The banks or boutiques: who wins in the family office?

The banks or boutiques: who wins in the family office?

The banks or boutiques: who wins in the family office?
by Will Ashworth

With $46 trillion up for grabs globally, the family office has caught the attention of the big banks putting the boutique service provider, once in control of this domain, on notice. Whomever gets the upper hand in this rapidly emerging field is somewhat immaterial.

What really matters is that the high-net-worth client, and how they’re serviced, is definitely being taken to another level.

WP spoke to Andrea Baker-Nash, Family Office Liaison and Corporate Projects Manager for First Affiliated Family Office Group, an Ontario-based multi-family office in business for more than 20 years. Nash was quick to point out that a true family office is completely independent, doesn’t sell products of any kind, is fee-based, and not affiliated with any banks or other financial institutions.

First Affiliated provides each family with a “Family Prosperity Plan,” a roadmap that over time creates a legacy intended to live on for generations to come. Working with a family’s existing advisors while also integrating new specialists as needed, the firm’s goal is to be cost neutral at worst, which means any savings found whether it be in the form of time or money will be equal to or greater than the fees each family pays for First Affiliated’s services.

Most importantly, and without being clichéd, First Affiliated provides a holistic approach for its family-office clients that goes well beyond traditional wealth management and tax and legal advisory to include everything but the kitchen sink.

Mentioned in the opening, the banks are increasingly focusing on multi-family offices. WaterStreet, run by Tim Cestnick, is one of the biggest MFOs in Canada. It’s been owned by Scotiabank since 2010. The other big firm often mentioned in the press is Northwood Family Office, founded by Tom McCullough in 2003, and considered the number one independent family office in Canada. At the moment it’s a toss-up between the two sides.

While it would be nice if the independents held their ground, the U.S. experience is that the big banks are using their financial muscle to corner the market. Only time will tell if the same holds true for Canada.

Regardless, the next five years will see significant growth in family offices and that’s good news for the rich and super-rich.