CHICAGO, Oct. 19, 2017 (GLOBE NEWSWIRE) -- Family Office Exchange (FOX), a global membership community of enterprise families and their key advisors, released the 2017 FOX Family Office Study of family offices which revealed that the cost of running a family office, as a percentage of investable assets, has remained constant between 2014 and 2017.
“Although the overall cost has remained stable, there have been shifts within the makeup of expenses,” said Amy Hart Clyne, Executive Director of the FOX Knowledge Center. “We see that external investment management costs are declining as families incur reduced fees as advisors compete harder for business. Those savings are being re-deployed to staff up internal operations for sourcing and vetting direct private equity investments and philanthropic activity.”
In the study, 57% of families reported active involvement in direct investing. The internal costs of running the family office, which include staff, occupancy, and technology expenditures, are now 51% of the total. External investment expense is down to 36% of the total.
Total Cost of Managing Wealth | 2014 | 2017 | ||||||||||||
Internal Family Office Costs | 48 | % | 51 | % | ||||||||||
External Advisory Costs | 12 | % | 13 | % | ||||||||||
External Investment Costs | 40 | % | 36 | % | ||||||||||
Total | 100 | % | 100 | % | ||||||||||
Based on a subset of common participants in both studies. | ||||||||||||||
Source: 2017 FOX Family Office Study ©2017 Family Office Exchange |
Other highlights of the study include:
Average % of Assets Held in Trust | Business Assets | Investable Assets | ||||||||||||
Generations 1-2 | 44 | % | 52 | % | ||||||||||
Generations 3+ | 58 | % | 61 | % | ||||||||||
Average | 49 | % | 56 | % | ||||||||||
Source: 2017 FOX Family Office Study ©2017 Family Office Exchange |
First launched in 1991, the FOX Family Office Study is the longest running study of its kind and the only one that provides participants with a comprehensive report designed to articulate the value of the office and educate board members and clients about how their family office compares to other family offices. The final report provides insights on Ownership and Governance, Owner Engagement and Education, Office Strategy and Risk Management, Family Office and Advisor Services, Cost of Wealth Management, Staff Experience, and Direct Investing.
For anyone interested in participating in the next study or joining FOX to obtain a summary of the report, please contact info@familyoffice.com.
About Family Office Exchange
To learn more about Family Office Exchange (FOX), please email us at info@familyoffice.com or visit www.familyoffice.com/media-kit.
Media contact
Marvin Pollack
press@familyoffice.com
1-312-327-1200