Many independent advisors are evolving their practices to serve wealthy families and the unique needs they have. One example of this is Joan Malloy in St. Louis, MO. The goal of Ms. Malloy’s practice is to help families of wealth beat the shirtsleeves in shirtsleeves in three generations proverb that families across the globe attempt consistently to defy. Providing the so-called family office level of service is quickly becoming the goal of many. It's also one that can easily elude advisors and confuse clients.
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Ms. Malloy’s firm oversees about $400 million in assets. Her business approach is a savvy one, offering to manage an existing multi-custodian structure so that families can leave their accounts where they are while she coordinates their management. She focuses on cash management—a great need for the wealthy since they often do not realize just how much they are spending and at what rate they are spending it—investment oversight, and tax and estate planning.
She tries to help families optimize both their personal and business assets, helping them manage collectibles such as art or classic cars and other assets such as yachts and wine collections.
She establishes a fixed rate fee based on the complexity of the client’s situation as well as a variable fee for investment reporting and monitoring.
Advisors offering family office level service can easily overextend their expertise into areas where they may not have the depth of experience and skill to provide. Malloy gives the example of a wealthy client who seemed by all accounts to be successful but who was unsettled in his personal life. She’s tried for 20 years to help the client establish a governance system to help him foster closer relationships with his children and grandchildren—a goal he has stated often.
Although this client is said to be uncooperative in that effort, enlisting the collaborative help of a professional consultant in these areas would be a wise move. One skill such a professional may have is to effectively address issues that keep clients from doing what it takes to achieve their goals. These issues lie far underneath the scope of most advisory services.
If you’re thinking of evolving your own practice toward a family office level of service, there are many things to consider in getting it right. One of these is an honest appraisal
of the skills you truly can offer and which skills you may need to bring in from an external resource. Deciding on the services you wish to provide your clients is the first step. The honest appraisal will then help you determine the best way to structure and deliver that platform of services.