About four out of five ultra-wealthy investors are looking for state-of-the-art solutions and see multifamily offices as the best provider of exceptional services and products.
The Multifamily Office Model
In principal, just about any financial advisor can create and manage a multifamily office practice. The majority of multifamily offices, like single-family offices, outsource services and products that are not their core expertise to other professionals and providers.
In building a multifamily office practice, it’s important for financial advisors to have a firm grasp of what they and their firms do well and what expertise needs to be gleaned from outside their companies. The list of wants is overlaid on what the ultra-wealthy want, and the gaps are filled by external experts.
To construct a high-caliber multifamily office practice, financial advisors usually have to be able to do the following things:
Capably profile the ultra-wealthy: Being able to develop a comprehensive understanding of ultra-wealthy investors is a necessity. They need more than the perspectives required for portfolio management.
Build alliances with diverse resources and manage these relationships: Think of a multifamily office as a synergistic collection of specialized services, some of them that financial advisors may outsource.
The relationships with outside specialists are best if they are very well structured and established way ahead of when their expertise is needed. Advisors also need to ensure that the various specialists are able to work effectively as a team.
Manage the relationships with the ultra-wealthy client: There are no handoffs in the multifamily office model. Whether the experts are in-house or external and part of a professional support system, the financial advisor is responsible for the delivery of all the expertise and for ensuring the ultra-wealthy investor’s experience is as good as possible.
It’s valuable to make the experience with the different specialists as seamless as can be. This can only be accomplished when the financial advisor is directing all the various professionals and other providers—because he or she has the best understanding of the ultra-wealthy investor.