Back in the early '90s when he was working in a traditional financial-planning firm outside of Boston, Dave Beaty found himself asking the question Peggy Lee once posed in her song, "Is that all there is?"

Beaty's practice at that time revolved around traditional functions, like retirement planning, monitoring investments, tax strategies and estate planning. A handful of wealthy clients were already looking for more complex services, and that challenge appealed immensely to him.

In 1995, Beaty struck out on his own and launched Tanager Financial Services, with an eye toward creating a firm that would offer a broader, more sophisticated array of services than most advisors could have imagined at that time. Between 1986 and 1992, Beaty, a certified public accountant, had served as an advisor in the personal financial-planning division of Price Water-house and consulted with some successful clients about taxes, investment management and estate-planning issues. Like many advisors at giant accounting firms in that era, he was frustrated by restrictions on his ability to help clients implement their financial plans.

When he established Waltham, Mass.-based Tanager, Beaty conceived a firm that would offer family office-style services (usually available only to ultra-wealthy individuals with more than $100 million) to the merely affluent. The idea behind the multiclient family office is that families who don't have the quarter of a billion or so it takes to justify hiring a complete staff of advisors, accountants and attorneys can pool their resources with other families and, in effect, rent them. Though Beaty wasn't banking on the last five years of the millennium spawning the amount of wealth that it did, he created a firm that now stands as one model for advisors targeting the affluent looking to upgrade their service offerings.

As financial-services giants and others seek to commoditize traditional functions of personal finance, many leading advisors who aren't embracing the multiclient, family office prototype completely are studying it and deciding what new services they need to add to sharpen and differentiate their competitive position. Some are going a step further. In Albuquerque, N.M., Universal Advis-ory Services' Joe Kopcynski is leveraging his business-consulting expertise to build much deeper relationships with clients than most advisors enjoy in a family office environment. A former financial executive at a major conglomerate, Kopcynski initially built his firm around providing consulting advice to physicians, helping them negotiate with landlords, health maintenance organizations and others. In recent years, however, he has landed several successful family business clients and used his expertise to advise them on questions of both business and personal finance.

Other firms, like Charles D. Haines in Birmingham, Ala., and The Evensky Group in Coral Gables, Fla., are raising capital to build large family office networks, albeit with very different models and target markets. "When someone like Harold Evensky, who practically coined and branded the term 'wealth management,' starts going towards more comprehensive financial planning, that is a strong signal that the wealth-management strategy may not be the strategy of the future," Haines notes. He believes the days of independent advisors "doing financial planning and flipping mutual funds" are waning. "It's not a profitable business strategy; it's a harvesting strategy. Some clients will leave you over time," he explains.

What sets Tanager apart is that it is much farther down the road than most advisory firms in attempting to meld at least some family office services into their firms. It employs about 27 people and oversees $2 billion in assets for about 100 clients. Impressive as those numbers might sound, they don't tell the real story of what the firm actually does.

Tanager's roster of professionals includes four attorneys, six CPAs, several CFP licensees and one chartered financial analyst. What differentiates the firm's advisors from others is their level of involvement in their clients' financial lives. Many Tanager clients have issues resulting from their wealth that inherently require more services-about 15 of its clients have more than $50 million in assets. Outlandish though it may sound to many advisors, the firm has experts in such arcane areas as the staffing, maintenance and purchase-versus-lease-versus-charter decisions for their clients' private planes.

But the holistic nature of Tanager's approach, when combined with the complications of individual clients' situations, translates into a different dimension of advice. "If someone has $50 million or $100 million, three law firms and 10 different advisors in all, what they need is someone to pull things together," Beaty explains. At Universal, Kopcynski hired his first CPA in 1994 because he was tired of chasing clients' accountants, and most of his clients were tired of getting multiple responses from their battery of accountants and attorneys. "The average affluent investor has seven to 14 different financial relationships," says Deena Katz, executive vice president of The Evensky Group. "What they want is the ability to trust someone to outsource and aggregate it."

Like many fee-only financial-advisory firms, both Tanager and Universal base client fees partly on the assets they oversee. Unlike most other firms, however, the rest of their fees are based on the scope and depth of their engagements, which typically are independent of the clients' wealth. If Tanager is working with three or four generations of one family while administering a foundation and numerous trusts, the engagement is likely to be more far more complex than if it is advising one couple with no children and their entire net worth invested in liquid financial assets.

Ultimately, Tanager's flat-fee structure is based on both the amount of assets and the amount of work it expects to perform. "Fees typically range from 20 to 50 basis points of the family's net worth," Beaty says. "We don't have a specific schedule to review fees, and we rarely bill for special one-time events. But if they start a foundation and the relationship looks like it is going to get a lot more complex, there can be adjustments."

On the surface, Tanager's list of services-investments, trusts and estates, philanthropy and other fiduciary services, income taxes, managing cash flow, paying bills, family counseling and risk management (which goes well beyond insurance)-sounds only a little more extensive than what other firms catering to the affluent provide. Some so-called wealth-management firms are beginning to introduce bill paying and cash-flow management. But the way Tanager views the value it adds to clients' financial lives and tailors its services accordingly is what really differentiates it. "Each client wants a different basket of services," Beaty explains. "Our job is to pull together all the pieces of their financial lives and make it as seamless as possible."

