Wells Fargo launches own-brand multifamily office

FWR Staff

1 April 2008

Officially that is; the thing's been kicking around for more than two years. Two and a half years after a soft launch, Wells Fargo has officially rolled out its Family Wealth Group. The multifamily office caters to families with at least $50 million in assets.

"Our clients are families who are concerned not only with managing their wealth, but also with ensuring responsible stewardship of their wealth today and for generations to come," the says Family Wealth Group's national director Michael Cole.

The Family Wealth Group serves high-wealth families that need comprehensive wealth-management services but don't want to spend the $1.5 million a year industry sources say its takes to staff and support a dedicated single-family office.

New offices

Part of Wells Fargo Wealth Management Group, the Family Wealth Group manages about $7 billion for 70 families. It has offices in San Francisco, Los Angeles and Minneapolis.

Over the next two years, Cole sees the Family Wealth Group establishing six to eight additional offices "in cities where we have a presence now."

That could include the U.S. northeast. Though San Francisco-based Wells Fargo doesn't have too many feet in the eastern third of the U.S. -- not compared to its presence in the Midwest and West -- the Family Wealth Group has clients across the U.S.

The connection with the Wells Fargo brand and its wealth-management division are competitive advantages for the Wealth Group, says Cole.

Close to hand

Fargo Wealth Management Group, which includes Wells Fargo Private Bank and its Private Client Services retail brokerage, has about 2,000 relationships with at least $10 billion in play. Though Cole figures less than half of this group would be eligible to become Family Wealth Group clients, it's still a rich source of potential business.

There are also chances to gather assets from existing relationships. The Family Wealth Group has an average relationship size of $100 million, but this represents only about a third of each client family's average total net worth.

The Family Wealth Group provides traditional and alternative investments, credit and trust services, tax and estate planning, risk management, reporting, and a range of governance and planning services for families and their businesses and philanthropic enterprises.

Coles sees no conflict between the Family Wealth Group and Lowry Hill, a Wells Fargo-owned multifamily office based in Minneapolis. For one thing, Lowry Hill emphasizes its own asset-management expertise while the Family Wealth Group is an open-architecture shop, says Cole. In addition, with a minimum investment of $10 million, Lowry Hill fishes a bit further downstream.

Cole says he and his colleagues spent a lot of time studying the needs of high-wealth families to formulate the Family Wealth Group's platform, conducting its own research and delving into findings by private-client groups like the Family Office Exchange, the Institute for Private Investors and the VIP Forum. -FWR

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