Preserving and sustaining wealth over generations is the goal of a family office, and managing costs is an important part of that. Monitoring and optimizing the fees associated with investing is critical in this stewardship, although that can be a complex undertaking given the mix of asset classes involved.
“There’s always going to be fees around a family office investment program, whether they decide to build out a team in-house, which in and of itself is costly, or outsource to a third party,” says Marjorie Skolnik, managing director of CI Coriel Capital Inc. in Montreal, an outsourced chief investment officer to family offices in Canada.
She says family offices exercise different degrees of control over the investment process, “and control is not always synonymous with sound and informed decision making.” While fee transparency is a concern for a business looking to preserve its legacy, “the idea that fees are always bad is incorrect,” Skolnik says, given the value the investments can bring.
The real challenge for family offices is understanding where the fees lie, says Craig Harrison, head of operations at Global Manager Research, a performance-measurement database in Oakville, Ont., that tracks funds available to Canadian institutional and high-net-worth investors.
In a family-office environment, you can burn a lot of time digging down into fee structure and the complexities of how fees are charged.
Brennan Carson, Equate Asset Management
The calculations include fees, he says, with reporting by managers and asset allocators involved in some 2,500 funds. Among them are 150 alternative products, a space that he notes has expanded beyond hedge funds to private investments. When it comes to fees, “they’re certainly less inclined to provide a standard fee schedule, because it’s a lot more opaque—and it’s negotiable,” he says.
Brennan Carson, a partner and portfolio manager at Equate Asset Management, an independent investment firm in Oakville that includes a multi-family office, says that in such cases, “you have to think about what you’re paying and what you’re getting in return.” The discussion around fees has carried on over the past 20 years, he notes, with awareness growing while some fees have fallen. For example, index and exchange-traded fund structures have democratized access to what were higher-fee pooled funds.
A family office looking for a specialist investment manager to execute on a strategy or access a geography or asset class can expect to pay a fee. “But you are always seeking ways to make that as effective as possible,” Carson says. “As a trusted advisor, you should be thinking in great alignment in terms of the costs of running the business.”
That doesn’t mean cutting corners but seeking clarity and optimizing fee structures, he says. “I’ve never believed that a family office is in a race to the bottom when it comes to fees, but it behooves them to be very diligent in looking at the return they’re getting.”
Competition can make things better
New entrants in the financial services world “are changing the dynamic of how these fees work, for the better,” he notes. “Competition is healthy.” But complexity can drive fees, he says, and auditing costs in some structures “continues to be a murky area.”
For family offices that use third parties to invest, Skolnik says, a recent shift in the Canadian regulatory landscape as of Jan. 1, 2026, requires total-cost reporting, referred to as CRM3, where investment dealers disclose the dollar-value costs of owning investment funds, including previously embedded fees.
Buyer beware, because there is the potential for a lot of layers on layers of fees, and it’s not a well-regulated space.
Marjorie Skolnik, CI Coriel Capital Inc.
“It puts the information at the fingertips of whoever’s responsible for consolidating what the fee report would look like internally,” she says. “I think that’s going to help families to wrap their heads around this.”
She notes that since her company was launched in 2006, it has given its clients a consolidated fee analysis. “It lets them know what they were paying in dollars and in basis points every single year,” Skolnik says, which allows for “a sober reflection on how much of a grind they’re absorbing in terms of fees, and is that worth it?”
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It’s especially helpful to “do a side-by-side analysis of the value-add of a specific management type versus the fees paid,” she says—for example, whether active managers contribute to a portfolio’s overall return.
Carson says that CRM3 is more assertive than previous such standards, putting the onus on investment manufacturers and asset managers to set out fee amounts.
“In a family-office environment, you can burn a lot of time digging down into fee structure and the complexities of how fees are charged,” he says. In a private equity portfolio, however, fees can be related not just to managing the assets but also to sourcing the deals and underwriting, he notes. “There’s layers.”
Things get cloudy
Harrison says that when a manager pulls together a so-called fund of funds, “you’re assuming you’re going to get the best returns possible,” but fees can be “cloudy” because they’re lumped together.
