Breakeven assets: SFO versus MFO
This calculator estimates the asset level where running your own single-family office costs the same as using a multi-family office. Above that level, your own office costs less under these assumptions.
Method
We compare recurring annual operating costs. Fixed costs stay constant as assets change. Variable costs are expressed in basis points of assets. One basis point equals 0.01 percent. The breakeven point is where the two annual cost lines intersect. Enter your own budget estimates and the quoted MFO pricing for a useful planning estimate. Compare service scope and staffing needs alongside price. Office economics vary with assets, staffing, and services, so set the budget before choosing what to retain or source externally.
Formulas
- Rate conversion: decimal rate = basis points / 10,000
- Sfo cost: SFO fixed annual cost + current assets × SFO variable cost / 10,000
- Mfo cost: MFO fixed annual cost + current assets × MFO variable cost / 10,000
- Breakeven assets: (SFO fixed annual cost - MFO fixed annual cost) / ((MFO variable cost - SFO variable cost) / 10,000)
- Annual savings above breakeven: MFO cost at current assets - SFO cost at current assets
- Interpretation: Your own SFO costs less when current assets are above breakeven assets, assuming the MFO variable rate is higher than the SFO variable rate and the calculated breakeven is positive.
Worked example
- Breakeven assets = (1,200,000 - 100,000) / ((70 - 20) / 10,000) = 220,000,000.
At 50,000,000 of assets, SFO cost is 1,300,000 per year. MFO cost is 450,000 per year. The MFO is lower by 850,000 per year. The SFO becomes lower than the MFO above 220,000,000 of assets.
Assumptions
- One basis point equals one hundredth of one percent, or 0.0001 as a decimal. Source
- The comparison uses recurring annual costs and excludes taxes, investment performance, financing costs, one-time launch costs, and the value of family control or privacy. Source
- The calculator treats the MFO and SFO variable rates as basis points charged on assets and assumes no fee tiers, minimum fees, or breakpoint pricing. Source
- This is an educational cost comparison. Actual staffing, technology, legal, accounting, custody, insurance, and governance costs vary by family and jurisdiction.