It is not unusual for the firm to be working with an entrepreneur whose investable assets go from $1 million to $25 million almost overnight after the sale of their business.
Entrepreneurs and executives have always been Pagnato and Karp’s sweet spot. The unique high-value family office practice the firm has created is a calling card for demanding business owners who appreciate the benefits of working with a deep family office team.
PagnatoKarp’s family office services are some of the most robust in the country and include asset management, financial planning, legal services, estate planning, tax planning and preparation, concierge services, family coaching and even private banking services, all under one roof.
At most firms, the luxury of family office services are reserved for ultra-high-net-worth investors with $100 million or more. PagnatoKarp has created a scalable full-service program the firm makes available to clients with advisable assets as low as $10 million, although the firm’s average client has $25 million. The firm also offers non-family office advisory services.
“This is one of the most comprehensive, in-house family office programs I’ve seen, especially at a lower net-worth level for one fee,” says Dr. Richard Orlando, PagnatoKarp’s family coach and author of Legacy: The Hidden Keys to Optimizing Your Family Wealth Decisions.
“I ran Merrill’s Global Practice Management Consulting Group and was family coach of the firm’s family office for years,” says Orlando. “I have to say PagnatoKarp’s offering is among the best I’ve seen. They don’t just bolt services on when needed.” Orlando customizes coaching programs for wealthy clients and their children based on their goals and needs. “While the firm prepares assets for clients, my job is to prepare families for their assets.”
The firm launched private trust services in July—another draw for entrepreneurs interested in legacy and multigenerational estate planning. “A lot of our clients have asked us to take on trust services,” Pagnato says. “They trust us with their assets and have their portfolios set up with us. But unless we offer private trust services, if something happens to them they may no longer be able to keep their assets with us.”
Between family coaching and the trust services, PagnatoKarp is creating strategic and critically important multigenerational relationships that will allow the firm to hang on to assets as wealth passes to younger heirs. The next generation is expected to inherit a trillion dollars by 2052, but as advisors who don’t prepare are learning the hard way, as many as 90% of heirs reject their parents’ advisors soon after receiving inheritances and some 70% of family wealth does not make it past the second generation, Orlando says.
These services thus help the firm retain clients. But “the number one thing that brings clients to our doors is they want and need a trusted relationship,” Pagnato says. The firm’s 10 “True Fiduciary” standards resonate with entrepreneurs and the handful of business executives the firm serves, especially because they go above and beyond any and all fiduciary standards that are required by law.
To develop the standards, the firm’s leaders met with clients, executives, policy experts, regulators and even sought input from Phyllis Borzi, the former assistant secretary for employee benefits security at the U.S. Department of Labor, and the creator of the department’s fiduciary standard.