The family office model has become well-recognized by wealthy individuals and families as the preferred way to address their financial lives. In a 2018 study of 264 wealthy individuals, nearly three-quarters reported wanting the same advantages single-family offices can provide the super-rich. About nine out of 10 wealthy individuals with a net worth greater than US $30 million, eight out of 10 wealthy individuals with a net worth between US $10 million and US $30 million, and about three out of five wealthy individuals with a net worth between US $1 million and US $10 million are strongly attracted to the family office model.
The demand for meaningful, cohesive solutions characteristic of family office practices is unquestionably present. To meet the burgeoning demand, diverse professionals, including accountants, are establishing family office practices. More and more accounting firms are embracing family office practices to serve the wealthy, and the financial rewards to the accounting firm from a high-quality family office practice are exceptional.
From greater per-client revenues to a steady flow of new wealthy clients, accounting firm family office practices can generate more profits than any other practice within the firm. To make this happen, the accounting firm has to build an elite team of professionals from within and external to the accounting firm.
According to Paul Saganey, founder and president of Integrated Partners and co-author of Optimizing the Financial Lives of Clients: Harness the Power of an Accounting Firm’s Elite Wealth Management Practice, “For accountants to capably deliver the range of expertise the wealthy are looking for, they have to expand beyond their core services. Accountants with the most successful family office practices tend to think about what their wealthy clients need and want. The focus is on outcomes as opposed to services. To make an accounting firm’s family office practice work well is to develop and nurture an elite team composed of experts from different, often complementary, disciplines.”
Putting an elite team together for most accountants takes focus, time, and often considerable effort. Ensuring they can bring a wealthy client the best answers means working with a team of highly talented professionals. At many accounting firms with top-notch family office practices, it has taken a reasonable amount of time and considerable effort to find the proper set of diverse professionals who are not only very good at what they do but put the client’s needs and wants first and foremost and are willing and able to work as a team.
According to Andree Mohr, chief implementation officer for Integrated Partners, a leading financial advisory firm where she oversees the growth initiatives, including the CPA Alliance program, “Elite teams, while essential, are not enough to establish a high-quality accounting firm family office practice. Critical is the ability to develop a deep understanding of wealthy clients. Consequently, a well-structured discovery process is essential. Only by asking thoughtful questions and carefully listening can the accountants in the firm’s family office practice learn what matters to their wealthy clients and what is of lesser importance. Because of discovery coupled with the diverse capabilities of a family office practice, accountants can best develop solutions that can deliver exceptional value to the wealthy.”
Accountants with family office practices need to be aware of a growing trend. As many accountants recognize the business development power of claiming to have family office practices, the wealthy have become more circumspect. To better address the many family office pretenders and identify the accounting firms that can deliver superior results, the wealthy are increasingly becoming better consumers of high-end professional services.
Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.