The “commercial” multi-family office segment, backed financially by large banks, posted the greatest asset growth in the sector last year, according to a report by Cerulli Associates.

The “commercial” multi-family office segment, backed financially by large banks, posted the greatest asset growth in the sector last year, according to a report by Cerulli Associates.

While there remains debate over whether these offices are “genuine” family offices, high-end wealth management units are paying off for many institutions, said Donnie Ethier, associate director at Cerulli.

The report, entitled Addressing the Unique Needs of Wealthy Families, highlights that the RIA segment is still a major driver of MFO momentum. It also estimates that the MFO channel is comprised of some 200 firms that control more than $700 billion. 

“Many executives agree that the phrase 'multi-family office' has lost its allure because so many wealth managers use it to explain their services geared to wealthy investors,” Ethier added. “This has generally watered down the term to a marketing scheme. Evaluating a multi-family office should be based on the practices' high-touch services and DNA versus its assets under management.”

Third-party management opportunities “will only grow” as more RIAs move upmarket and qualify for MFO status, Cerulli said. The firm predicts that more national and super-regional banks/trust companies will “likely follow suit.”

“Appeal will grow across the segments as the firm count and assets swell,” it said.

Family Wealth Report is in contact with the research house to find out more information on the data.