# Operating Expense Build-up — Realistic Swiss EAM Cost Base (corrected model: no founder direct books)

> **Status:** v1 (2026-10-09). Answers: "are those opex numbers realistic, what do they include, and what happens with founder salaries in the lean years?" All-revenue-RM-sourced model; cash 50% / pool 30%-of-retained / founders residual.
> Cross-check basis: launch plan §8B/§6N cost bands, §6G/§6H provider costs; research-rm-psychology (median EAM 3.3 staff / CHF 140m); Swiss EAM cost ratios typically 40–80bp of AUM ALL-IN — but that includes custody/transaction costs charged by custodian banks, which are client-paid pass-throughs in our retro-free model, NOT in our opex. Our opex is the firm's own cost base only.

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## The four stages

### Stage 1 — Launch (RM books CHF 250M, founders no-salary)

| Item | CHF/yr | Basis |
|---|---:|---|
| Founder salaries | 0 | Mandate agreements, CHF 0 (launch plan §6I structure); voluntary AHV below |
| External compliance/AML/risk (SwissComply-type) | 18k | §6H band 10–25k |
| Part-time qualified manager (QM#2 board fee) | 15k | §6G band 10–25k |
| Voluntary AHV (both founders) | 15k | §6I |
| SO supervision + statutory audit | 12k | §6N bands |
| Office (small + meeting facilities) | 12k | lean end of 12–36k band |
| IT/PMS/data feeds | 18k | §6N 10–30k |
| Lawyers ongoing | 8k | lean of 5–20k |
| Insurance (PI + liability) | 6k | §6N |
| Accounting/tax | 6k | |
| FINMA levy + misc regulatory | 6k | |
| **Total** | **~116k** | **= 5bp of AUM** |

**Founders' residual: CHF 700k (~350k each)** — 30% of revenue. (This is the year-1/2 picture IF the founding RMs bring CHF 250M in the first 18 months; before that, revenue is lower and the founders genuinely run on savings — the launch-plan break-even analysis covers this.)

### Stage 2 — Growth (RM books CHF 600M; founders take salaries)

| Item | CHF/yr | Notes |
|---|---:|---|
| Founder salaries | 270k | PM 150k + COO 120k — deliberately below market (market: 250–400k PM) |
| Ops/onboarding assistant (60–80%) | 60k | brother-track or first hire: onboarding, reporting, custodian coordination |
| External compliance/AML | 25k | scope grows with client count |
| Part-time QM#2 | 20k | |
| SO + audit | 18k | |
| Office (proper) | 24k | |
| IT/PMS/data | 25k | |
| Lawyers | 12k | client agreements, custodian contracts, RM contracts |
| Insurance | 8k | |
| Regulatory + misc | 8k | |
| Accounting/tax | 8k | |
| Marketing/website/content | 10k | |
| **Total** | **~488k** | **= 8bp of AUM** |

**Founders' residual: CHF 1.47M (~730k each) after their own salaries** — i.e. total founder take-home equivalent ~CHF 860–890k each (salary + residual share). 26% of revenue.

### Stage 3 — Established (CHF 1.2B)

| Item | CHF/yr |
|---|---:|
| Founder salaries (market) | 350k |
| Ops + assistant(s) (1.5 FTE) | 180k |
| Junior PM/analyst | 100k |
| External compliance | 35k |
| QM#2 | 25k |
| SO + audit | 25k |
| Office | 30k |
| IT/PMS/data | 35k |
| Lawyers | 15k |
| Insurance | 10k |
| Regulatory + misc | 10k |
| Accounting/tax | 10k |
| Marketing | 15k |
| **Total** | **~840k** = **7bp** |

**Founders' residual: CHF 3.07M (~1.5M each after salaries).** 27% of revenue.

### Stage 4 — Target (CHF 4B)

| Item | CHF/yr |
|---|---:|
| Founder salaries | 450k |
| Staff (5–6 FTE: ops ×2, assistant, junior PM ×1–2, internal compliance) | 600k |
| External compliance (now 2nd-line review only) | 20k |
| Board/QM fees (real board by now) | 40k |
| SO + audit | 40k |
| Office (10–12 seats) | 60k |
| IT/PMS (institutional stack) | 60k |
| Lawyers | 25k |
| Insurance | 15k |
| Regulatory + misc | 12k |
| Accounting/tax | 15k |
| Marketing | 20k |
| **Total** | **~1.36M** = **3bp** |

**Founders' residual: CHF 11.7M (~5.8M each after salaries).** 31% of revenue.

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## The key structural observations

1. **Opex never exceeds 9% of revenue (8bp of AUM)** at realistic staffing. The "extreme opex" scare case from the last review (CHF 13M at 4B) would require a ~50-person organization — a deliberate choice to build an institution, not an accident. Under THIS structure the founders control that decision with 100% of votes, and the exit formula makes overspending cost the RMs' wealth too — the alignment mechanism.
2. **The founders' residual is remarkably stable at 26–31% of gross revenue** across all stages once salaries start. The 50/30 structure self-normalizes: RM cash + pool consume a fixed 65%, opex is small and controllable, so the residual floor (~35% of gross before opex) is structurally protected — this was your concern, and the answer is that opex at realistic Swiss-EAM staffing levels never comes close to consuming it.
3. **Founder salaries in the lean years:** Stage 1 has none (residual ~350k each is their compensation — taken as dividends, no AHV/pension but low tax). The trigger to start salaries (Stage 2) is roughly CHF 500–600M RM books / residual above ~CHF 1M. Before that, the voluntary AHV + savings plan from the launch plan §6I applies. Optionally, a modest CHF 80–100k founder salary could start earlier — it's an expense, reduces residual, does NOT touch the RM pool (insulated by design).
4. **What's NOT in these numbers:** custodian bank custody/transaction fees (client-paid pass-through, retro-free model), VAT on fees (billed on top), one-time launch costs (CHF 75–165k, launch plan §8A — incorporation, FINMA application, legal setup, IT one-time), and the founders' own tax burden. These numbers are the firm's recurring P&L opex only.
5. **Staffing trajectory** (the real cost driver): 0 FTE hires (stage 1, founders + brother do everything, external compliance) → 1 hire (stage 2) → 2.5 FTE (stage 3) → 5–6 FTE (stage 4). Median Swiss EAM is 3.3 staff on CHF 140M — our stage-2/3 staffing is *leaner than the median EAM per AUM*, consistent with the "modern systems" positioning (the AM database + automation is what makes 600M–1.2B manageable with ~3 people).
6. **The business-plan implication:** FINMA wants a 3-year P&L (launch plan §4A). These staged numbers ARE that plan's cost side: Y1 ~116k (no salaries, books ramping), Y2 ~250–350k (salaries start mid-year, first hire), Y3 ~500k. Revenue at the plan's RM ramp (250M → 600M → 1.2B by Y3–Y4 if founding RM books land per the income-table follow-rate scenarios) covers costs from the first material book — the break-even is earlier than the launch plan's conservative 0.8%-fee/24M-AUM case because the actual fee schedule blends higher (~93bp) and opex is leaner than the launch plan's conservative band assumed.