Seven of the top 10 providers of family-office services are owned by or affiliated with big banks. In addition to HSBC, the list includes Switzerland's UBS AG (No. 3), San Francisco-based Wells Fargo & Co. (No. 5) and Atlanta-based SunTrust Banks Inc., which bought 70 percent of Palm Beach Gardens, Florida-based GenSpring Family Offices LLC (No. 7) in 2001.
The amount of money managed by the 50 top firms increased 17 percent, to $477 billion, in 2010 from 2009. The number of multifamily-office firms in the U.S. has doubled in the past 10 years, according to Wheaton, Illinois-based Family Wealth Alliance LLC, which provides consulting services to the industry.
Growing Families
Banks and independent firms pursue the business because one client can beget many more as a family grows, says Anna Nichols, a managing director at the Family Office Exchange, a Chicago organization that represents 330 wealthy families.
"They can be clients for generations," Nichols says.
To make the list, the normally secretive companies had to serve more than one family and provide the amount of assets they oversee and the number of clients they serve. Those that declined weren't included.
The tussle in the business is between banks and independent firms. The boutiques say the banks are more likely to break the cardinal rule in the industry: Don't flog your products.
"The big firms have become manufacturing companies -- manufacturers of financial products," Constellation's Tramontano says.
Conflict of Interest
Pushing clients to buy shares of mutual funds or hedge funds run by a bank is a conflict of interest, says G. Randolph Webb Jr., chief executive officer of Signature, a family office in Norfolk, Virginia, with $2.2 billion of assets under management.