Just like anything, family offices come in all shapes and sizes. But, the ones I’ve personally dealt with do very, very well. Given the extra services they provide and the extra headaches they have to deal with, family offices typically charge a very hefty annual fee on top of the bps on household (not just what they manage) assets. Compared to an RIA with $4.2B in assets that’s charging a blended rate of about 60 bps (and generally no annual fee), the family office guy is getting crushed under your scenario for providing a much better service. That doesn’t add up.
Extremely wealthy people don’t mind paying for “concierge” service so the family office business isn’t in a race to the bottom like the general RIA marketplace. They can charge more because they provide more (and more is expected of them). It’s like wealthy people deciding to buy a Civic instead of a helicopter.
tl;dr - A family office with the same AUM as an RIA should be making way more in revenue. Probably 2-4x the revenue.