Forgive me; this week’s newsletter is a little short. Let me explain:
On Sunday, I traveled from New York to Miami, flung my bags into a cheap hotel room, navigated a hallway full of bikini-clad coeds, and immediately met someone at a bar to prime myself for the rest of the week. I spent all of Monday and Tuesday on the beach with thousands of other people, where we mingled and drinks flowed before live music blared. (I got on stage at one point, but I’ll spare you the details for now.) I am exhausted and sunburnt.
I swear I was not on spring break! I was attending Future Proof Citywide, a new wealth and asset management conference.
If you were hoping to read a finance conference version of the amazing GQ story “All Aboard the SS Kid Rock,” you’d be disappointed. I socialized on the beach for two days over drinks, but all those conversations were professional, mostly over iced coffee or water.
I took the stage, too — to moderate a discussion about governance and resolving conflicts at family offices with Andrew Pitcairn, a fourth-generation family member and chair of the Pitcairn family council, and Brian Broadway, a vice president at Fidelity’s FORGE Community. I’ll share a video of the whole conversation in a couple of weeks, but in the meantime, I wanted to highlight one of its most important takeaways.
Established in 1923, the Pitcairn family office has reinvented itself twice over the past century and evolved in other ways while expanding to more than 1,000 family members (including spouses). It now also advises over 100 other families and a total of $9 billion in assets. While that might sound like a lot of change to other family offices, Andrew said one thing the Pitcairns regret is not making some changes sooner.
Both panelists stressed to the audience of financial advisors that good governance is not really about creating the perfect plan or structure that will last 100 years. It’s about creating a plan or structure that best serves the family members now and can be adapted as needed in the future. The best-laid plans often go awry anyway.
More private wealth management firms seem to be using or, as someone once told me, “hijacking” the term “family office,” and why wouldn’t they? It has a cachet. And if you’re helping clients manage their investments, handling bills, taxes, and trusts, and doing other things for them, is there a better way to market that? Some in the single-family-office world will scoff at that notion.
But while I was at the conference and talking to wealth management firms (financial advisors are the majority of the 2,500 attendees), it felt like their pursuit of families worth $50 million, $100 million or much more — including those who already have a family office of some kind — is intensifying.
These firms realize that handling bills and taxes and offering concierge services no longer stand out the same way. To compete for all segments of wealthy clients, they are already using their scale and resources to hire and build platforms to sophisticate their investment management, and some have effectively created an outsourced chief investment office in the process.
Those firms are creeping into the family-office realm. Three firms I spoke with in Miami said they already manage at least one sleeve of some family-office portfolios and do nothing else for them.
It’s interesting that in addition to the traditional OCIOs and asset managers, private wealth management firms — the companies hijacking the term “family office” — seem to be emerging as another partner to help family offices with their investments.
Aleta, a next-generation wealth reporting platform
With more than 15 years of experience in wealth reporting, we’ve gained unparalleled insights into the unique needs and preferences of family offices. Aleta was built for family offices, by family offices.
FIND OUT MOREOther News
- Boston Celtics Sold for $6.1 Billion, a Record Price for Pro Sports. Wyc Grousbeck, the owner of the Boston Celtics, agreed to sell the team to a group led by William Chisholm, the co-founder and managing partner of the California-based private equity firm Symphony Technology Group.
- An Investors Guide to India. “To many, this decade, and the next, remain India’s to lose. The South Asian nation is now the fifth-largest economy, with improving infrastructure and the most billion-dollar companies behind the US and China,” Bloomberg reported.
- Immersed in Elegance as the World Rolls By: Luxury Sleeper Trains
- Two gentlemen who stole a fully functioning 18-karat gold toilet more than five years ago from Blenheim Palace — an English stately home that was Winston Churchill’s birthplace — have been found guilty. No word on charges for the person who commissioned a $6 million commode…
- Surging European defense stocks have enriched some business owners and executives. Christian Hadjiminas, the former Phibro-Salomon commodities trader and the Founder and CEO of Theon International, a maker of night vision goggles, is now a billionaire.
Jobs
- A single-family office in New York is hiring a temporary personal assistant who could transition into a permanent, full-time role. They are doing the usual: managing the principal and the family calendars, managing household staff, some light business support, and other things. “Research and vet hotels, restaurants, and experiences, ensuring the highest standards” got its own line in the job description, which probably means you should come with more than just your Expedia and Resy apps.
- Socha Capital, a multifamily office headquartered in Austin, Texas, wants to hire “not your average family office director.” The job posting borrows from the lexicon of boisterous startups: “This is going to be fun, hard, and difficult work. You get to build a network of centimillionaires and have an aggregate value of $5 Billion in your cellphone. We are changing the industry and shifting the paradigm. This is a championship team, where you try out every year for your seat, and get paid for the performance.” If it’s not for you, recommend someone to Founder and CEO Jeff Socha and he will pay you $10,000 if they hire them.
- Bank of America’s Private Bank Family Office, or PBFO, is looking for a family office strategist to join it in New York. This person must understand complex family structures and dynamics and will work with advisors and colleagues to consultatively sell PBFO’s solutions to current and prospective clients. This is not a gig where you sit around and are called upon when needed. This person has experience selling these services to ultrawealthy clients, and they will be expected to do the same here. Salary is up to $335,000 per year (and likely some bonus and equity stuff, although that is not in this job description).
A New Family Office Compensation Report
Your contributions will support a robust and comprehensive outlook on executive compensation within single and multifamily offices. Take the survey and receive a complimentary copy of our proprietary data.
TAKE THE SURVEYOther Stuff
- I suspect most of you follow me or the Modus LinkedIn page already but, if not, you should. Don’t miss the occasional article or post between Fridays.
- Something top of mind you wish there was more to read about? Email or text me. If the information is sensitive, use Signal on a personal device that is not accessible by your employer (e.g., a mobile phone or computer that is not connected to a company VPN).
- Modus would like to publish thoughtful opinion essays — if you’re interested, here’s how you could be the first.
Where I'll be...
- Poolside in Palm Springs, California, today.
- At Columbia Business School on Tuesday to hang out with the Family Business Club. (Can’t wait for this!)
- In New York.
