The question of cost is legitimate and often poorly documented: family offices rarely communicate their fee schedules transparently, and comparisons between structures of different natures (single vs multi, integrated vs pure coordinator) are difficult to interpret. This article describes the market billing models, without addressing Ridger's own fees.
Three principal billing models
1. Percentage of supervised assets (% AUM)
This is the most widespread model in the industry, inherited from traditional wealth management. The fee is calculated as an annual percentage of assets under supervision (AUM — Assets Under Management or, in the family office context, Assets Under Administration).
Market benchmarks: according to industry studies, family offices charging on this basis generally apply rates of between 0.3% and 1% per year. The rate decreases as the portfolio grows (degressive pricing). For a CHF 20 million portfolio, the annual cost might thus be between CHF 60,000 and CHF 200,000 depending on the scope of services.
Advantages: automatic alignment between portfolio growth and the provider's remuneration; predictability for both parties.
Limitations: may create incentives to supervise more assets rather than to recommend more efficient structures; remuneration increases mechanically with wealth even if the workload does not increase proportionately.
2. The fixed retainer (annual flat fee)
The family office charges a fixed annual amount, independent of asset value. This model is often favoured by structures wishing to demonstrate complete independence from portfolio size.
Market benchmarks: annual retainers for a coordination and consolidated reporting service generally range from CHF 50,000 to CHF 250,000 depending on mandate complexity, the number of banks and structures involved, and the intensity of the relationship.
Advantages: complete transparency; no incentive to increase supervised assets; predictable budget for the family.
Limitations: may appear high for modest portfolios; requires a precise definition of the service scope.
3. The hybrid model
The most common model in practice is a hybrid: a base retainer covering recurring services (reporting, coordination, regular meetings), supplemented by time-and-materials fees for ad hoc assignments (restructuring, succession, manager selection).
This model offers a predictable base and flexibility for complex or exceptional mandates.
Ridger
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Project-based fees
Some assignments fall outside the recurring scope and are billed separately, on a time-spent or fixed-fee basis: selecting or replacing managers, due diligence on a custodian bank, restructuring a holding arrangement, preparing a succession. Market orders of magnitude range, depending on the complexity and duration of the assignment, from CHF 10,000 to CHF 50,000. The key is to define the expected deliverable precisely before engaging, to avoid scope creep and billing surprises.
The cost of a single family office
For comparison, an internal single family office typically requires a team of at least 3 to 5 people (director, analyst, assistant), technology tools, premises and professional indemnity insurance. The total annual cost of such a structure is generally in excess of CHF 1 million, which only makes economic sense from very significant portfolios (CHF 100 million and above).
Hidden costs to consider
Beyond the direct fees of the family office, a family must account for the costs of the overall ecosystem:
- Banking fees (custody, transactions, foreign exchange)
- Management fees of the mandated independent managers
- Legal and tax fees (lawyers, tax advisers, notaries)
- Holding structure maintenance costs (holding company, trust)
A well-sized family office can generate savings on these items by optimising selections and creating competition among providers.
How to assess value for money?
The value of a family office is not measured solely by its cost, but by all the benefits it generates: better allocation, reduced banking costs, legal tax optimisation, prevention of errors during succession. For families whose portfolio presents genuine complexity, this ratio is generally favourable.
Finally, offers can only be usefully compared on a like-for-like scope: a retainer covering consolidated reporting, tax coordination and the preparation of family council meetings cannot be compared with an AUM percentage covering bank supervision alone. Before comparing figures, compare specifications.
To discuss the arrangements for support tailored to your situation, Ridger invites you to a confidential conversation.