Rising Costs and Disputes Force Some Family Offices to Close

Rising costs and family disputes are driving an increase in family office closures, advisers say, even as the sector continues to expand in the United States.

There were nearly 3,200 single-family offices in 2024 managing USD1.3tr, according to Deloitte estimates, but for some families the overheads are increasingly outweighing the benefits, particularly those with USD250m to USD750m in assets.

Advisers point to intense competition for experienced staff pushing up compensation, while inflation has lifted technology, compliance and operational expenses.

JPMorgan estimates the average annual cost of running a USD1bn-plus family office at about USD6.1m.

Rather than closing outright, some families are opting for outsourced chief investment officer models to reduce costs and complexity.

Multi-generational governance tensions are also contributing to family office closures as investment priorities diverge across heirs.