Single-family offices are proving to be the preferred way the super-rich (net worth = US $500 million or more) optimize their financial and personal lives. The power of the family office model has become well recognized by wealthy individuals and families that are far from super-rich.

In a 2018 study of 264 wealthy investors, 72.7% of reported that they want the same advances single-family can provide the super-rich. Breaking this down we find that 88.9% of wealthy investors with a net worth greater than US $30 million, 80.7% of wealthy investors with a net worth between US $10 million and US $30 million and 58.5% of wealthy investors with a net worth between US $1 million and US $10 million are strongly attracted to the family office model.

Family Office Practices 
The demand for the synergistic expertise and solution-oriented approach of single-family offices is resulting in an increasing number of professionals such as wealth managers, accountants and lawyers establishing multi-family offices of family office practices. 

According to Brett Van Bortel, director of consulting services with Invesco Global Consulting, “In order for advisors to capably deliver the range of expertise the ultra-wealthy are looking for, they have to expand beyond their core services such as money management. They need to think in terms of what wealthy clients need and want—solutions instead of products. Very often this entails being able to provide services and products outside of wealth management. The way to make a multi-family office or family office practice work well is to develop and nurture an integrated planning team composed of various experts from different disciplines.”

For most advisors, putting a high-quality cohesive team together takes focus, time and often considerable effort. “Making sure you’re able to bring to a wealthy client the very best answers means you have to be working with a team of extremely talented professionals,” says Vince Annable, CEO and founder of VFO Advisory Group and author of The Household Endowment Model: Wealth Planning for Affluent Families. “Admittedly, it’s taken me a good amount of time and an awful lot of hard work to find the right set of diverse professionals who are not only very, very good at what they do but put the client’s needs and wants first and foremost and are willing and able to work as a team. Even though I have a top notch cohesive team today, I’m always looking for talented professionals who can help me deliver value to my clients.”

However, cohesive teams—while essential—are not enough to establish a high-quality multi-family office or family office practice. Critical is the ability to develop a deep understanding of wealthy clients. “A well structured discovery process is the most effective way to truly learn the self-interests of clients,” says Homer S. Smith, private wealth advisor with Konvergent Wealth Partners. “Only by asking thoughtful questions and impactfully listening are we able to learn what really matters to our clients and what’s of lesser importance. Using this approach and spending as much time as necessary, we learn their goals and objectives as well as their anxieties. With these insights we’re able to develop solutions that can deliver exceptional value.”

Today a person does not have to be super-rich to get many (not all, but many) of the financial and lifestyle benefits that were once restricted to super-rich families with single-family offices. Thanks to technology and some very clever professionals, a substantial and growing number of solutions once exclusive to the extremely wealthy are now more widely available.

For the wealthy, there is a “catch” of sorts. “Many advisors recognize the marketing power of claiming to have family office practices. A percentage of these advisors do not have cohesive teams nor do they have an effective discovery process,” says Van Bortel. “What we’re seeing is that as more and more advisors of all kinds latch onto the phrase ‘family office,’ the wealthy are become more selective when it comes to choosing a family offie practice to work with.”

For a complimentary PDF copy of The High-Functioning Single-Family Offices: A Primer for Family Members and Senior Management request the book from [email protected].