What can and should the word "holistic" mean in the context of wealth management, and family offices, today? The author of this article considers the territory.
The word “holistic” can be bandied around a great deal in the wealth industry, but it does speak to an important quality of putting all aspects of a person’s financial and non-financial life under one “roof” so that advice is tailored to that life.
The writer is Jacco de Bruijn, who is co-founder and CEO
of Nines. (More on the
writer below.) He has written for this news service before,
The editors are pleased to share these insights; the usual
editorial disclaimers apply. Please comment if you wish. Email
The trend toward holistic wealth management
The next generation of high net worth families wants more from their financial advisors.
According to new research from Fidelity, 71 per cent of Millennials (versus 51 per cent of Baby Boomers) say they would prefer to do most of their financial business at one institution that can bring together the specialists and services they need, rather than working with a number of different advisors.
If younger families expect a simpler solution – one go-to place to turn when they need help managing any aspect of their wealth and their lives – wealth managers and family offices need to evolve to meet a wider range of needs.
Enter, holistic wealth management, an approach that goes beyond financial services, and recognizes that financial health is closely intertwined with physical, emotional, mental, and social wellbeing.
In a recent conversation on FOXCast, the podcast hosted by the Family Office Exchange, Founder & Principal of Personal Fiduciary Advisors, and founding board member of the UHNW Institute – see link here to the Institute – Wally Head made the case for integrated wealth management. He compared the role of an integrated wealth management advisor with a general contractor on a construction project – someone who understands the family’s needs and culture, who finds the right suppliers and advisors and integrates their activities.
Meanwhile, in a recent white paper on the Family Focused Family Office for UBS Family Office Solutions and Family Advisory and Philanthropy Services, Mark Tepsich and Nicole Sebastian explore how family offices can adopt a more integrated approach. The Family Focused Family Office is designed to help the family be more intentional about fostering not just financial capital, but also four other forms of capital: human, intellectual, social and spiritual.
Adopting a holistic approach may mean offering expanded services such as:
-- Estate planning;
-- Risk management;
-- Estate and property management;
-- Lifestyle management;
-- Charitable giving;
-- Education planning;
-- Personal development and coaching;
-- Family education; and
-- Family communications support and retreat planning.
While many wealth managers and family offices are beginning to explore this approach, how many are actually offering expanded services?
Data from Citi’s 2023 Global Family Office Survey shows that 48 per cent of family offices do not provide any sort of lifestyle management, and 43 per cent don’t provide family education.
This gap presents an exciting opportunity for wealth managers and family offices who want to set themselves apart. Earlier this week, Tom Burroughes wrote about his hope that the wealth sector would embrace the “unsexy but important” work of managing things like bill pay, property management, and travel support.
“Time is money, and anything that firms and advisors can do to free up people’s time so they can produce wealth, and enjoy life, is what the ultimate value proposition must be all about,” said Tom.
So, how, exactly can firms seize this
One option is to build out a range of in-house services. For example, we’ve worked with several multi-family offices who’ve recently brought in estate management experts to support clients with household staff and property management, and to field any ad-hoc lifestyle or home-related questions.
JDJ Family Office Services, now a part of Maestro Financial Solutions, sets a gold standard for understanding the wide range of complexities in their clients’ lives, and providing holistic services to meet their needs.
Another option is to partner with service providers who share your values and commitment to a high level of service. Tapestry Associates, for example, works with firms to provide support for non-financial assets, such as their homes, art, yachts and aircraft.
Increasingly, firms are partnering with technology platforms to expand their services. For example, Nines allows firms to provide estate management services, Vanilla allows them to provide estate planning, and Giving Place allows them to provide support for charitable giving – all without investing the time and resources that would historically have been required.
This is partly because the next generation expects technology platforms that allow them to easily communicate and check in on progress, but the right tech partnership has a few key benefits to the advisors, as well:
-- Efficiencies. Building a solution in-house could take
years. The right partnership allows you to implement new services
quickly and at a lower cost;
-- Internal time savings. Inevitably, families ask their advisors for help with things that are outside the box. If you’re already fielding these requests, the right partnership will save time for you and your clients;
-- Subject area expertise. Tech partnerships allow you to tap into a wealth of knowledge in each particular niche, without bringing experts in house; and
-- Continuity. Each time you hire a new analyst in the family office, it takes training and time for them to get up to speed. Having systems and processes lets you navigate turnover with minimal disruption to the family.
Holistic wealth management is an opportunity to foster the holistic success of the families you support, and wealth managers and family offices that embrace a holistic approach stand to win the attention and loyalty of the next generation.
About the author
Jacco de Bruijn is an experienced technology entrepreneur who has been leading revenue and operations teams and scaling several businesses from inception to acquisition. He has a passion for creating customer-centric brands and building an employee-first culture. As co-founder and CEO of Nines – a 2023 Family Wealth Report Awards finalist in the Property & Household and Product Innovation categories – Jacco works with UHNW families and the advisors and private service professionals who support them, using software to simplify and elevate complex and demanding households.