Understanding the cost of running a Family Office: Budgeting for long-term sustainability

Running a family office involves more than overseeing investments; it requires thoughtful planning, strategic budgeting, and clear alignment with the family's long-term goals. We work closely with families to demystify the true cost of running a family office, ensuring they strike the right balance between control, service, and efficiency.

With some of Australia’s most prominent business families under our stewardship, we’ve seen how vastly the cost of a family office can vary, depending not only on size and complexity, but on values, legacy goals, and appetite for in-house versus outsourced services. Below, we break down the key cost components and share how Lineage helps families manage them strategically.

1. Staffing

One of the most significant expenses in any family office is staffing. Whether it’s a lean team focused on administration and bookkeeping or a robust in-house structure including a CIO, investment analysts, and legal or tax specialists, the makeup of your team must reflect your office’s scope. We often advise families on right-sizing their internal capabilities.

2. Technology and Infrastructure

Family offices rely on advanced technology platforms and infrastructure to streamline operations, facilitate reporting, and ensure data security. Costs may include software licenses, hardware, cybersecurity measures, data storage, and ongoing maintenance and upgrades.

3. Professional Services

Legal, accounting, audit, investment advisory, and compliance services are essential to the modern family office. But managing these relationships, and ensuring you're getting value, can be resource-intensive. At Lineage, we coordinate and consolidate professional services across disciplines, drawing on a network of trusted advisors. This not only reduces duplication and inefficiencies but also ensures alignment across the family’s strategy, tax position, and investment posture.

4. Operational Expenses

Day-to-day operational costs encompass office rent, utilities, office supplies, travel expenses, and communication tools. These expenses can vary based on the size of the family office, the location, and the level of services provided.

5. Outsourcing                   

Outsourcing is not simply a cost-cutting exercise; it’s a strategic decision. We help families evaluate what to keep in-house versus what to outsource based on scale, complexity, and cultural preferences. Functions such as bookkeeping, reporting, compliance, and payments are often handled by Lineage directly, allowing the family to maintain control without having to manage a sprawling network of service providers. We’ve found that many families prefer this coordinated, single-point-of-contact model, especially during succession transitions or liquidity events.

It is crucial to develop a comprehensive budgeting process that takes into account all of these cost components. We help you consider the specific needs and goals of your family office, align expenditures with your long-term objectives, build in flexibility, and regularly review and adjust the budget as circumstances change.

Budgeting isn’t just about controlling costs—it’s about ensuring the office works for the family’s purpose, vision, and future.

By understanding the cost structure and effectively managing expenses, you can ensure the financial sustainability of your family office while maintaining the desired level of service and support.

To find out more about how we can help with your individual family office requirements, please get in touch to arrange a confidential discussion.