What does an outsourced CIO actually do?
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:
- Investment policy. Draft and maintain the investment policy statement (IPS), including objectives, risk limits, liquidity needs, allocation ranges, and decision rights.
- Asset allocation. Set the strategic allocation and decide when, and whether, to tilt from it.
- Manager selection and monitoring. Evaluate every manager on return, risk, diversification contribution, fees, and tax efficiency, then hire, retain, or replace them.
- Risk and liquidity oversight. Monitor concentration, private-market commitments, capital calls, and the cash needed for the family's actual spending.
- Consolidated reporting. Combine every custodian, fund, and private holding into one view that a family board can act on.
- 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.
| Account value at inception | Year 1 | Year 2 | Year 3 | 3-year total |
|---|---|---|---|---|
| $25 million | $125,000 | $112,500 | $100,000 | $337,500 |
| $60 million | $240,000 | $210,000 | $180,000 | $630,000 |
| $100 million | $300,000 | $250,000 | $200,000 | $750,000 |
| $250 million | $625,000 | $500,000 | $437,500 | $1,562,500 |
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:
| Investable assets | $320,000 base as % of assets | $560,000 base as % of assets |
|---|---|---|
| $25 million | 1.28% | 2.24% |
| $100 million | 0.32% | 0.56% |
| $250 million | 0.13% | 0.22% |
| $1 billion | 0.03% | 0.06% |
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
- Are you a fiduciary on the entire mandate, at all times?
- Do you receive compensation from any manager, fund, or platform you recommend?
- What is the all-in cost of my portfolio today, in dollars, and what will it be under your mandate?
- Does your fee rise when markets rise?
- Will you work with our existing managers and custodians, or require us to move?
- 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.