What are some of the questions to ask when hiring a Multi Family Office™ advisory firm?

Before deciding to work with a Multi Family Office™ advisory firm, be sure to ask the following questions:

• Do you have all core disciplines in-house? These core disciplines include: accountants, tax specialists, lawyers, and investment advisors with appropriate professional accreditation. If the firm out-sources any of these critical functions, be aware that the firm may not be capable of effectively managing the effectiveness and quality of the work being undertaken by the external advisors. Unless the firm has professionals on staff that have "walked a hundred miles" in the shoes of these external professionals, there may be deficiencies in the integration and execution of the strategic plan.
• Do you provide all of the core services in-house? Be sure to ask about the following core services: Family governance, goal development and education; tax, estate and financial planning; wealth transfer planning; asset protection and other risk management; investment advice, consulting, monitoring; philanthropic planning and foundation management; financial recordkeeping, tax preparation and compliance.
• How are you paid? A true Multi Family Office™ will align its clients' interests with its own, and fees are key to doing this. Firms that are paid commissions on the sale of any product may have a bias to selling that product. In addition, firms that are paid solely as a percentage of marketable securities (your investment portfolio) may be biased in favour of recommending that you move assets into those types of investments (as opposed to keeping your real estate, private equity, or other assets). Hourly fees are very often a disincentive to proactive management.
• Do you have insurance for Multi Family Office™ services? Insurance is available for family offices. Insurance extended to accountants, lawyers, and investment advisors/counselors have limited scope and application and will not extend to the broad array of services offered by a true Multi Family Office™ advisory firm. Ask for proof of insurance before signing on.
• What is your family-to-staff ratio? Most true Multi Family Office™ advisory firms provide hi-touch services to their clients. This will mean that the family-to-staff ratio will not generally exceed 3 to 1. True Multi Family Office™ advisory firms closely monitor this ratio to strike a balance between excellent service and profitability. WaterStreet's current family-to-staff ratio is 2.2 to 1.