax strategies, and personal affairs. Moreover, you maintain direct oversight of every investment decision. Notably, 90% of families with single-family offices are actively involved in investment decision-making, ensuring alignment with their financial goals. With a dedicated team working solely for you, there’s no risk of divided attention or conflicts of interest that often arise when wealth managers juggle multiple clients.
The benefits extend far beyond investment management. A single-family office can tailor programs for next-generation education, develop personalized philanthropic initiatives, and manage complex, multi-jurisdictional assets exactly as you envision. Family offices often allocate around 45% of their portfolios to alternative investments, such as direct private equity deals, co-investments, and niche strategies – opportunities that traditional wealth managers may not provide. Additionally, by centralizing external advisors like legal, tax, and accounting professionals, a family office can streamline operations, eliminate redundant fees, and ensure a cohesive wealth strategy.
When the Math Works
Determining whether a single-family office is financially viable requires a careful cost-benefit analysis. Experts recommend that family office expenses should ideally stay below 3% of total assets to remain sustainable. For instance, with $40 million in assets and $2.5 million in annual costs, the expense ratio hits 6.25% – a figure that is far from sustainable. However, the financial equation begins to make sense as assets grow. At $100 million, an annual cost of $4 million represents about 4%, which, while still high, approaches feasibility. By the time assets reach $200 million, annual expenses of $5 million drop to approximately 2.5%, making the model financially sound.
"Smaller offices pay proportionally three times more for similar services." – Social Life Magazine
Recurring income streams can also help offset these costs. For example, if you retain a 30% ownership stake in a sold company that generates $2 million in annual distributions, the effective cost of running a $3 million-per-year family office drops to about $1 million – roughly 2.5% of your liquid assets. Families with steady business distributions, dividend income, or primarily illiquid assets like private equity or real estate can often justify a single-family office even with assets below the typical threshold. This approach ensures your wealth strategy aligns closely with your broader financial and business objectives.
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How to Choose Based on Your Situation
Asset Level and Complexity Factors
When deciding on the right wealth management structure, it’s not just about how much you have – it’s about how complex your financial situation is. For instance, a founder with $40 million tied up in publicly traded stocks and a single property has vastly different needs than someone with the same $40 million spread across business ownership, international real estate, and private equity investments. The real deciding factor isn’t just your net worth; it’s how many tax entities, households, and jurisdictions you’re juggling.
"Complexity is the single biggest driver of wealth management costs." – Family Office Exchange (FOX)
Things like legal entities, geographic spread, and business operations add layers of complexity. Are you still running businesses? Do you have intricate trust structures? If your financial situation is highly complex, even at $50 million, a multi-family office might be worth it. Conversely, if your setup is relatively simple, you might manage fine with traditional wealth management – even at $100 million. Tools like digital reporting and on-demand legal advice can streamline operations and cut costs, proving that efficiency often beats sheer headcount.
Understanding the complexity of your financial portfolio and the stability of your income stream is critical before making a decision.
How Recurring Income Changes the Equation
Steady income streams from business ownership or investments can significantly shift the financial equation. With consistent distributions from retained equity or dividends, you can handle higher fixed costs without dipping into your principal assets. Essentially, this recurring cash flow helps offset the operational costs of a family office, reducing the real burden on your liquid assets.
This is why founders with reliable income streams – whether from business distributions, dividends, or illiquid assets like private equity – can justify setting up family office infrastructure even at lower asset levels, such as below the typical $100 million mark. The cash flow covers the operational expenses without eating into core capital. On the other hand, families with unpredictable income should lean toward variable-cost options, like multi-family offices, which can adjust expenses based on cash flow fluctuations.
Decision Framework by Asset Range
At $25 million to $50 million, traditional wealth management or a multi-family office is the most logical choice for almost everyone. Running a single-family office at this level would mean spending 5% to 10% of your assets annually – an impractical expense. The focus here should be on keeping costs low while ensuring you get solid portfolio management and tax planning. A multi-family office only makes sense if you’re dealing with multiple households, cross-border tax requirements, or retained business interests that need advanced oversight.
At $50 million to $75 million, multi-family offices become an optimal solution for most, especially tech founders. These offices offer consolidated reporting, tax preparation, trust management, and access to alternative investments for a cost of 1.5% to 3% of your assets. A lean or virtual single-family office might be worth considering if you have at least $2 million in annual recurring income and a highly complex financial setup. Otherwise, you’re likely overpaying for control you don’t need yet.
At $75 million to $150 million, you’re at a crossroads. This is the point where it makes sense to run a detailed cost analysis comparing multi-family office fees with the fixed costs of a single-family office. If you have strong recurring income and value privacy and control enough to pay a 1% to 2% premium, a lean single-family office with a small team (two to four professionals) could work on a budget under $1 million annually. Without recurring income, however, multi-family offices remain the more cost-effective choice.
