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Questions for the Multi-Family Office (MFO)
It is important to know what questions to ask when evaluating
successful Multi-Family Offices (MFOs). FOX has developed a list of questions
that are intended to help you in the evaluation process. Our consultants are
available to work with interested families in determining the key questions
specific to a family group if consulting advice is needed. We can also make
introductions to appropriate MFOs based on your specific goals and objectives.
Listed below are some of the questions
you might consider asking the Multi-Family Offices you choose
to interview.
Firm Background and Ownership
- When was the firm founded?
- What was the impetus behind the creation of the
multi-family office (MFO) business? When did the firm begin providing MFO
services?
- What is the firm's organizational ownership and
structure? If family-owned, what percentage of the family's assets are managed
by the MFO?
- Has the ownership changed over time? If so, provide
the history and nature of major ownership changes.
- Describe the internal and external auditing procedures.
- Describe any government and security regulations which
the firm is subject to.
- Provide a copy of the firm's ADV - Parts I & II.
Integrated Financial Services
- Do you provide totally independent, objective
advice for your clients? Does your firm have captive investment products?
Are these products required to be used by the MFO clients?
- Does your financial advice integrate investment
goals, tax goals, wealth transfer goals, and family philanthropic goals into
a comprehensive family strategy?
- How do you help family members develop their goals
and strategies if they are not clearly formed?
- Describe your expertise in each of the following
service areas:
- investment diversification
- performance measurement and analytics
- foundation and philanthropic services
- wealth transfer planning
- financial planning
- tax planning and tax compliance
- bill paying and cashflow management
- client education
- What new services/service
enhancements are you planning to introduce in the next year?
- What would you describe as the most unique characteristics
of your business?
Client Relationship Management and
Communications
- How are your account teams structured?
Is there a dedicated relationship manager? Who is the backup in the event
the relationship manager is out of the office?
- How frequently do you talk with or visit your clients?
- How do you most frequently
communicate with clients?
- Do you have regularly scheduled
face-to-face meetings? If so, what is the frequency and who typically
represents the firm?
- What kind of client education
do you provide as part of your services?
- Do you offer formal seminars
or other educational vehicles?
- Do you publish research for
your clients' benefit? Please include a list of research papers distributed
to clients with the date of publication.
- Do you provide electronic versions
of client reports? Do clients have online access to their reports?
- Do you have a website? What
is the website name (URL address)?
Profile of Clients and References
- Can you describe your ideal client profile?
- How many family relationships does your MFO business
serve? What is the current distribution of clients by type (asset size and
generations served)?
- What percentage of the clients are full-service
relationships? What services do you provide to the percentage that does not
use your firm for all services?
- How do you ensure the confidentiality
of client information? Will you sign a confidentiality agreement related
to this interview process?
- Provide references for three clients that have worked
with your firm for at least five years.
- How many clients have terminated your services in the
past three years? Can you explain the reasons for their departure?
Growth of Business and Personnel
- How many employees work at your firm? Provide
a breakdown of employees in the following categories:
- senior relationship managers assigned to clients
- trust officers
- portfolio managers/research analysts
- tax and accounting professionals
- philanthropy specialists
- marketing professionals
- information technology professionals
- operational/back-office personnel
- administrative staff
- Provide the number of employee hires and terminations/resignations
for the past three years.
- How are relationship managers compensated? If
they are paid incentive compensation, what is that based upon?
- What is the typical account load for a relationship
manager?
- Please provide the biographies for key personnel.
- How do you get new business? Do you have an active
new business development effort?
- How many new clients have you added/lost in each of
the past three years?
- What are the current assets under management?
- Please provide a breakdown of:
- growth in new assets due to new client business
over the past three years
- loss in assets due to client attrition
in the past three years
Pricing and Fees
- How do you charge for your services? Provide
your published fee schedule, if you have one.
- Is there a minimum account size/minimum fee requirement?
- How does the fee structure differ for different
client types?
- Do you offer any performance-based fees?
- Do you accept soft dollars?
- Do you accept fees from any other service providers?
If so, under what circumstances? How is this disclosed to clients?
Sample Reports
- Request copies of the following documents:
- Organization chart for the company
- Relationship team for your situation with descriptions
of role of each team member
- Set of comprehensive financial reports
- Performance analysis reports, for latest period
and since inception, for sample client.
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