At only 43 John Benevides, president of family office services for Harris myCFO, is one of the most recognizable figures in the industry. Family Wealth Report contributing editor Charles Paikert sat down with him in his Chicago office to discuss opportunities and challenges for the firm.
He’s only 43, but John Benevides, president of family office services for Chicago-based Harris myCFO, is one of the most recognizable, and knowledgeable, figures in the family office business.
Before joining Harris last year Benevides was the highly-visible president of Family Office Exchange, where he worked closely with founder and chief executive Sara Hamilton for over five years to broaden the organization’s services and expand internationally.
He cut his teeth in the business as managing director of the financial services practice of the corporate executive board, where he directed the organization's wealth management and investment practice, The VIP Forum.
Today Benevides works closely with another industry veteran, Harris myCFO president Joe Calabrese, to provide Harris with vision, as well as strategic and operational leadership. He is also responsible for developing and marketing new, multi-family office service offerings for the firm’s ultra-affluent clients.
A graduate of the University of Maryland and Johns Hopkins University, where he earned an MS in Finance and an MBA, Benevides is currently chairman of the executive committee for the Family Business Network of the Young Presidents Organization.
Family Wealth Report contributing editor Charles Paikert recently sat down with Benevides in his Chicago office.
FWR: What are the greatest opportunities for Harris myCFO right now?
JB: The four biggest opportunities we see right now are: Generational transitions from G-1 to G-2 and G-3; family business transitions; increases in sudden wealth activity and individuals reconsolidating their wealth back to one or two key providers.
FWR: What are the biggest challenges you see in the family office space?
JB: Pricing, tech and “soft” services.
FWR: How problematic are pricing practices now?
JB: Because of legislative mandates, there is full disclosure on pricing on part two of the ADV form. So there is now almost complete pricing transparency.
Arguably, pricing has effectively been pushed as low as it can possibly go. One challenge will be capturing, maintaining and expanding price in the coming years. Because this industry is service oriented, it doesn’t have deep experience in sales and historically it has been quick to discount services even before the client asks!
FWR: What about tech?
JB: The challenge is that you’re never able to completely solve or finish all your tech issues.
At its core our business is a service business and we see tech at the center of that service. What’s changing now are the demands and desires of clients who want to access information and are increasingly moving to mobile devices. We want to meet that demand, and that’s what we’re investing in.
FWR: And "soft" services?
JB: I think that’s the new frontier. The industry needs to find the right way to introduce, deliver and price those non-investment services.
FWR: What are Harris’s major goals for the rest of the year?
JB: We want to be the bank that defines the client experience and essentially be the pace-setter for the industry. We also want to have the best methods, delivery and technology to meet the demand for client services.
We’re looking at pricing in general. Our analysis is that pricing is low and we’re examining the level, philosophy and structuring of our pricing.
FWR: For example?
JB: For example, charging a retainer for family office services. And if there is a project outside the retainer, charging for time and services. I think most clients prefer a retainer structure. But if they prefer one assets-under-management fee for everything we’ll work to accommodate them.
FWR: What is your take on the state of single-family offices?
JB: We’re definitely seeing more interest and having more conversations with single-family offices to see how we can partner. That being said, you will also continue to see new SFOs being formed, although I think these new offices will have more concentrated mandates.
FWR: Such as?
JB: There will be an investment mandate, a compliance or information management mandate and a family capital mandate. The question is what does the family want to retain control of and what are the roles for the offices and outside firms like Harris?
FWR: What do you make of the recent SEC ruling on family offices?
JB: I think the legislation itself – and the definition of a family office - is a little broader than everyone anticipated and the exemptions are a little narrower than everyone anticipated.
FWR: What do you think will happen as a result?
JB: I think there will be a mini-boom in assessing the activities of the family office to see if what they’re doing falls inside or outside the exemption. If it falls outside they will ask “What do we want to do about that?” I would anticipate that families will increasingly consider working with outsourcing providers and outsource to multi-family offices like Harris myCFO.
I think the legislation will cause the next generation of wealth owners to be even more reflective about what they want for themselves in terms of service. We believe an even greater percentage of the next generation will seek a multi-family office solution.
FW: The northeast is a market that is perceived as a hole of Harris myCFO nationally. Are there any plans for expansion or acquisitions in that part of the country?
JB: It’s a market that one always looks at strategically. We understand that while it is a key market, there are a number of established players already there.