Wealth Manager For Family Office

Get this: America’s über rich families are literally fighting over qualified wealth managers to help manage their millions, sometimes billions, of dollars.

Get this: America’s über rich families are literally fighting over qualified wealth managers to help manage their millions, sometimes billions, of dollars.

At least that is the implication of recent research from Celent, a financial research and consulting firm, which shows that family offices—which manage over $1 trillion in client assets—are desperate to hire good wealth managers capable of working with their ultra-wealthy clients. “There are family offices out there that can’t get enough wealth managers. There’s a war out there for financial services talent,” says Robert Ellis, senior vice president of Celent’s Wealth Management group and author of U.S Family Offices, Best Practices in Providing Financial Services to America’s Most Privileged Households.

Sure, you’ve probably heard about the war for wealth management talent by now. But as the financial advisor work force ages, and wealthy baby boomers head into retirement, that war continues to escalate. That’s especially true in the family office business, where serving clients requires highly specialized knowledge and experience.

“Finding the right people is never easy. A lot of the kind of wealth managers you look for are in hedge funds or private banks and don’t want to be wrapped up in families,” says Angelo J. Robles, founder & CEO of the Family Office Association, in Greenwich, Conn. Plus, he adds, there aren’t many recruiters out there familiar with what family offices are looking for. Indeed, Robles says that one of the most common questions he gets from multi-family offices (MFOs) is about how to find capable people. (Recent turmoil on Wall Street may make recruiting that talent a bit easier, Robles says.)

Family offices are typically divided into two categories: those that cater to one family (single family office) and those that serve several (multi-family office.) The U.S. is home to 500 to 1,000 single-family offices (SFOs) and between 2,500 to 3,000 MFOs that manage $300 billion and $750 billion, respectively. That’s over 20 percent of the total $2.4 trillion held by retail RIA clients. Even better news: The ultra-high-net worth segment (clients with a net worth of at least $10 million) is predicted to grow by around 5 percent between now and 2010, according to Celent. That growth will likely make room for new family offices as well increase the demand for financial services.

Serving these families requires far more than just financial planning skills. “These are not people who are thinking about saving for retirement. They are planning 50 and sometimes 100 years out. They’ve got land and businesses on several continents that need managing,” says Robles. As a result, family offices typically want wealth managers who already have experience with ultra-high-net-worth families, have financial credentials (CPA and CFP, for example), have worked in private banks like Goldman Sachs, and have global connections in European, Asian and Latin markets.

A thorough knowledge of tax laws also helps. “If you’re going to work as a financial planner in a family office and your understanding of tax law is weak, then that’s a major drawback,” says Ron Noll, head of Noll Wealth Management in Malvern, Pa. If tax knowledge is not your thing, Noll says it’s a good idea to keep tax and estate experts in house. “There’s never a day I don’t interface with the tax and legal folks. It’s better to have them close by,” he adds.

And then there’s the image you present. The ultra-wealthy are “looking for someone who dresses and speaks like James Bond. You’ve got to be comfortable with who you are and be very strong in your position,” says Noll. “You’re going to be going up against people who have created fortunes and have strong opinions,” he says. They key is to be subservient without being servile, he adds. “The nice thing about being the advisor is that you’re the expert. Your clients with $500,000 look to you for all their investment advice. A $1 billion client is not used to taking advice. If you tell him to put $100 million with manager A and he says, ‘I play polo with manager B,’ you’ve got to be able to back down a little,” he adds.

What sets some wealth managers apart is their ability to work with multiple generations—from the creators of the wealth down to their grandkids. This is what defines a true family office. “The successful firms are all involved in the next generation from the start. You can educate them on the responsibility of wealth, how the asset managers are picked and how to read reports. When the parent dies, there is then no question about whether or not the children will stay onboard. If it’s done right, you won’t lose them,” Ellis explains.


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