Vendor Management and Outsourcing Strategy
A family office runs on its vendors. The discipline of selecting, governing, and rotating them is its own management function.
Key takeaways
- —Maintain a written vendor inventory with renewal dates and review status.
- —Anchor every relationship in a written engagement letter, not a handshake.
- —Re-bid major relationships every 5-7 years, regardless of satisfaction.
- —Evaluate vendors on more than price — service depth, conflict structure, talent stability.
A meaningful family office runs on dozens of vendors: lawyers, accountants, custodians, fund administrators, consultants, technology providers, security firms, travel managers, art appraisers. Without a vendor management practice, each relationship lives in a silo — managed by whoever started it, evaluated rarely, renegotiated never. The cost emerges as fee bloat, drifting service standards, and concentration with vendors that no longer feel they need to compete.
Working vendor management is light-touch but disciplined. The office maintains a vendor inventory: who, for what, since when, on what terms, reviewed when. Engagement letters are written, not handshake. Major relationships go through a re-bid every five to seven years even when satisfaction is high — the act of running the bid is what keeps the incumbent honest. Selection criteria look beyond price: service depth, conflict structure, talent stability at the firm, and willingness to engage on real strategic questions.
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