We talk to the founder of a family offices business – now a year old – about revenue models, gaps in service offerings, the importance of health and wellness, and more.

The founder and CEO of Family Office Resource Group – which is marking its first birthday – wants to disrupt the sector with the way it serves UHNW families. And the revenue model of the US-based firm is one of its many big differentiators, Brian Weiner says.

Based in Boca Raton, Florida, Weiner explained to Family Wealth Report that family offices have grown fast but struggle to provide all the services that families want, ranging from chief financial officer services to bill payment and concierge. 

“What differentiates FORG from other providers of outsourced family office services is that FORG white labels its 12 different service offerings for RIAs, law firms and CPA firms,” he said. 

The RIA-driven family office-related industry is full of people paid to cover areas such as business development and client service, he continued. Some FOs and related firms have invested deeply, but there are problems. Technology in the family offices space remains limited. A recent report by consultants McKinsey & Co pointed toward a talent crunch for wealth management, adding to the pressures. The firm predicted that by 2034, at current advisor productivity levels, the advisor workforce would "decline to the point where the industry faces a shortage of roughly 100,000 advisors."

Given such economics, those firms operating must think hard about their business models. 

“There is a service gap that needs to be filled,” Weiner said. “There are some firms who refer to themselves as providing family office services; when they are paying bills and providing consolidated reporting. This is a fraction of what UHNW and family office clients need,” he said. 

Weiner brings plenty of experience; before FORG, he was co-founder and managing partner at Innovise Family Wealth Advisors; for more than 15 years, starting in April 2010, he was CEO and of ExCel Global Family Office, which he also founded, before folding that business into FORG.

His new business happens at a time of continued strong growth in family offices. The number of single-family offices is expected to rise from 8,000 to 10,720 by 2030, holding more than $5.4 trillion in assets by 2030, according to Deloitte Private.. 

Revenue model
Unafraid to hold back in his views about the industry, Weiner said he wants FORG to be a pioneer in its method of payment. Much of the wealth sector today charges for services based around a share of assets under management. If wealth managers are to be viewed as practitioners and not brokers, then there needs to be a shift, he said. A doctor doesn’t charge for your treatment based on how sick you are, Weiner said.

“There are inherent problems and conflicts of interest that arise under the current AuM fee model, such as certain advisors making sure their clients are fully invested. This becomes a conflict because most RIAs do not charge their client accounts when they are not invested,” he said. 

Instead, FORG charges clients a flat fee based on the time and complexity of an engagement or assignment.

The aforementioned McKinsey report, issued in February, suggests that willingness to pay fees for advice is growing. In a survey of mass-affluent and HNW people in the US, it showed that clients increasingly "seek more holistic advice as they age, and their needs become more complex across the full spectrum of planning services and balance sheet and investment products." The study found that the share of investors seeking more holistic advice grew from 29 per cent in 2018 to 52 per cent in 2023. At the same time, clients are increasingly willing to pay a premium for human advice. Among investors with more than $1 million in investible assets, the share willing to pay a premium of 100 basis points or more grew by 50 per cent from 2021 to 2023.

Health and wellbeing
FWR asked Weiner about subjects, that until recently, wealth advisors have tended to avoid, such as health. “It becomes messy and by getting involved, advisors could risk their primary reason for the relationship. No one is talking about the importance of this issue – no one,” he said. 

This subject matters to Weiner, who owns and is involved in a behavioral healthcare company, Manifest Recovery, responsible for helping to save hundreds of individuals and families. This is an achievement he is particularly proud of.

On a related point, FORG has a “Seed for Success” program, that works with families to build resiliency and independence. Weiner said it explores ways in which families can take steps to prevent the influence of negative behaviors that hit mental and physical health.

Regulations came up as a challenge
SEC regulations, for example, heavily restrict RIAs from doing certain things that families need. For instance, the SEC has become more stringent on consolidated reporting, particularly on alternative investments. The regulator says that RIAs must go deeper and vet the sources of information and data contained in those reports. The SEC wants to have a fuller view of clients’ balance sheets.

“This presents a financial burden as well as other constraints that makes it impractical for RIAs,” Weiner continued. 

“Another important challenge that SEC and Finra-registered advisors offering family office services inherently have is the ability to keep certain private family office information, such as mental health/substance abuse/etc issues, completely private,” he said. “All emails and correspondence are discoverable when they are audited by the SEC or Finra,” he said. 

And finally, the AI question
Weiner thinks that because A1 will automatize parts of the wealth management value chain, it will lead advisors to shift their practices and offer more services, as well as change their fee and revenue models.

“I believe wealth managers will charge a flat fee based on [the] type of service offering, volume of work, and complexity,” he said.