Auditing Your Existing Setup

Part of Running a Family Office Under $100M

Maybe you've had money for a while. Maybe your exit was three years ago, or seven, and you've built something that sort of works. Advisors you've assembled over time. Some structure. Investments scattered across accounts and funds. It functions. Bills get paid. Nothing's on fire.

But is it actually working?

Situations drift. What made sense at £8M might not fit at £25M. The advisor who was perfect when you had simple needs might now be out of their depth. Structures that served a purpose five years ago might be costing you without benefit. Fees accumulate in places you've stopped looking.

Most founders don't audit what they have. They built it, it runs, and they move on to other things. But wealth infrastructure needs maintenance like anything else. Relationships go stale. Circumstances change. What was once optimised becomes gradually suboptimal.

This post is about stepping back and evaluating. Not to blow everything up—sometimes the answer is "this is working fine." But to know, rather than assume.

Why Bother?

The cost of not auditing is invisible until it becomes obvious.

A founder I know ran the same setup for six years after his exit. Same wealth manager, same structure, same everything. Seemed fine. Then he actually looked at his all-in costs and realised he was paying 2.1% annually across everything. On £18M, that's nearly £380K per year. Some of it was justified. A lot of it wasn't—fees layered on fees, services he didn't use, complexity that served no purpose.

He could have caught this in year two if he'd looked. Instead, he bled maybe £600K in unnecessary costs over the years he wasn't paying attention.

Another founder discovered her estate documents still referenced her ex-husband as the primary beneficiary. Divorce was four years ago. Nobody had updated anything. If something had happened to her, the assets would have gone exactly where she didn't want them. This isn't unusual—beneficiary designations on retirement accounts and life insurance policies often supersede the terms in a will, and failing to update these after divorce can result in an ex-spouse receiving benefits against your explicit wishes. In many jurisdictions, automatic revocation applies only to wills, not to non-probate assets such as pensions or life insurance.

These aren't dramatic failures. They are a drift. The slow accumulation of suboptimality that happens when nobody's looking. Only 24-32% of adults have estate planning documents in place, and of those who do, roughly 20% haven't updated them in the last five years. Among high-net-worth individuals, the numbers are better, but the stakes are higher.

An audit doesn't have to be complicated. It's not hiring consultants and producing a hundred-page report. It's taking a day, maybe two, to look at each piece of what you have and ask: is this still right?

Structure: Still Fit for Purpose?

Start with how assets are held. The entities, the jurisdictions, the arrangements.

When you set this up—whether recently or years ago—it reflected a certain situation. Your wealth level, your residency, your family circumstances, your plans. How much of that has changed?

Signs your structure might be under-built:

You've grown significantly, but everything's still in the simple setup from when you had a third of what you have now. No holding company, or a basic one that hasn't evolved. Assets are still largely in the personal name. The estate planning is whatever you did initially and hasn't been revisited.

This isn't automatically wrong. Simple can be right. But at some point, simple becomes inadequate. If you're at £25M with the structure you had at £8M, it's worth asking whether you've outgrown it.

Signs your structure might be over-built:

You're paying £50K+ annually to maintain entities that don't serve clear purposes. There's an offshore element that seemed sophisticated but doesn't actually provide any benefit, given your UK residency. Multiple trusts and structures that were set up because an advisor recommended them, but you couldn't explain what problem they solve.

Over-complexity is expensive in direct costs and in cognitive overhead. Every entity needs compliance, filings, maintenance. If you can't articulate why something exists, it might not need to.

Questions to bring to your tax advisor:

Does this structure still make sense given where I am now? What would you recommend if we were starting fresh? Are there entities we should consolidate or eliminate? Are there structures we should add, given how things have evolved? What's actually saving me money versus what's just complexity?

A good advisor will welcome this conversation. A defensive one might be protecting their billing.

Team: Are These Still the Right People?

This one's uncomfortable. You have relationships with your advisors. Some go back years. There's loyalty, familiarity, maybe genuine friendship.

But loyalty shouldn't mean accepting subpar service.

Advisors drift too. The tax advisor who was hungry and attentive when you were their biggest client might have grown their practice, and now you're a small fish. The wealth manager who was innovative five years ago might be coasting. The estate solicitor who did solid work may have stopped keeping up with changes in the law.

Signs an advisor relationship has drifted:

You mostly hear from them when invoices are due, not with proactive ideas. They're slow to respond—days, not hours, for routine questions. You've brought up issues or questions that got vague answers or clear discomfort. The junior person who handles your account keeps changing. They haven't suggested anything new in years. When your situation changed, they didn't initiate a conversation about implications.

None of these is damning on its own. But a pattern suggests the relationship isn't what it should be.

The harder question is whether your advisors have outgrown. The accountant who was great for your startup might not have the expertise for complex personal tax planning. The local solicitor who prepared your first will might not be equipped to handle multi-jurisdictional estate planning. They're not bad at what they do—your needs have just exceeded what they offer.

