The short list of services wanted by single family and multifamily offices are estate planning, high-level tax work, high-end insurance and credit/cash management, says Julie Harrington, director at Pershing Advisor Solutions. She adds that family offices also want lending services, such as bill payment and international wires. Family executives also turn to firms such as Pershing for research on money managers, Harrington explains. Increasingly, family offices are subcontracting these services to the wealth management units of big national firms such as Pershing, Fidelity, Charles Schwab & Co. and State Street, among others.
It's often difficult for family offices to retain staff knowledgeable about all the products and services that the well-heeled want, which is another reason to outsource. But beyond keeping clients happy, they also want to expand the services they can offer, and that gives them more incentive to look outside.
The multifamily office usually starts out as a single-family office. After garnering a fair amount of success, it will stretch its focus, say financial advisors. Besides managing money for the immediate family, the office will start handling the financial and personal affairs of aunts and uncles, too. Then family friends may be included. After that, friends of friends will get service. Finally, the firm reaches a tipping point. The business, like its clients, will have unique needs.
"These offices now need help with business development and marketing," says Janelle Sallenave, vice president in advisor services for Charles Schwab & Co. "They will need help with referrals or what we call 'quiet business development.'"
Sallenave agrees that family offices also need more professional help because the revenues they generate and the assets they manage are shrinking.
"Family offices now want their people trained in expense management," she notes. "They also are looking for seminars in productivity, which we are offering our advisor clients."
Obviously, one problem is that it can be expensive and time consuming to have every kind of expert on the payroll to handle the wide range of requests that family office heads receive. The wealthy often seek personal services that many advisors either have no inclination to deliver or are incapable of providing.
These services might be reservations at the best restaurant in Paris, hard-to-get tickets to Broadway shows or celebrity access. Keeping clients happy with these types of services sometimes means family offices need the help of more than a wealth manager. They might need the help of a boutique firm.
Kathy Reilly, chief executive officer of Luxury Attache, a New York-based global personal concierge service that works with big wealth managers servicing family offices, says her business is booming. And even a sour market hasn't slowed down the demand for what her company offers.
"We increasingly see a demand for these personal services," she says. "We recently had a client who worked on the Darfur relief project. The client wanted a personal letter from a big celebrity thanking the client for working on it. We were able to get that letter for the client."