As the net worth of the world’s richest families grows, so too does the cost of managing their private investment offices. A recent survey by J.P. Morgan Private Bank shows that family offices overseeing at least $1 billion in assets now spend an average of $6.6 million annually on operating expenses. That figure is up $500,000 from the bank’s previous survey in 2023 and $500,000 higher than the $6.1 million reported in 2024.
Consultants say the rise in spending is closely tied to the rapid accumulation of wealth over the past decade. As asset bases expand, family offices require larger teams, more specialised expertise and stronger systems to manage increasingly complex portfolios. Cutting costs tends to happen when assets decline, but sustained wealth creation typically drives additional hiring and infrastructure investment.
A significant portion of the increased spending stems from higher compensation for investment professionals. According to J.P. Morgan Private Bank, salaries and incentives for top talent represent the largest share of operating budgets. Family offices are competing directly with private equity firms, hedge funds and other financial institutions, fuelling what many describe as an ongoing talent war.
Although around 80% of family offices outsource at least part of their portfolio management, cost reduction is not the main motivation. Only 28% cite lowering expenses or easing internal resource pressure as a primary reason. Instead, families are more focused on securing strong performance track records and access to private investment opportunities when selecting external advisers.
Attitudes toward rising costs vary across generations. Some principals are relatively unconcerned about growing expenses, placing a premium on the privacy, control and autonomy that a single-family office structure provides. With multiple entities and holding companies in place, some families may not closely monitor total operating outlays.
However, heirs often take a more scrutinising view. Advisors note that the next generation frequently reassesses the cost structure of the family office, particularly after a wealth transfer. In some cases, they explore consolidating operations or even dismantling the office entirely to preserve capital for future generations. As families expand and lifespans lengthen, younger members tend to focus more intently on ensuring long-term sustainability and efficient use of wealth.
