Do You Need a Family Office? | AWM Insights #123
Family office is the buzzword in the industry these days. The problem is not everyone is staying true to what a family office does and many are not keeping clients at the center of what’s important.
Anyone with sports or business experience understands the value of the team. The integration, independence, and individualization of you advisory team provides you the opportunity to maximize your wealth. Each family is different and deserves a truly customized plan. Not the cookie-cutter solution most of the industry offers.
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EPISODE HIGHLIGHTS:
- (0:40) If you worked hard and made a lot of money, do you even need an advisor?
- (1:00) Athletes and business owners understand the value of the team more than anyone.
- (1:23) Should I have a single family office, multi family office, or hire a broker?
- (2:04) Integrated, Independent, and Individualized are the 3 I’s that you should demand from your team of advisors.
- (2:25) Integrations means your investment plan and advisor is integrated with your tax plan and your tax advisor. The left hand must be talking to the right hand.
- (3:14) If you are not integrated then you are not optimized and missing out on maximizing opportunities to build wealth.
- (3:40) It is tough to argue against having taxes done in house. Anyone arguing against this doesn’t get it. Anyone saying you should keep everything separate everything to have checks and balances doesn’t get what a tax CPA actually really does.
- (4:03) An audit CPA will check to make sure your investments are legit and money is accounted for properly. Someone filing your taxes isn’t doing this.
- (4:40) A team of professionals within a multi-family office will have superior knowledge over a single family office because of the multitude of different situations that will arise and the problem solving to find solutions. This learning is limited in a single family office.
- (5:05) Independent multi-family offices are vanishing each day with private equity buying many firms over the last year. Rockefeller and wirehouses have hijacked the multi family office name and are not independent.
- (5:46) Independents have the ability to go find the best solution. This is in investments, taxes, estate planning. It is an open playing field with no restrictions on finding solutions.
- (6:42) Large institutions become restrictive due to compliance requirements and you can only select things from an approved platform.
- (7:20) These big firms are so afraid of liability they are not able to give best in class advice that is the truly best solution.
- (7:55) Private equity money coming into the independent RIA space removes the alignment of doing whats best for client to doing whats best for the returns of the private equity. Lines get blurred and you are not really independent when you serve shareholders first.
- (9:20) Taking capital from outside equity changes the duty of loyalty to the private equity investors. Ask yourself if your advisory firm is keeping you at the center what’s important.
- (11:23) No two clients are the same. Individualization and customization is incredibly important for everyone but especially for Ultra High Net Worth.
- (11:40) The downside of the single family office is their is only one situation that keeps coming up. You never see different things or new perspectives. In a multi-family office you get a vast amount of experiences you train you problem solving skills and gather experience.
- (12:30) One example of individualization is charitable intent. Some people have none, some people want to give everything away. Some just want to benefit their kids and grandkids. Individualization in just this area is necessary and a cookie-cutter solution isn’t going to cut it here.
- (14:00) One size fits all solutions aren’t the best solution and most of the industry still operates in this way. A true multi-family office does not. It’s entirely customized to your family.
