FA Magazine July/August 2021 - Page 26

Russ Alan Prince & Brett Van Bortel


If an advisor wants to start a multi-family office , it ’ s about more than just adding a few services .


INGLE-FAMILY OFFICES ARE POPULAR VEHICLES FOR EXtremely wealthy families , helping them with both the financial and non-financial aspects of their lives . If a family can ’ t afford its own single-family office ( or doesn ’ t want the burden of overseeing one ) they might turn instead to a multi-family office , which offers some of the same advantages . Wealthy families and individuals with a net worth of $ 10 million or more are strongly interested in receiving the benefits of such an arrangement .
And RIAs have noticed . The popularity of the multi-family office has turned the heads of registered investment advisors and other professionals ( from accountants to lawyers to insurance agents ) who are increasingly advertising themselves as having these structures themselves . Some are taking the idea seriously , but a large number of them are just adding some services ( many of them poorly outsourced ) or simply reworking their promotional materials .
If advisors really want to meet the demand of the wealthy for these shops , they must be able to deliver the array of their expertise in the context of more highly supportive relationships .
Expertise Provided By Many Single-Family Offices
Investment Management
• Discretionary investment accounts
• Private equity and venture capital investments
• Passion investments
Wealth Planning
• Income tax planning
• Estate planning
• Business succession planning
• Asset protection planning
• Charitable tax planning
• Cross-border planning
• Life management planning
Administrative Services
• Tax compliance
• Bill paying
• Financial statements
Lifestyle Services
• Concierge medicine
• Family / personal security
• Philanthropic advice
Special Projects
• Adoptions
• Island purchases
• House construction oversight
• Aircraft acquisition
Capabilities And Expertise
Traditional single-family offices tend to provide two major categories of expertise — wealth management and family support . Wealth management consists of investment management and wealth planning . Family support tends to include administrative and lifestyle services as well as special projects .
Within all these categories , there are a number of different services or products . For example , there are various ways to manage money just as there are various wealth planning specialties . Administrative and lifestyle services are also umbrella categories for numerous products and services . The term “ special project ” can mean just about anything . The sheer scope of possibilities and combinations ensures that unique and thorny issues can be addressed in new and wholly customized ways by single-family offices without deviating from the basic operating structure .
Multi-family offices can have comparable capabilities and deliver equivalent experts to wealthy families and individuals .
The Three Core Elements Of High-Performing Family Offices
RIAs that are primarily focused on investments will have to make subtle changes in their business models if they want to convert to multi-family office models . All single-family offices and multi-family offices are characterized