Multifamily Office Clients

Multifamily Offices Attract More Clients in Recession

Multifamily offices have picked up a good amount of clients in the recession as wealthy families move away from the large banks and prime brokerage houses. It is estimated that multifamily offices boosted their number of clients by 9% last year, suggesting this a potential long term shift to family offices especially as the industry receives more attention.

A multifamily office takes on a range of duties from managing wealth and making investments to monitoring taxes and paying bills. Multifamily offices also look for larger clients typically beyond $20 million, whereas a single family office will take in $1 million clients. According to Barron's, Bessemer Trust is the largest multifamily office in terms of assets under advisement at $52 billion and Geller Family Office Services advises the largest accounts with $278 million being the average.

In general, multifamily offices fared well during the turmoil of the past year. Assets under advisement fell by just 9.2% in 2008 at a sampling of multifamily offices, according to a survey by the Family Wealth Alliance. By contrast, the Dow Jones Industrial Average fell by 34%.

Another telling number: Client attrition was less than 3%. If only the giant banks and brokerages could say the same.

"The multifamily-office model is growing, and attracting wealthy families," says Austin Shapard, president of Rockefeller & Co.

The industry does have its skeptics. They argue that multifamily offices aren't much different from hundreds of other wealth-management concerns that also serve families -- from independent money managers to financial conglomerates.

Leaders of multifamily offices insist otherwise. They say their industry is focused more tightly than other providers on the complex, multigenerational needs of moneyed clans. In addition, they claim to be free of the pressures to "sell" any particular financial products, often a complaint about brokerages and banks. Source

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