This is where loyalty becomes tricky. You don't want to dump someone who's served you well. But you also can't let sentiment drive decisions that affect millions of pounds over the course of decades.

One approach: have an honest conversation. "My situation has gotten more complex. Is this still in your wheelhouse, or should I be working with someone who specialises in this?" A good advisor will be honest about their limits. Some will even help you find the right specialist and stay involved in areas where they add value.

If you're uncertain about an advisor, get a second opinion. Not to switch necessarily—just to calibrate. Talk to another tax advisor about your structure. Get a different wealth manager's view on your portfolio. If the second opinion confirms you're well-served, great. If it reveals gaps you didn't know about, that's valuable information.

Costs: What Are You Actually Paying?

This is the audit most founders avoid. Because they don't want to know.

Your all-in cost is everything you pay across your entire wealth setup. Wealth management fees, fund expense ratios, fund manager fees (2 and 20 on alternatives), transaction costs, custody fees, banking fees, FX spreads, tax advisor fees, legal fees, entity maintenance costs, insurance premiums—all of it.

Most founders know some of these numbers. Few know the total.

How to calculate it:

Start with explicit fees. What does your wealth manager charge? UK wealth management fees typically range from 1% to 1.5% of AUM annually, with the median around 1%. Find your exact number. What do you pay your tax advisor annually? Your accountant? Your solicitors for ongoing work? Entity maintenance and registered agents?

Add fund costs. Every fund you're in has an expense ratio. For index funds and ETFs, these have fallen dramatically—Morningstar's 2024 US Fund Fee Study shows asset-weighted average expense ratios of just 0.11% for passive funds and 0.34% across all US mutual funds and ETFs. Actively managed equity funds average around 0.60%. UK equivalents are similar. For PE and hedge funds, there's typically a management fee of 1.5-2% plus carried interest of 15-20% of profits above a hurdle rate (usually 8%). According to Callan's 2024 Private Equity Fees and Terms Study, buyout funds averaged 1.74% management fees, and venture capital funds averaged closer to 2.5%. You might not see these as line items—they're deducted before you see returns—but you're paying them.

Add transactional costs. Trading commissions, if any. FX spreads on currency conversions. Bid-ask spreads on less liquid investments. These don't show up as fees, but they're real costs.

Add it all up. Express it as a percentage of your total assets.

What's reasonable? Depends on what you're getting. But as a rough guide:

If you're at 0.5-0.8% all-in and mostly in index funds with a simple structure, that's lean. If you're at 1.0-1.5% and getting real wealth planning, coordination, alternatives access, and genuine service, that's arguably fair. If you're at 2.0%+ and you're not sure what you're getting for it, something's wrong.

The founder I mentioned earlier discovered he was at 2.1%. When he dug in, here's what he found: wealth manager fee of 0.85%, underlying fund costs averaging 0.55%, one PE fund with 2% management fee dragging up the average, tax and legal running another 0.3%, and various small costs adding 0.2%. Each line seemed defensible in isolation. The total wasn't.

He didn't fire everyone. He renegotiated the wealth manager fee (got 15 basis points off), moved some holdings to lower-cost equivalents, and decided one of the PE commitments wasn't worth making again. Brought total costs down to about 1.5%. Still not cheap, but he could justify what he was paying.

You can't refine what you don't measure. Do the audit.

Portfolio: Is It Doing What You Designed?

Beyond costs, is your portfolio actually reflecting your intentions?

Allocation drift happens naturally. You set targets—say 60% equities, 25% bonds, 15% alternatives. Then equities run for a few years, you add some PE commitments, you don't rebalance consistently. Three years later, you're at 70% equities, 12% bonds, 18% alternatives, with most of that illiquid. The portfolio you have isn't the portfolio you designed.

Check your current allocation against your targets. If you have an Investment Policy Statement, pull it out. Does reality match intention?

Concentration risk creeps in. A single position grows to become an outsized part of your portfolio. You added several investments in the same sector because that's what you know. Your alternatives are all led by managers with similar strategies. Diversification on paper isn't diversification in practice.

Look at your actual exposures. Not just what you own, but what factors drive those holdings. Are you more concentrated than you realised?

Illiquidity creep is the one that catches founders most often. I've talked about this elsewhere, but it's worth checking specifically. Add up everything that's illiquid or has restricted liquidity—PE funds, VC, real estate syndications, lockup periods on hedge funds, any position you couldn't sell within a week.

Include unfunded commitments. If you've committed £500K to a PE fund and only £200K has been called, you still have £300K of future illiquidity.

What percentage of your total wealth is illiquid or committed? If it's over 40-50%, think carefully about whether that's intentional. If it's over 60%, you might have a problem you don't know about yet—the next downturn will reveal it when you need liquidity and don't have it.