In many areas, Tanager becomes much more involved than most wealth-management firms do. On the investment front, however, Tanager plays a more detached role. The result is that clients rarely equate the firm's ability to deliver value with investment performance, an outcome other advisors have found difficult to achieve. "We manage the managers, and it makes us more objective," Beaty says. "We wanted to take as many conflicts of interest out of the relationship as possible."

In other words, clients can have their money with a Bessemer Trust or U.S. Trust and still be heavily reliant on Tanager. "The more money a client has, the less likely you are to get all of it," confirms Haines.

At a time when some advisors are questioning whether they can use mutual funds for clients with $2 million to $5 million in assets, Tanager is still placing individuals with more than $50 million in funds. The firm finds this works particularly well for asset classes like international equities and emerging markets because high-quality separate accounts are in short supply. But the firm's scale and client asset base also permit it to develop innovative investment vehicles for clients. For example, several years ago, Tanager approached State Street Global Advisors about creating low-cost, passively managed separate accounts for clients, and the giant investment-management firm agreed to do so. The firm worked with State Street to structure these portfolios so clients could diversify low-basis equity positions, harvest losses and screen out certain investments that clients wished to avoid for social, political or other personal reasons.

Probably the most complex cases Tanager has wrestled with involve estate-planning issues. On occasion, the firm has implemented estate-freeze transactions on behalf of clients. Additionally, it has employed sophisticated strategies using derivatives to diversify clients out of low-basis stocks.

Still, Beaty maintains that the biggest challenge facing his firm, like most advisory practices, is managing the client relationship. Providing judgment when called upon and working with other advisors that clients retain also pose perplexing problems, particularly if another advisor has made a mistake.

"You must be respectful of their other attorneys and advisors," Beaty notes. "You may disagree with them, but you want to make them look good in the client's eyes." That's especially problematic, because if two advisors expend a lot of effort trying to out-point each other, it often ends up poisoning the relationship for both and leaving the client in the dark.

Taking the high road may be the best approach, but it doesn't work so easily if other advisors refuse to cooperate. With one client, Kopcynski shares asset-management responsibilities with another firm, whose principals aren't thrilled about the situation. Reconciling "our consolidated statements isn't as easy as it should be," he notes.

Frequently, the dilemmas that confront multiclient family offices boil down to defining the appropriate boundaries of a relationship. Determining these boundaries-and when an advisor crosses the line from providing advice to becoming an actual participant in the client's family affair-is a far more difficult task than one might think. "It's a bit like risk tolerance," Beaty explains. "You can't tell a client whether they are conservative or aggressive. It's a value question where the client must make the choice. But once they determine what they are, say, conservative, you can outline several options and make certain recommendations."

Late last year, Tanager was in the process of hiring a family wealth consultant to work on some of the psychological issues that arise among its clients. Among the issues that Tanager's in-house psychologist will address are the sensitive topic of business succession, the clarification of shared family values and the thorny task of how to discuss wealth issues in a family setting. "We realized this was necessary if we really wanted to help families communicate about issues involving wealth and not just pay lip service to it," Beaty explains. "We work on these issues with clients, but there are different skills and boundaries, and we're still learning."

To address the issue of family dynamics, Haines hired Marty Carter, a nationally recognized clinical social worker, in July 1999. "Our strong suit is in the emotional dimension to money," Haines says. The Evensky Group is looking to hire a similar professional, as well as a business consultant with skills similar to Kopcynski's.

Although the superaffluent may have a different set of financial problems from most people, they face emotional issues that aren't so different. Kopcynski relates the case of a family that sold a company for $60 million and started worrying almost immediately, even though they stayed on at their company. "They end up working in a hollow environment. They become statues, and it kills their pysche," he explains. "What comes along is all these personal and emotional issues they never faced before."

Typically in these situations, the client wants to jump right back into a new business. "We counsel patience," Kopcynski says. "When you have patience and money, it's a winning combination. But it's also a maturity thing."

Knowing when to stand up to a client when they disagree with their advisor and when to step aside can put a firm's professionals in a quandary, Beaty notes. On the one hand, Tanager serves as a fiduciary and has a set of attendant responsibilities that may limit its choices. On the other hand, it's the client's money and the client's business.

Professionals at firms like Tanager view their clients as a family and, in a few cases, provide advice to four generations. But it's also quite common when some members want to go their own way and use other advisors, often for noneconomic issues of privacy. Kopcynski relates a situation where a son-in-law of a large family office client was sensitive about keeping certain information confidential and his firm honored the request for privacy.

Just as success often begets more success, Tanager and Universal have realized a quantum leap forward in the type of clients attracted to their practices since they migrated towards the family office model and expanded into new services. Both firms have enjoyed considerable success in recent years marketing their services to clients with more than $25 million. While some advisors undoubtedly would take umbrage at the elitism inherent in such a marketing strategy, it's doubtful they would blame themselves or colleagues for favoring prospects with, say, $300,000 in investable assets over those with $30,000. What makes the family office model so compelling is advisors are competing on service quality, not sales skills or investment performance and, in the process, are building client relationships that can withstand powerful stress tests.