Still, it may not be cost-effective to provide services for clients who are low on the wealth scale. "There is always that cost-benefit question," Tibergien says. "He may be right, but the big question is what's the cost to the client, and if it's too low, what's the profit margin in it for the advisor?"
James Whiddon, president and CEO of J.W.A. Financial Group Inc. in Dallas, became the coordinator of FamilyOfficeNetwork's local network in Dallas a little over a year ago. Before setting up the network, Whiddon says his firm was considering transitioning to a family office by hiring staff over the course of the next five years. The network, he says, allowed a cheaper and faster way to roll out the service. "This gives us the freedom to use other professionals without making the firm, deeper commitment" of hiring someone, Whiddon says.
The local network in Dallas has signed on four members since it started, with two others currently evaluating it, he says. About 15 to 20 of the firm's 75 clients have used the members, who now include attorneys and CPAs.
Whiddon says he wants the network to grow to at least 25 to 30 members and to eventually include other advisors who have specialty practices. "We're looking primarily for financial advisors who don't do what we do-niche advisors," he says.
The network that is furthest along is Wheeler's in San Diego. It includes a dozen members, including a local Mercedes/Porsche automobile dealer-
ship. Wheeler says he wants the network to have 50 advisors by the end of 2003.
He estimates the network is servicing 60 clients. He cited as one example an elderly couple who, with Wheeler's help, selected an estate attorney, provided him with all the data needed for wills and trusts, and received draft copies of the documents-all online.
A CPA who is part of the San Diego network, Ed Blitz, president of Blitz, Lee & Co. in Mission Valley, Calif., says the network whittles down to minutes document exchanges that normally can take days. If Blitz needs a client's capital gains and losses, for example, he used to have to phone in the request to Wheeler's office, wait for them to retrieve the information, then wait for it by fax or mail. With the network, Blitz says, the information is at his fingertips.
Likewise, if an attorney needs a client tax return, Blitz can upload it to the network Web site, where the attorney can download it in minutes. "Various things come up during the year where we need certain information, says Blitz. "This makes it really convenient."
Wheeler says the origin of the network goes back to 1997, when California passed legislation giving CPAs the ability to get into the investment and insurance businesses. To Wheeler, it was a signal that competition and client demand were inevitably pointing the advisory industry toward one-stop comprehensive wealth management services.