An outsourced CIO takes ownership of the decisions that sit above any single account. Families at this level rarely lack investment options. What they usually lack is a framework: a written statement of what the capital is for, which risks are acceptable, who decides what, and how decisions get reviewed. Without that, portfolios drift toward whatever was most recently pitched.

A typical OCIO mandate covers six functions:

1. Investment policy. Draft and maintain the investment policy statement (IPS), including objectives, risk limits, liquidity needs, allocation ranges, and decision rights.
2. Asset allocation. Set the strategic allocation and decide when, and whether, to tilt from it.
3. Manager selection and monitoring. Evaluate every manager on return, risk, diversification contribution, fees, and tax efficiency, then hire, retain, or replace them.
4. Risk and liquidity oversight. Monitor concentration, private-market commitments, capital calls, and the cash needed for the family's actual spending.
5. Consolidated reporting. Combine every custodian, fund, and private holding into one view that a family board can act on.
6. Investment committee support. Prepare materials, document decisions, and keep a record that shows the process was followed.

The common thread is accountability. Many families have five capable advisors and nobody responsible for how their work fits together.

Does an outsourced CIO replace your existing advisors?

It does not have to. The most common objection to an OCIO is that it means firing people. In practice, an OCIO can sit above existing managers, custodians, and specialists, and everyone can stay in place on day one.

What changes is that one fiduciary is now responsible for the whole. Some managers will be kept after evaluation, and that is a legitimate result. A recommendation to keep a manager carries more weight from an overseer with no incentive to replace it.

How is an OCIO priced?

OCIO fees generally follow one of three structures:

• Percentage of assets. A rate applied to the current balance every billing period, usually with tiers at larger sizes. The fee rises and falls with markets.
• Fixed fee. A dollar amount, often set from the account value at the start of the relationship, that does not move with markets.
• Retainer. A negotiated annual amount tied to scope and complexity rather than assets.

Our Outsourced CIO fee is the second type. A percentage from our published schedule is applied once, to the account value at inception, and steps down in each of the first three years. One rate applies to the whole account.

Based on WealthEQ's published Outsourced CIO schedule, assuming no material additions or withdrawals. The fee adjusts for inflation after year three. Up to $5,000 a year is rebated toward an annual all-advisor meeting.

The step-down reflects where the work is concentrated. Most of the heavy lifting happens early: writing the policy, auditing every manager and cost layer, and building the reporting.

What is the all-in cost of an OCIO?

The OCIO's fee is only the top layer. Multi-manager portfolios accumulate cost in layers, and most families can name only the first one:

• OCIO or advisory fee
• Separately managed account fees charged by individual managers
• Fund expense ratios inside mutual funds and ETFs
• Private fund costs: management fees and carried interest
• Custody, platform, and trading costs
• Tax drag from poor asset location and unnecessary turnover

Two OCIO quotes that differ by 0.10% can easily differ by much more once these layers are included. Some providers also add costs inside the portfolio, such as proprietary funds or revenue-sharing arrangements, that do not appear in the headline fee.

When comparing providers, ask each one for a full accounting of every layer, expressed in dollars. We make that accounting a standing part of every OCIO engagement. Families who have never seen the full total are often surprised by it.

Is an outsourced CIO cheaper than hiring an in-house CIO?

Below several hundred million dollars, it usually is. The math is not close.

In Heidrick & Struggles' 2025 survey of family office investment professionals, U.S. chief investment officers reported a median cash base salary of about $560,000. Among respondents at offices managing under $1 billion, the median base across senior investment roles was about $320,000. Both figures exclude bonuses, which the survey shows are substantial, as well as benefits, analysts, research subscriptions, and reporting systems.

Measured against assets, the base salary alone works out to:

Base salary only. Total cost of an internal investment team is materially higher.

At larger scale, and especially for families making direct investments in operating companies or real estate, a dedicated internal team becomes more economical and often better suited to the work. Below that scale, an OCIO gives a family institutional process at a fraction of the cost.

When does a family need an OCIO?

The usual signals are structural rather than size alone:

• Assets of roughly $25 million or more spread across several advisors, custodians, or private funds
• No one accountable for the whole, so each advisor optimizes their own piece
• A family board or investment committee that needs a documented, defensible process
• A liquidity event, such as a business sale, that turns a concentrated position into a portfolio
• Growing private-market exposure, with capital calls and liquidity that need to be planned

Questions to ask any OCIO

1. Are you a fiduciary on the entire mandate, at all times?
2. Do you receive compensation from any manager, fund, or platform you recommend?
3. What is the all-in cost of my portfolio today, in dollars, and what will it be under your mandate?
4. Does your fee rise when markets rise?
5. Will you work with our existing managers and custodians, or require us to move?
6. Is the mandate discretionary or non-discretionary, and where is that documented?

Our answers to all six are on our Outsourced CIO page and in our Form ADV Part 2A. WealthEQ provides OCIO services to families and family offices only, not to foundations, endowments, or other institutions.

Under the assumptions below, ten years of advisory fees on a $3 million portfolio ranged from about $190,000 to $395,000. The calculation method drove most of that range, more than the starting rate did. At the same growth rate, the same portfolio paid 1.5 to 2.1 times as much under a 1.00% AUM fee as under a fixed annual fee.

