What is a Multi-Family Office (MFO)?

The family office represents a center of influence and stability to help families with exceptional wealth ensure the preservation and growth of their financial assets and family heritage. Most Multi-Family Offices (MFO) evolved from these family offices. They are made up of exclusive groups that have opened access to their services to more than one family of exceptional wealth. In general, an MFO aggregates and focuses resources to facilitate a common interest in asset protection, cost control, financial education, family philanthropy and a host of other needs.

MFOs are structured to offer integrated, interdisciplinary services to ultra-high net worth individuals and families. MFOs have historically provided customized service levels and confidentiality not available from larger product-driven financial institutions. Typically, a quarterback is assigned to each client to look after all aspects of the financial planning and implementation process.

If you need assistance in finding the right MFO for your family, contact FOX at 312-327-1200 or send an e-mail.

MFO Types

MFOs have evolved in different ways, but most exist to serve a unique set of family group needs. FOX currently tracks more than 50 organizations in the United States that consider themselves to be a MFO. Various models of MFOs current exist. They include:

• Long-established family offices that recognize the only way they could keep their family office intact and attract the most qualified professional staff was to increase the assets managed by offering their services to additional investors.
• Long-established family offices that have chartered private trust companies to handle their family trust needs and those of other families.
• Family groups that consciously developed a global investment expertise to serve their needs and those of other investors.
• Family groups that turned ownership of the family office over to the management team but remained satisfied clients of the office.
• Non-family owned financial service groups specializing in family office-type services.

Characteristics of Successful Multi-Family Offices (MFOs)

1. Objective Financial Advice
   1. No conflict of interest in alignment of goals
   2. Distinction between financial advice and product selection
   3. Sophisticated "make or buy" decisions
      
      
2. Creative Solutions to Financial Problems
   1. Broad array of sophisticated strategies/services
   2. Integration of complex financial goals
   3. Team of skilled professionals with experience across disciplines
      
      
3. Delivery of Complex Services in a Consistent Manner
   1. Process to deliver a high quality of services
   2. Integrated reporting for better decision-making
   3. Value-added delivery on an annual basis
      
      
4. Ability to Offer Relationship Pricing Across the Family Group
   1. Each household with separate financial goals
   2. Collective application of key planning techniques
   3. Willingness to take a long-term view toward client relationships
      
      
5. Ability to Select Strategic Thinking Clients
   1. Matching client needs with organization skills
   2. Finding clients willing to invest in the process
   3. Managing Client Expectations

MFOs are intimately familiar with the demands of the taxable client and have been able to provide skills and capabilities, instead of products and services, to creatively respond to the needs of family office clients. This creative integration of specialized services can extend far beyond those of other types of financial institutions. The inherent service orientation of an MFO provides a powerful dynamic to seek even more ways of leveraging buying power and an expanding knowledge base for this special niche in the wealth management industry.

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