The investor also isn’t always seeing relationships behind the scenes. “You get a bill that says your fee is 1.8 per cent or whatever, and that’s the manager’s fee plus the other fees, so you don’t know what the other fees are.”
It would help if the reporting included what everyone is paid in dollar terms, he says. “That gets overlooked a lot.”
[In the alts space], they’re better at not highlighting what the fees are, because it’s more exciting to talk about how much money you’re going to make.
Craig Harrison, Global Manager Research
A family office with investment staff is typically knowledgeable about how fees break down and add up, “but there may not be enough challenging going on to reconcile whether or not the fees are worth it,” Harrison adds. It’s especially easy to lose sight of costs inside a deal. “They might get through the cracks, because they’re not in your face all the time.”
Family offices should have experts look into the fees in an investment to ensure full transparency and “to identify any charges that may not have been clearly disclosed,” he says.
Cash drag, where part of an investment is sitting in cash and not earning much, can be a cost, although “sometimes it’s good” if the economy is faltering, Harrison points out. “I would consider that part of portfolio management.” F/X spreads can be a hidden cost, too, but are “part of buying that fund.”
Private deals, such as segregated-type products and pooled funds, are typically exempt from CRM3, Harrison says. Fees related to fund layering with multiple managers can “creep up on you,” he notes. “Suddenly you’re not paying two per cent, you’re paying 3.5 per cent.”
In the alternatives space, “they’re better at not highlighting what the fees are, because it’s more exciting to talk about how much money you’re going to make,” he cautions, noting that in a private equity deal, more hands involved mean more fees. “How do you track that? You need more than a spreadsheet.”
Heavy lifting, and AI tools
Harrison suggests that AI tools such as ChatGPT and Claude could be useful in delving into a private equity deal to see what fees and costs may be embedded.
Technology offers ways for investors to get a handle on fees through consolidated reporting, reporting dashboards and alerts, Carson says. His company has started using an AI tool that can sort through offering memorandums to look at the fees in investment funds. He’d like to see standardization when it comes to naming fees, to allow for “a more apples-to-apples comparison. We’re not even close to that.”
He adds that family offices are more able than retail investors to access institutional fee classes and discounts, and they also can end up in deals that require plenty of heavy lifting. “When you’re structuring a collateralized debt portfolio with 18 different loans, there’s a lot of work in there.”
For an ultra-high-net-worth family interested in such asset classes, management and performance fees can be “the cost of entry,” Skolnik says.
“If there’s a manager who has the lowest fee, it’s not necessarily an indication that they’re the best at driving value from private companies, private businesses, taking a very hands-on operational approach and standardizing the operating systems and the marketing plan,” she says, which can be costly matters. “General partners who are really excellent want to get paid; they tend to fill up their fund offering very quickly and not offer a lot of concessions when they’re truly top-quartile.”
Skolnik cautions that one place investors can encounter significant fees in the private equity space are “hot pre-IPO company shares” that often come through solicitations—a topic that has been in the news recently. These special purpose vehicles (SPVs) can have high upfront fees and then charge performance fees, once the IPO occurs, of as much as one-third of the gains.
Sometimes the SPVs don’t even get direct access to the private company, but instead access it “through another SPV, so what an investor may actually get at IPO could be completely unimpressive and not a good use of their time and money,” she warns.
“Buyer beware, because there is the potential for a lot of layers on layers of fees, and it’s not a well-regulated space,” Skolnik says, adding that due diligence is critical in such cases. “It’s important to have a lot of good structure around the family office investment team, whether it’s in-house or outsourced.”
Mary Gooderham is a writer, editor and communication advisor based in Ottawa. She leads Cohen Gooderham Communications and has worked as a journalist for more than 40 years at The Globe and Mail, as a recording officer at the International Monetary Fund and as a custom content creator for online and print media. She’s been a contributing writer at Canadian Family Offices for four years, focusing on investment strategy, trusts, philanthropy, women in finance and estate planning.
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