The aim of high-performing multi-family offices is to deliver superior results to their wealthy family clients. By and large, they are patterned on high-performing single-family offices. Because of the effectiveness of high-performing family offices, there is considerable and growing demand for them by wealthy families. Specifically, high-performing multi-family offices are increasingly recognized as the preferred provider among the wealthy.
The powerful appeal of multi-family offices by the wealthy has been clearly recognized by a vast majority of professionals. Many of these professionals have concluded that by identifying themselves as a multi-family office, they have a better chance of connecting with more affluent prospects, which is, very often, one of their most significant business concerns. Based on the research with wealth managers, multi-family offices and other leading professionals, this is indeed the case.
According to Justin Breen, the driving force behind the exclusive BrEpic Network and co-author of Superior Results: Maximizing the Value of Your High-Performing Multi-Family Office, “A substantial number of professionals, especially investment professionals, call their firms multi-family offices. Based on our definition of high-performing multi-family offices, we can refer to this inaccurate self-descriptor as the bait. These firms are not going to deliver exceptional value save possibly in one area such as investment management. Because these firms are narrowly concentrating on their services and products, this is the switch.”
How are you to know if you are dealing with an actual multi-family office or a firm that has “hijacked” the term for marketing purposes? Looking at a website or a PowerPoint presentation, for instance, is not going to enable you to determine a high-performing multi-family office from those firms, which are less capable or not even multi-family offices. Their marketing materials are unlikely to inform you who is striving to help you achieve your self-interests and who—while self-identifying as multi-family offices—are just interested in managing your investable assets.
If what you want and all you want is money management and the firms calls itself a multi-family office, there is not a problem. However, if you are interested in more diverse and extensive solutions available from a “traditional” multi-family office, then a firm that is solely focused on one area of expertise is potentially a mistake.
To be confident you are working with a multi-family office—and, more importantly, a high-performing multi-family office—you are going to have to take some initiative.
“To a very large degree, wealthy families get introduced to multi-family offices from various professionals they are working with or know,” says Breen. “If the experts are the multi-family office are considered thought leaders in their respective fields, all the better. To a much lesser degree, some wealthy families are introduced to multi-family offices from their peers.”
To help avoid the bait and switch phenomena, you are well served by asking the referring parties a number of questions such as:
• When you say the firm is a multi-family office, what precisely do you mean?
• Besides managing my money, what other things can the firm do for me and my family?
• What kind of relationship do you have with the multi-family office?
Your objective is to get a clearer understanding of the multi-family office being referred. You may very well want to ensure the firm is more than an investment advisor with some tangental relationships with other types of professionals this type of firm might be exactly what you are looking for. The real issue is knowing what you are dealing with.
Even if you choose to talk with professionals at the referred multi-family office, you want to dig to better ensure you are really dealing with a high-performing multi-family office. The following are some indicators you might not be talking with high-performing multi-family office professionals:
They tend to spend more time talking about themselves and their firms instead of making a concerted effort to understand you and your world.
• They are not asking questions that help you explain what matters to you.
• They are unable to distill what really matters to you.
• They often strongly promote services and products, which are core to their business models.
• They are unable to effectively address concerns, which go beyond their own individual capabilities.
“The best way to avoid the hustle that is the multi-family office bait and switch is to strategically query all the people involved,” explains Breen. “This way you can effectively become more informed so that you can smartly evaluate these firms. You do this by systematically using an array of thoughtful open-ended questions coupled with some street smarts.”
Request a complimentary PDF copy of Elite Wealth Planning: Lessons from the Super Rich at princeasoc@protonmail.com.
