Thane Stenner defines the increasingly popular term in wealth management, explains what the work entails, and offers insight into how other advisors can build a similar model
The search for ideal clients, often high net worth or ultra high net worth individuals, has advisory practices upending their models and changing the way they operate. For many advisors, switching to a bigger team model that allows advisors to specialize their skillsets and offer a broader range of services to ideal clients has been enough. Other advisors, however, are moving towards a model that offers an even greater degree of service for a small group of very high net worth clients.
Thane Stenner operates a multi-family office. The Senior Portfolio Manager and Senior Wealth Advisor of Stenner Wealth Partners+ at CG Wealth Management manages wealth for 51 client families with a household investment minimum of $10 million+ liquid capital, or at least $25 million+ net worth. It’s a model that many advisors might see as ideal, but it’s one that Stenner explains requires a high degree of commitment and discipline and a genuine commitment to deliver a level of client service that goes far beyond what a traditional wealth management practice offers, even if it doesn’t enter the world of ‘concierge service’ that some rare dedicated family offices offer.
“There’s no pet walking or moving ships across oceans, but you do know what you’re really proficient in and what you can do with real expertise to add value to the relationship, and then you have to price it right,” Stenner says. “For example, we have expertise in wealth management and with third-party investment platforms and independent due diligence. We have access to a capital markets team and we can make introductions internally for clients who want to take their company public or do an M&A transaction deal with a private equity group. It all comes back to figuring out what the client is looking for and what they’re willing to pay for.”
Stenner explains that he tends to work with two sets of clients. One set has a family office of their own, but that family office sees cost savings and efficiencies in outsourcing wealth and investment management responsibilities to Stenner and his team. The other set is approaching a level of wealth where they might want to open their own family office, but they see greater value in going to Stenner’s team, rather than taking on full time staff plus costs dedicated to managing their assets.
In a similar vein, while they offer a higher level of service than a traditional practice, Stenner notes that his team do not wade too far into the waters of tax and estate management beyond where they touch wealth management. When grappling with those issues they will outsource to leading expert lawyers and accountants. Maintaining that level of expertise in-house, he explains, would be prohibitively expensive, and better value can be created for clients by functioning as their financial quarterback.
Even if they outsource to some experts, Stenner stresses the importance of a team in a multi-family model. His own team has 13 members in addition to the supports provided by their dealer, with two associate portfolio managers and three senior portfolio managers all of whom hold leading credentials. The remaining eight members of the team work on client service, ensuring proactive communication with clients — Stenner notes that they will proactively communicate with clients between 30 and 60 times per year. For a client base that does not want to feel like they need to reach out, this level of communication is essential, in Stenner’s view.
Maintaining that level of service means keeping the client base small and exclusive. Stenner’s practice serves 51 client families across Canada and might add on between six and eight new key client families per year. Onboarding those new clients, too, takes a huge amount of work.
At the same time, the term ‘multi-family office’ remains unregulated and ill-defined. Stenner notes that as more advisors have striven to take on higher net worth clients, they’ll start using the term. He argues, however, that a practice with over 100 client families can’t offer a level of service that would meet his definition of a multi-family office. Advisors who want to follow a similar model of service will have to take on a significant risk and go through the painful process of trimming their practice, just as Stenner did, to ensure more exclusivity and high client touch.
“22 years ago I had a practice of about 600 clients, and I took that down to nine,” Stenner says. “I did it in an orderly, disciplined, and caring way where I made sure they were in good hands. That was a tough thing to do with clients who I had dealt with for many years, but I had decided I wanted to go into a deeper business model with wealthier investors, and that’s what you’re going to have to do if you want to lead a practice like this. It was a gutsy decision, but it was not easy to do.”
