Technical article

Family Office or Trust Company: The Yearly Cost and the Size Where It Starts to Pay

That includes its staff, which is 10 to 15 people in a small family office, and its running cost.

By Neil Solomon · 3 min read

Picture a family with US$50 million, an example amount. Their adviser mentions a family office, and a friend mentions a private trust company. Both sound like the next step up. The family asks a plain question. What does it cost each year, and at what size does it pay?

The yearly cost, by source

Surveys of family offices count operating cost as a share of assets. The share depends on the size of the office.

A basis point is one hundredth of one percent. The post also says wealth managers charge 0.50% to 1.50% and that a small office employs 10 to 15 people.

What the sources say about size

The size at which a single-family office pays is argued over. Published thresholds run from about US$100 million, in three sources, to US$100 million to US$200 million in a magazine. One source offers an outsourced office from about US$10 million. The investor post calls the US$100 million to US$500 million thresholds folklore, and says an outside team is usually more efficient at US$25 million to US$50 million.

A magazine article (tier U) divides an average office cost of US$3.2 million by a US$50 million portfolio and gets 6.4% a year. That is a rough sum from one average, and not a normal case. The same post gives about 2.1% a year at US$20 million. The figures point the same way: a full office takes a large share of a US$50 million portfolio. A family-office wiki (tier U, a secondary source) quotes a most common band of 0.6% to 1% and an average near 0.41%. The range is wide, and the surveys count different offices.

A private trust company

A private trust company is a trust company owned by one family to serve that family. A trade-press author wrote in 2014 that it rarely makes sense at US$100 million and generally not below US$250 million. It is most apt at US$500 million of trust assets. Lawyers' set-up fees for a US$100 million to US$250 million family office or private trust company are often well above US$100,000. The same article names options for smaller sums: a directed trust, a distribution committee, fiduciary insurance and a multi-family office.

South Dakota licenses these companies. A private trust company there needs US$200,000 of capital, a US$100,000 deposit and, in the states that allow these companies, about 5 to 9 months for approval.

Who this touches

Your children inherit the structure along with the money. That includes its staff, which is 10 to 15 people in a small family office, and its running cost. Both change who the family talks to about money.

The objection

You might say that a bigger structure feels more secure to hand to the next generation. That wish is understandable. The numbers say that, below the published thresholds, a large share of the money goes to running it. A multi-family office, which shares a team, is one of the alternatives the trade-press author names.

A few doors

You could ask a multi-family office for its fee at your size. You could ask a trust company how a directed trust would split the work.

At what size did your family start to think about its own structure, and what moved you? Share it here, and someone may benefit from your story.

Figures are estimates for planning, based on public data. Date read: October 2026.