The question of cost is legitimate and often poorly documented: family offices rarely publish their terms, there are no official public statistics on their fees, and comparisons between different kinds of structure (single or multi-family office, integrated or pure coordinator) are hard to interpret. This article describes the common billing models, what drives the cost and the questions to ask — without market figures and without Ridger's own terms.
Four billing models
1. The annual retainer
The family office charges a fixed annual amount, independent of the value of the assets, for a scope of services agreed in advance. This model is often preferred by firms that want to stay independent of portfolio size.
Advantages: transparency; no incentive to increase the assets covered; a predictable budget for the family.
Limitations: requires a precise definition of scope; services outside that scope must be provided for in the contract.
2. A percentage of assets under coordination
The fee is calculated as an annual percentage of the assets covered (often called assets under administration rather than under management when the family office does not manage the assets itself). The rate is often tiered, decreasing as wealth grows.
Advantages: the fee follows the development of the wealth; simple to calculate.
Limitations: the fee rises with asset values even if the workload does not change; it can encourage widening the scope of assets covered rather than recommending simpler structures.
3. Hourly or project fees
Some assignments fall outside the recurring scope and are billed by time spent or per project: selecting or replacing managers, due diligence on a custodian bank, restructuring a holding arrangement, preparing a transfer of wealth. The key is to define the expected deliverable precisely before the engagement, to avoid scope creep.
4. The hybrid model
A base retainer covers recurring services (reporting, coordination, regular meetings), complemented by project fees for one-off work (restructuring, succession, manager selection). This model offers a predictable base and flexibility for complex or exceptional assignments.
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What drives the cost
Whatever the model, the cost depends mainly on the real complexity of the wealth:
- the number of custodian banks and managers to coordinate;
- the number and type of structures (companies, foundations, trusts) and jurisdictions involved;
- the frequency and depth of consolidated reporting;
- the number of family members and generations involved;
- the intensity of the relationship: meetings, family councils, expected availability;
- foreseeable one-off assignments (succession, sale of a business, relocation to Switzerland).
The single family office: a different cost logic
An in-house single family office requires a dedicated team, technology tools, premises, professional insurance and its own governance. These costs are largely fixed and independent of the size of the wealth, which is why this model is generally reserved for the largest fortunes.
Indirect costs to consider
Beyond the family office's direct fees, a family must take into account the costs of the wider ecosystem:
- Bank charges (custody, transactions, foreign exchange)
- Management fees of the independent managers engaged
- Legal and tax fees (lawyers, tax advisers, notaries)
- Costs of holding structures (holding company maintenance, trust)
These costs exist whatever model is chosen; a coordinator makes them visible in the reporting, so they can be compared and discussed with each provider.
Retrocessions and transparency
A financial service provider within the meaning of the Financial Services Act (FinSA) must inform its clients of the costs of the financial service it recommends (art. 8 FinSA). If it receives compensation from third parties — commissions, retrocessions — it may keep it only if it has informed the client in advance of its type and scope and the client has expressly waived it; otherwise it must pass it on to the client in full (art. 26 FinSA). Knowing who pays the provider is therefore as important as knowing the level of its fees.
Questions to ask
- Which billing model, and what exactly does the base fee cover?
- What is billed on top (projects, disbursements, third-party costs)?
- Does the provider receive retrocessions or commissions from banks, managers or products? If so, are they passed on?
- How does the fee change if the wealth or the scope changes?
- What are the notice period and exit terms?
Compare like with like
Offers can only be usefully compared on the same scope: a retainer that includes consolidated reporting, tax coordination and preparation of family councils cannot be compared with a percentage of assets that covers bank oversight alone. Before comparing amounts, compare the scope of work.
To discuss the arrangements for support tailored to your situation, Ridger invites you to a confidential conversation.