When I think of U.S. Secret Service agent, I picture Clint Eastwood in the 1993 movie In the Line of Fire. Eastwood played Frank Horrigan, a fictional agent who failed to stop the assassination of President John F. Kennedy in Dallas in 1963. Horrigan/Eastwood is overcome with guilt and anger. He must redeem himself. And, knowing Clint, we know he will.
Like a lot of Americans, I have a romantic notion of Secret Service agents, people who will go as far as to take a bullet for the president (as Tim McCarthy did for Ronald Reagan in 1981). But in May, I got to meet an actual agent in person at a conference for the Family Wealth Alliance in Chicago. His name was Thomas N. Kasza, and he had served in the agency for 25 years. He didn't do much to change my notion of what these people are made of (setting aside for the moment the recent scandal in Colombia).
At an opening dinner for the conference, he caught my attention with his gravitas. A middle-aged man with curly, graying hair and a dark suit (but no sunglasses, since it was the evening), he never attempted to draw attention. Yet he was a silent magnet.
Kasza has been interested in law enforcement since he was 5 years old. He joined the Secret Service when he turned 21 after graduating from Western Illinois University with a law enforcement degree. Like most successful agents, he does not consider himself to be James Bond. He is a generous, sincere, good-hearted and lovely man, someone almost fatherly-though not my father of course, because I'm old enough to be his mother. He listens to everyone and takes careful note.
He joined the Secret Service in 1983, two years after President Reagan was shot. From 1990 to 1995, he was assigned to the D.C. office where he did a brief tour protecting Reagan, George H.W. Bush and Bill Clinton. In 1995, he arranged security for the Mass in Central Park by Pope John Paul II. He even got to meet the pontiff.
"It was a thrill," says Kasza, who is Roman Catholic. "But not during the event," when security was the priority. "The Mass was on Saturday, and we got to meet him on Sunday."
What does this have to do with financial advising? More than you would think. Agents in the Secret Service, FBI and other bureaus are increasingly moving on to protect wealthy families after leaving government service. Protecting officials is similar to taking care of wealthy family members. The rich face threats to their physical, financial and cyber safety.
Two recent studies by New York firm Rothstein Kass suggest that advisors are growing more concerned about the safety of their wealthy client families. A January 2012 study showed that 80.8% of single family offices provide personal security services-background investigations, hacker-proof computer systems and protection personnel-up from 59.8% two years ago.
About 90% of family offices surveyed said they expected security threats to their clients to intensify in the future because of the poor global economy and the growing wealth gap between the rich and poor.
Rothstein Kass released another study in May 2012 called The Family Office Model: A Smart Move for the Financial Advisor? examining how traditional financial advisors are confronting the growing demand for family office services among their wealthy clients. Nearly 80% of financial advisors polled were interested in providing some level of multifamily office support. Roughly 60% said they would consider introducing family office services for select clients, while an additional 17% expressed interest in launching a comprehensive platform.
"Our latest research shows that the majority of traditional financial advisors have started to explore the benefits associated with a shift toward a family office model," says Rick Flynn, head of the Rothstein Kass Family Office Group. "These advantages can include greater client retention, enhanced revenues and improved client acquisition."
Kasza had never heard of a family office until after he left the Secret Service and became involved with one. He went to work with an asset management firm to build a security program and then got involved in the CEO's family office.
Among the common problems faced by wealthy families is the embezzlement of their money by employees, often over long periods of time. When families are alerted to these crimes, they are typically in denial, Kasza says, and reject the report. Why would somebody so close betray them? Typically, the motive is greed or the employee's feeling of entitlement or even behavioral problems. It makes it more difficult for the family to trust anyone.
In December 2011, Kasza was recruited by Hillard Heintze, a security firm based in Chicago, to serve as senior vice president and managing director of strategic relationships. The firm was founded in 2004 by Terry Hillard, who previously served as Chicago police superintendent, leading 13,500 officers, and Arnette Heintze, who has planned, designed and implemented security strategies for U.S. presidents and other world leaders.
"I've known Arnette for over 20 years, and I like them and admire their work ethic," Kasza says.