UBS survey: staff costs are almost 70% of family office pure operating costs

Staff costs are by far the largest component of what UBS terms the pure cost of running a family office, and that pure cost is itself 61% of the overall cost of the enterprise. The distinction carries the finding: the 2023 UBS Global Family Office Report, as summarized by FO Pro, separates the running of the office from asset management and banking-related charges, where the remainder of the overall cost sits. Almost 70% of the pure cost is staff, and 60% of survey respondents expected their spending on staff to rise over the next three years.

The same survey draws a line between the work offices keep and the work they buy. Strategic asset allocation stays in-house at 85% of respondents, portfolio risk management at 77% and financial accounting and reporting at 73%. Bookkeeping and accounting (72%), portfolio administration (62%), philanthropy (60%) and succession planning (51%) also clear a majority in-house. Outsourcing clusters on a shorter list: legal services at 64%, tax planning at 58% and cyber security at 53%.

Read as a pair, the lists suggest the split follows accreditation and technical tooling rather than how sensitive the work is. Tax planning and legal services carry professional licensing that one office cannot credibly reproduce at its own scale, and cyber security leans on monitoring technology and continuous coverage that few families can justify staffing. What stays inside is the work that requires knowing the family's balance sheet, its beneficiaries and its charitable intentions. The coverage does not say how the remaining 47% of respondents handle cyber security, whether in-house or otherwise.

Pay extends well past base salary. Six in ten offices offer employees a discretionary bonus and 47% a performance-linked one, while 23% offer co-investment opportunities. U.S. offices use all three more heavily, at 76%, 69% and 48%. Co-investment is the arrangement with an operating consequence, because it settles a retention problem with a share of the portfolio rather than cash: the family gives up part of the upside, and the employee's net worth becomes correlated with the holdings they help manage.

What the figures cannot do is describe the present. This is a 2023 reading, and the summary published by FO Pro reports no respondent count and no regional cut beyond the U.S. comparison, so the 61% and 70% are the survey's own aggregates. The three-year window those respondents were forecasting has since elapsed, which makes the staffing expectation a baseline rather than a current measurement. Whether it held is a question for a later edition of the same survey; the material in hand cannot answer it.