We ran the numbers because most fee comparisons stop at year one, and year one is where the difference is smallest.

The assumptions

• Starting value: $3,000,000, with no contributions or withdrawals.
• Fees are paid from the portfolio at the end of each year. That money no longer compounds, so the cost includes lost growth.
• AUM fees are 1.00% and 0.75% of the beginning-of-year balance, recalculated every year. Many AUM schedules are tiered, so a household's blended rate at $3 million often falls somewhere in this range.
• Fixed fee follows WealthEQ's published Personal CFO schedule. $3 million falls in the 0.80% breakpoint, for a $24,000 starting fee. The 0.10% wealth-plan reduction begins on the plan's one-year anniversary; we assume the plan is delivered at the start of the relationship, so the reduction applies from year two. After five years invested, a further 0.20% reduction applies. Beginning in year six, the fee adjusts each year by the actual change in CPI over the prior year. For this illustration we assume 3% CPI, a hypothetical figure.
• Growth rates of 0%, 4%, and 7% a year are hypothetical and chosen to show sensitivity. They are not forecasts.

Year by year: where the gap opens up

At 4% hypothetical annual growth, the fixed fee starts higher than a 0.75% AUM fee. It falls below it in year two and never crosses back.

Hypothetical illustration. 4% assumed annual growth, fees deducted at year end, no contributions or withdrawals. Not a projection of any account's results.

Notice what the AUM columns do. Both rise every year, though nothing about the relationship has changed. The portfolio grew, so the fee grew. By year ten, the 1.00% fee is 30% higher than it was in year one. The fixed fee is about 28% lower than it was in year one, even after five years of assumed 3% CPI adjustments.

How do the results change with market returns?

The AUM fee rises with returns and the fixed fee does not, so the gap widens as returns rise. At 0% growth, the gap is mostly the difference in rates.

Ten-year cumulative fees on a hypothetical $3,000,000 portfolio. The fixed-fee columns do not change with growth because the fee is not tied to the balance.

Two observations from this table:

1. The fixed-fee totals are identical in every row. That is the definition of the model, and it is why the total is predictable before the relationship begins.
2. The reductions matter. Without them, the fixed fee totals about $251,000. That still beats a 1.00% AUM fee in every scenario. Against a 0.75% AUM fee, it is about $10,000 cheaper at 4% growth, about $49,000 cheaper at 7%, and about $34,000 more expensive in a flat market. We built the reductions into the schedule deliberately. They reward the two behaviors we consider most important to long-term outcomes: having a plan and staying invested.

When does an AUM fee cost less?

An AUM fee can cost less in two situations, and you should know both before choosing.

When the AUM rate is low and markets are flat. If your current advisor charges 0.75% or less and the portfolio goes nowhere, the AUM fee can come out ahead. In our flat-market scenario, a 0.75% AUM fee ($217,556) beat the fixed fee without reductions ($251,242).

After a large decline. An AUM fee falls with the portfolio. A fixed fee does not. If our hypothetical portfolio dropped 25% in year one, a 0.75% AUM fee would fall to roughly $16,700 in year two. The fixed fee would stay at $21,000. In a down market, the AUM client pays less and the fixed-fee client pays the same.

We think the trade is worth it. Market declines are temporary for a long-term investor, while the upward ratchet of an AUM fee is permanent. But it is a real trade, and a firm that describes a fixed fee as cheaper in every scenario is not giving you the whole picture.

Why the calculation method matters more than the rate

An AUM fee charges again, every period, against whatever the balance has become. Over long horizons, that has two effects that do not show up in a year-one quote.

The fee compounds with your returns. A 1.00% fee on a portfolio that doubles becomes a fee that doubles. The scope of the work, the hours, and the complexity may not have changed at all.

It creates a quiet conflict. Under an AUM fee, every decision that reduces the balance permanently reduces the advisor's revenue. That includes paying off a mortgage, funding a business, buying real estate, and making a large gift to children or charity. A good advisor recommends those moves anyway when they are right. A fee set once removes the conflict from the conversation.

What still moves a fixed fee

A fixed fee is not a frozen fee, and you should ask exactly what moves it. Under our schedule:

• Material additions or withdrawals of more than 10% of the fee base over a rolling twelve months reset the fee base. Routine saving and retirement distributions do not.
• Inflation adjustments begin in year six for Personal CFO relationships, using the actual change in CPI. If CPI rose 3% in year five, the fee rises 3% at the start of year six.
• Market movements never change the fee, in either direction.

The full mechanics, including a worked example of adding $10 million in year six, are on our fee schedule.

The three questions to ask any advisor

The labels "flat fee," "fixed fee," and "fee-only" are used loosely across the industry. Three questions cut through them:

1. Do you receive compensation from anyone other than me? This tells you whether the advisor is fee-only.
2. What is my fee in dollars at my account size? This tells you how the fee is calculated.
3. If my portfolio doubles and nothing else changes, what do I pay? This tells you whether the fee reprices. It is the question almost no one asks, and it is where most of the ten-year difference comes from.

Every registered advisor's answers are in its Form ADV Part 2A. Ours is here.