UHNW Institute

Best Practices For Family Offices, Advisors - UHNW Institute Conference

Tom Burroughes Group Editor June 16, 2021

Best Practices For Family Offices, Advisors - UHNW Institute Conference

Some of the most pressing issues that face family offices, their members, and the advisors working with them, were put under the microscope in a two-day conference held by the UHNW Institute last week. This is a summary of the main discussions, with video clips alongside.

North American family office figures - including family members involved directly with these institutions - held in-depth discussions on the challenges facing them and their client families at the recent UHNW Institute two-day conference. 

Here is a video of the edited highlights of the discussions and presentations.

Day One
Advisors, consultants, and ultra-wealthy families gathered at the virtual event - produced in conjunction with Family Wealth Report - to address new frameworks for the tasks and skills required to serve the increasingly complex families of today and tomorrow. Topics included talent management, regulatory concerns, handling family dynamics, and what the future may hold as demographics transform families. 

The first presentation, “The Ten Domains of Family Wealth - The First Year,” was led by Jim Grubman, content and curriculum chair at The UHNW Institute and owner at Family Wealth Consulting. Explaining the ten domains (see FWR interview on the model), Grubman noted that advisors and families have already begun actively embracing the model since rollout of the new paradigm last spring. His presentation was followed by a series of breakout sessions on aspects of the ten domains. The discussion post-breakout set a pattern of lively engagement by participants that continued throughout the remaining two days of the conference.

The next session was moderated by Bill Woodson, a UHNW Institute founder and head of Wealth Advisory and Family Office Services at Boston Private, who led a panel entitled “Family Offices - Challenges and Opportunities.” Fellow panelists were Michelle Clements, president, Synergy Trust Partners; Dennis Jaffe, senior research fellow, Banyan Global Family Business Advisors; Tom Handler, chairman, Advanced Planning and Family Office Group, Handler Thayer; Barbara Hauser, consultant and editor of the International Family Offices Journal, and Linda Mack, founder and president, Mack International LLC.

Woodson kicked off discussion with the thorny subject of regulation and of how the recent implosion of Archegos Capital, a hedge fund structured as a family office, was being used by some regulators and legislators as grounds to police family offices more tightly. For example, the House Financial Services Committee chairwoman, Maxine Waters, has proposed draft legislation requiring family funds managing more than $750 million to be subject to Dodd-Frank’s regulations. 

Woodson – reprising the kind of comments made to FWR a few weeks ago – said it would be very disruptive for family offices to abide by such new regulations and that such rules missed the real problem. The problem was not family offices but the individuals within them making decisions, along with their counterparties. “What [Archegos founder Bill Hwang] did appears to have been totally legal based on what has come out so far,” Handler said. He also voiced a broader worry that wealthy Americans are being targeted unfairly and that the Archegos debacle is a part of that.

Turning to recruitment and talent management issues, Linda Mack set out trends in the family offices recruitment sector, noting developments such as increased professionalism and formalization of governance, use of long-term incentives and forms of deferred compensation. 

Jaffe and Hauser discussed why family offices are created and ideas about the suitable time to set one up. Hauser, for example, noted that one doesn’t often hear about family offices being created prior to a liquidity event. Jaffe noted that when liquidity events happen, there could sometimes be a rush among family members to invest when in fact it would be wiser to wait for some time. Jaffe also noted one hot area is the interest in creating family offices in China and India, and the very specific cultures within both.

Second day
The second day started with Joe Calabrese, chief operating officer of Wealth Management at KeyBank, moderating a session entitled, “The Promise, Perils, and Path to Truly Integrated Wealth Management: What Works?” Panelists included Keith Lender, president, Baldwin Street Management; Tom McCullough, chairman, CEO, and co-founder, Northwood Family Office; Tania Neild, CTO and owner, InfoGrate; and Allan Zachariah, co-CEO and advisor to families of significant wealth at Pathstone.


Much of the discussion focused on the utility of “integration” in a family office and how to not only implement but to value it from a pricing perspective. Zachariah talked about his own background – including his past work with Harris myCFO – discussing how to tie fees directly to what’s being done so that clients understand the value. The industry needs to be better at explaining the benefits of integration to families rooted in traditional thinking and business models.

On the technology side, Neild outlined the many problems that arise for family members within FOs when melding different technology systems, particularly as FOs increase in size and scope. Another challenge is the integration and transparency of clients’ widely disparate assets. A lot of work is needed to catch up with clients’ demands after the pandemic, she said. 

Lender stressed that effective technology – applied in the right way – can play a crucial part in knitting different parts of a family office together, allowing such entities to achieve the kind of scale that can often be problematic.

McCullough noted that integration is hardly a new concept – some financial firms have understood its importance for years. One way to frame it is to see integration as the mortar that binds bricks in a wall together; multidisciplinary advisors and their firms embed technical services into a seamless process for the benefit of the client. 

In the next panel, under the banner of “Looking Ahead: Serving the UHNW Family of the Future,” participants looked at best practices required to handle changing demographics, client expectations, regulations, and new business models. This segment was moderated by Grubman again, with panelists Andrea Ayres, director, Family Office at Brown Advisory; Michelle Clements, president, Synergy Trust Partners; Steve Prostano, partner, head of Family Advisory Services at PKF O’Connor Davies; and Greg Rogers, founder and managing partner, RayLign.

Clements pointed out that family offices require strong leadership to help build a healthy culture. She noted that true integration – carrying on from the previous panel’s main takeaway  – wasn’t the same thing as simply co-locating services under one roof. Recognizing that “integration is fundamental, but expensive,” she nevertheless advocated for the deep benefits to the family over the long term. 

Panelists discussed whether FOs and other institutions should move from an AuM pricing model toward retainer or hybrid pricing models that made more sense but, as emphasized earlier, were harder to explain to many clients. Rogers argued that most AuM fees were negotiated between the firm and client and were not set in stone. He underscored that retainer pricing is more art than science, and that firms might either overprice non-investment services initially or potentially face scope creep over time. Prostano said he thought many FOs still used asset-based fees and were giving other services away for free. However, he clearly stated that the future was ultimately with hybrid pricing. 

By the end of the conference, many senior industry experts had weighed in on the cutting-edge issues of the present and the future. The UHNW Institute plans to follow up with more events tailored to its mission of educating and empowering families as well as family offices.

Register for FamilyWealthReport today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes