As it faces pressure from fee compression and increasing competition, the accounting industry are looking to ultra-wealthy clients and single-family offices as a source of profits.
Single-family offices can be exceptional clients for accounting firms for a number of reasons. First, single-family offices are booming and creating greater demand for the expertise accounting firms can provide. Moreover, by working with single-family offices, accounting firms create a halo effect that can be leveraged to help bring in ultra-wealthy families as clients.
As single-family offices become more high functioning, senior management and the ultra-wealthy families they work for are further inclined to strategically outsource. They tend to address a relatively small set of deliverables internally and turn to external experts for other services and products. In effect, a meaningful number of single-family offices are disaggregating, providing tremendous opportunities for accounting firms to acquire tax and compliance work.
When accounting and related services are properly positioned, the fees charged by accounting firms are not a problem for single-family offices. That is, by focusing on value as opposed to cost, and highlighting differentiated as opposed to commoditized offerings, accounting firms can be very well compensated for their services.
Single-family offices and the exceptionally wealthy families they support tend to have a multitude of needs and wants. Consequently, astute management at mid-sized and larger accounting firms can be perspicaciously positioned to address an array of issues and matters, such as technology requirements, valuation of business interests and the plethora of special projects at single-family offices.
More than ever before, single-family offices operating in various jurisdictions are looking for other firms to provide services and support to family members traveling to other countries, as well as being on the ground providing oversight of investments in those countries. Accountants are the most likely professionals to provide these services. When they do, the accounting firms are often referred to as outpost family office services.
The ultra-wealthy in general and single-family offices in particular are extremely lucrative clients for talented, capable and forward-thinking accountants. In particular, single-family offices have a wide array of professional needs and wants. They are often quite willing to pay, and pay well, for high-quality solutions and very fast responsiveness.
Russ Alan Prince, president of R.A. Prince & Associates, is a consultant to family offices, the ultra-wealthy and select professionals.