Performance review goes beyond returns. Yes, look at how you're doing relative to benchmarks. But also ask:

Did the portfolio behave the way I expected during the last downturn? Did the diversification I thought I had actually provide diversification? Are the alternatives I'm paying premium fees for actually delivering premium returns? Is anything significantly underperforming its category?

Returns alone don't tell the full story. How you got those returns—and what risks you took—matters.

Protection: Gaps You've Stopped Seeing

This is the audit people defer until something goes wrong.

Insurance. When did you last review coverage with an independent broker? Not the renewal conversation where you just sign again—an actual review. Has your net worth grown faster than your coverage? Is your umbrella liability adequate? Do you have proper coverage on properties, including any you've added? If you're on boards, do you have D&O coverage?

Most founders are underinsured relative to their wealth because insurance doesn't automatically scale. The coverage you had at £5M might be dangerously inadequate at £20M. Wealthy individuals are attractive targets for liability claims—a £1.5M settlement from a serious accident can quickly exhaust a standard policy limit. The general guidance is umbrella coverage at least equal to your total net worth. For £1M of personal liability umbrella coverage, premiums typically run £150-£300 annually, with each additional million costing proportionally less. It's one of the cheapest forms of protection relative to the risk covered.

Cybersecurity. Do you have hardware security keys on your primary email and financial accounts? Is there a separate email for financial accounts? Do you have verbal confirmation protocols for large transfers? SIM lock with your carrier?

If the answer to any of these is no, you have a gap that could cost you everything. The UK's National Fraud Database recorded a 1,055% increase in SIM-swap fraud in 2024—from just 289 cases in 2023 to nearly 3,000 cases. Once criminals hijack your phone number, they can intercept two-factor authentication codes and gain access to bank accounts, email, and investment platforms. Deloitte's 2024 Family Office Cybersecurity Report found that 43% of surveyed family offices had experienced a cyberattack in the prior two years. Mobile phone accounts accounted for 48% of all account takeover cases in 2024.

Estate documents. When were they last updated? Do they reflect your current assets, relationships, and wishes? If you've had major life changes—marriage, divorce, children, significant changes in wealth–since the documents were created, they probably need updating.

The standard guidance is to review estate documents every three to five years, or immediately after any major life event. Beneficiary designations on retirement accounts and life insurance policies supersede your will—if you haven't updated these after a divorce, your ex-spouse could still inherit those assets regardless of what your will says. Only 46% of named executors are even aware they've been designated.

Does anyone else know where everything is? Is there a master document your spouse or executor could use to find all your accounts, entities, and investments? Over half of adults don't know where their parents store their estate planning documents. If you're the only person who knows the full picture, that's a gap.

Succession readiness. If something happened to you tomorrow, could someone step in and manage your financial life? Not perfectly—but functionally? Who would that be? Do they know they're that person? Do they have what they'd need?

Protection gaps are invisible right up until they're catastrophic. The audit takes a few hours. The cost of not doing it can be everything.

What to Do With Findings

So you've audited. You've found some things. Now what?

First, don't panic. Most audits reveal suboptimalities, not disasters. Finding problems is the point—better to find them than not to look.

Triage by impact and urgency.

Some things need immediate action. Protection gaps—insurance, cybersecurity, estate documents—fall here. The cost of delay is a potential catastrophe. Fix these now, even if imperfectly.

Some things are high impact but not urgent. Excess costs, advisor relationships that have drifted, a structure that no longer fits. These matters a lot over time, but won't hurt you next month. Plan a transition, do it properly, don't rush.

Some things are refinement opportunities. Portfolio adjustments, fee negotiations, and minor structural improvements. Worth doing, but not urgent. Put them on a list, tackle when you have bandwidth.

Changing advisors gracefully. If the audit reveals you need different advisors, handle the transition professionally. Give reasonable notice. Don't blame or complain—"my needs have evolved" is sufficient explanation. Get your documents and information before severing. Don't burn bridges. The world is small.

Set a recurring reminder. An audit isn't a one-time thing. Annual review of the basics, deeper review every 2-3 years. Put it on your calendar. Make it part of how you manage wealth, not a special project.

Mindset Shift

Most founders audit their businesses regularly. Board meetings, financial reviews, strategic assessments. It's obvious that a company needs ongoing attention.

Wealth management somehow feels different. You set it up, it runs, you assume it's fine. But the same drift that would hurt a business hurts your wealth infrastructure. Just slower, quieter, less visibly.

Think of the audit as maintenance, not criticism. You're not looking for reasons to blow things up. You're looking for drift, gaps, opportunities. Often, the answer is "this is basically working, with a few tweaks needed." That's a good outcome.

And if the answer is "this needs significant changes", it's better to know that now than to discover it during a crisis when your options are limited.

Take a day. Look at what you have. Ask whether it's still serving you.

You might be surprised by what you find.

Playbook Hub: Running a Family Office Under $100M

Related guides:

• The First 90 Days After Exit
• Pre-Exit Wealth Planning
• Minimum Viable Setup
• The One-Page Framework