Private banks do not know how to treat family
offices and some offices feel they are not getting the best level
of service from private banks, according to Marcuard Family Office
vice president Jonathan Guest.
Speaking at a Lawrence Graham multi-family
office (MFO) panel discussion in London, Guest said that family
offices should be given better service and represent a good
opportunity for the industry.
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“[Family offices] are not well treated by
private banks. Managers at private banks do not know how to treat
us,” he said.
The comments were part of a wider discussion
around the attraction of MFOs for private clients, how they
differentiate themselves from private banks and emerging trends in
the family office industry.
Stanhope Capital chief investment officer
Jonathan Bell said family offices were attractive because they do
not sell investment products which offers a close alignment of
interests between family clients and their offices.
He said the growth of family offices was down
to the independence and the lack of conflict of interest around
product sales.
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By GlobalDataBell’s opinion was backed by a snap poll of
more than 60 panel discussion attendees. The poll found that 65%
thought MFOs should not sell products and 68% ranked independence
as the best attribute of the family office business model.
More than two-thirds (68%) of attendees
indicated that a MFO’s added value greater than its fees by
negotiating lower fees from managers and taking responsibility for
a client’s fortune.
Sand Aire executive chairman Alexander Scott
said family offices were closer to a partnership relationship with
the clients.
“The dialogue can be a lot richer in terms of
exploring risk and rewards,” he said.
When asked what would be the radical
developments in the family office industry in the next 10 years,
Scott suggested the next decade would see the emergence of a global
MFO operating in multiple markets.
Lord North Street co-founder William Drake
noted there were about 15 family offices in the US with more than
$10bn in assets under management.
The next 10 years would see a consolidation in
the MFO space with many independently-owned MFOs possibly moving
inside private banks, Drake predicted.
