Chairman’s Message: Who Our Clients Are and Where They Come From

People often ask who our clients are and where they come from.

Looking down the list of our 80ish client families, about 50% are from entrepreneurial families. Some of them have sold their businesses and some of them still operate them. Another 25% are what we call ‘high-performance professionals’. These folks are (or were) vice chairman of investment banks, senior partners in the financial/ investment industry, very senior corporate executives, professionals, and professional athletes. The other 25% is a mix of families who inherited their money, individuals who are widowed or divorced, large lottery winners, and charitable and family foundations.

Our minimum net worth per family is $10 million, but most are well above that level, including some over $1 billion.

Not surprisingly, most clients come to us via referrals from other clients or their professional advisors.

Clients choose us very carefully and we are also very selective in who we will take on as a client. We want to be sure there is a clear need for our services, and that we can provide what the client family wants. We also want to make sure there is a good fit of personality and values, so that the relationship starts on solid footing and is likely to last long term.

Another question I often get is -- what are the main catalysts that bring people to a family office?

It is usually a combination of the following five reasons.

1. Sale of a business or other cash infusion

Many business owners have most of their wealth tied up in their business. They know how to manage that business well, but once the business (or part of it) is sold, they end up with a large amount of cash. Most have not had experience with this amount of liquid capital, and it can be a daunting experience. They need help developing an overall game plan, creating an investment strategy, selecting and overseeing investment managers, building a tax and estate plan for the road ahead, and ensuring everything is managed well and “all the trains run on time”. They appreciate having a family office that is proactive, objective and experienced in managing these wealth events, and setting up a solid strategy for the new ‘big liquidity’ environment.

2. Complexity and frustration, and a desire to hand off the major workload and responsibility of managing financial affairs

Some families find themselves at the end of their rope dealing with the complexity and frustration of handling all the administration and decision making that is required to manage their financial affairs. They have a desire for better organization and a clear sensible strategy. They want someone else who they can trust to tame the complexity, consolidate, and manage the diverse components, coordinate with their advisors, and report to them regularly – so they have time to pursue their other interests.

3. Aging or a health event

Other families come to us when there has been a health event (e.g. heart attack, medical diagnosis, accident etc.) that affects the main decision maker in the family. Or they may just recognize that they are aging and may not always be in a position to be the hands-on manager of the family’s affairs. Many are physically and mentally able to continue managing the family wealth but want to mitigate the risk of something happening to them and the family being left unprotected and unprepared. They engage a family office to become the point person for the family’s financial affairs.

4. Poor investments or other advisors

Some families come to us because they have had a bad experience elsewhere, such as poor investment performance, unresponsive professionals, high fees, or unsuitable advice. They generally want someone to provide an unbiased review of their current investments, find new advisors in some cases, develop a better more integrated strategic approach, and then implement and manage the plan. They often also benefit from the lower fees we can access in key areas, based on the substantial economies of scale we bring by pooling the buying power of all of our client families.

5. Contemplating wealth transition

Some families are thinking about wealth transition to future generations and need help with the preparations for this important step. They look to a family office to get their affairs in good order, document the key details, ensure a solid transition plan for each aspect of the wealth, and help prepare and educate the successors over time.

People initially look into a family office for many different reasons, depending on their own family needs and concerns. Whatever brings them to us, our role is to tackle their most important issues, develop a clear plan, and help them stick to that plan. It has been a pleasure to work with our great group of clients over the last 18 years and we are grateful for the immense amount of trust they have placed in us.

To end things on a lighthearted note, I’ve included a link to a video that we developed on this very subject. In this video we meet ‘The Spencers’. While fictional, they are altogether typical of the families that seek out the services of a family office. I hope you enjoy it.https://youtu.be/phhMrQibmPM