Starting or creating a family office
What Staffing Costs Are Easiest to Underestimate When Opening an Office?
Short answer. Families often underestimate the full cost of senior talent, specialist support, and time spent managing outsourced work. Include benefits and recruiting costs, plus training and backup coverage. Account for time spent coordinating advisers. Match each role to a defined workload, then compare total employment costs with a scoped outside-services proposal.
The staffing costs most often underestimated include a senior hire's full cost and the support that person needs. Budget for the work the role must cover, including salary and related costs.
Look Beyond Salary
For each employee, account for salary, benefits, recruiting, onboarding, training, equipment, and the systems needed to perform the job. Consider whether the role needs backup when the employee is unavailable. A small office can become dependent on one person for payments, records, reporting, or adviser coordination, and continuity requires time and a workable handoff process.
Define the role before estimating its cost. A family office leader may coordinate advisers and communicate with relatives, while also overseeing administration or managing investment work. Those responsibilities can require different skills. If the role is too broad, the family may later add another employee or pay specialists to cover work that was not clearly assigned. The family office compensation estimator can help frame salary assumptions, while single family office talent search covers role definition and hiring considerations.
Include Specialist and Outsourced Support
Legal, compliance, and accounting support can be provided internally, externally, or through a mix. Technology and investment support can also be arranged in these ways. Outside support still takes staff time to select and brief providers, then supervise their work and review it. Include provider fees along with internal coordination time. Ask for a defined scope, billing terms, and any expected additional charges so the model can distinguish ongoing support from one-time work.
Some functions may need a specialist only periodically. An outsourced compliance firm or outside counsel, for example, may fit the workload better than a full-time hire, depending on the office's activities. Compare the costs and weigh the provider's expertise and responsiveness, along with the oversight required. The partners, vendors, and service providers guide can help structure that review.
Match Capacity to the Workload
Estimate recurring tasks and the time they take, including reporting cycles, bill review, meeting preparation, record maintenance, and coordination with family members. Include irregular work such as system setup or a complex transaction, and decide whether it belongs in a role, an outside engagement, or a separate project budget.
Compare a lean staffing plan with a more staffed version. Check whether the office can outsource nonessential tasks and keep clear internal ownership of the work. Review the cost assumptions with the family and update them when services or responsibilities change. For compensation or employment questions with legal or tax implications, talk with your attorney or CPA.
Acquiring top talent dedicated only to your single family office can be expensive and difficult, so many families have decided to outsource this role to a third-party advisor.
Sources: How to Start a Family Office, The Single Family Office. Informational only, not financial, legal or tax advice.