At $150 million and above, single-family offices start to make clear financial sense. With annual costs ranging from $2 million to $4 million – just 1.3% to 2.7% of your assets – you gain full control, privacy, and customization. This is especially appealing if you’re planning to transfer wealth across generations, have intricate philanthropic goals, or are actively building new ventures.
Conclusion: Design Your Wealth Strategy Like a Business Plan
Summary of Options and Costs
Think of your wealth management strategy like a business plan – rooted in data and tailored to your needs. Different approaches come with varying cost structures and service levels. For straightforward portfolios consisting mostly of publicly traded securities and simple estate plans, traditional private wealth management is a practical choice. If your financial situation involves greater complexity – such as cross-border holdings, retained business interests, or active venture portfolios – a multi-family office may be better suited, offering consolidated reporting and trust administration. For those managing portfolios exceeding $100 million or with substantial recurring income, single-family offices are an option, though they typically require $2–5 million annually to operate.
When deciding, consider both the size of your assets and the complexity of your financial needs. Even with a smaller asset base, higher complexity can justify a more robust (and costlier) solution. The key is aligning your wealth management costs with your actual goals, whether that’s tax planning, succession strategies, or philanthropy.
"Connect costs to the broader strategic plan for the wealth management program – be intentional about costs and map them to the family’s service needs and goals." – Charlie Grace, Cambridge Associates
These considerations are essential as you take your next steps.
Next Steps: Get Objective Guidance
Now, it’s time to design a service model that fits your unique needs and choose providers who can deliver on them. Conduct a thorough build-versus-buy analysis by comparing total costs across at least three providers. Ask yourself: What’s the total annual expense? Are you paying for services you don’t actually use? And how do these costs stack up against industry benchmarks?
For expert, unbiased advice, join M Studio’s Founders Meeting, where we’ll help you evaluate your options using clear numbers and a structured decision-making process – no sales pitches involved. Want ongoing tips on growing and preserving your wealth with the same precision you used to build your business? Subscribe to the AI Acceleration Newsletter. Plan your next move with the same diligence that made your company a success.
FAQs
How do I decide between a family office and a wealth manager after selling my startup?
Choosing between a family office and a wealth manager boils down to factors like cost, the complexity of your financial situation, and the specific services you need.
Wealth managers, such as those at Morgan Stanley or Merrill Lynch, typically charge 1-1.5% of assets under management (AUM). For someone with $40 million in assets, that comes out to about $400,000 to $600,000 annually. These professionals handle essentials like portfolio management, tax strategies, and estate planning. However, they generally don’t offer more specialized services such as bill payment, trust management, or direct oversight of your investment team.
A single-family office, on the other hand, offers a fully tailored experience with greater privacy and control. The trade-off? The cost is substantially higher – $2 million to $5 million annually, which is 5-12.5% of AUM for $40 million in assets. This option usually makes financial sense only if your total assets exceed $100 million or if you have a steady, significant income stream to help cover the expenses.
For those with highly intricate financial situations – think international real estate, private equity holdings, or ongoing business ownership – a multi-family office can serve as a middle ground. These firms charge 1.5-3% of AUM and provide more specialized services, such as consolidated financial reporting, management of charitable giving, and access to alternative investment opportunities.
The right choice depends on the size of your assets, the complexity of your finances, and whether you value extensive infrastructure or prefer a more budget-conscious approach.
How does recurring income affect the cost of running a family office?
Recurring income streams, like business distributions or dividend payments, can play a big role in cutting down the overall cost of running a family office. By covering a portion of the annual operating expenses, this type of income can make managing a family office more practical, even for families with smaller asset bases.
Here’s an example: Let’s say your retained business ownership generates $2 million in annual income, and your family office expenses total $3 million a year. That recurring income reduces your out-of-pocket costs to just $1 million. This not only makes the operation more affordable but also lowers the family office’s cost as a percentage of your total assets, making the setup easier to maintain and justify.
What are the risks of using a multi-family office for managing your wealth?
Using a multi-family office for wealth management does carry some risks. One major concern is operational weaknesses. If the office relies on outdated systems or lacks modern technology, it can lead to inefficiencies, mistakes, or even expose sensitive data to breaches. On top of that, cybersecurity threats are a serious issue. Financial and personal information could be at risk from cyberattacks or privacy violations.
Another area of concern lies in weak governance structures. Without strong internal controls and proper oversight, these offices can become vulnerable to fraud – whether it’s internal embezzlement or external scams. For families with assets spread across different countries, geopolitical and regulatory shifts can create additional challenges, potentially affecting the value of their assets or disrupting operations.
To address these risks, it’s essential to ensure the multi-family office has strong governance systems, top-notch cybersecurity defenses, and comprehensive risk management practices in place.
