The Three Drivers of ALL High-Performing Family Offices

By Cliff Oberlin, Chairman and CEO, Oberlin Wealth Management

Family offices are quickly becoming the preferred way the wealthy, and even more so the very wealthy, are managing their monies and a good portion of their lives. The reasoning is simple: family offices are delivering superior results and a better experience than the alternatives.

The complication is that to get the superior results and better experience families have to work with high-performing family offices. Clearly, working with a badly operating family office is regularly unproductive. All high-performing family offices, including single-family offices, multi-family offices, and the newer variation of virtual family offices, rely on three drivers of exceptionalism.

According to Russ Alan Prince, one of the foremost authorities on family offices and co-author of Your Optimal Financial World: How Driven Entrepreneurs Benefit from High-Preforming Virtual Family Offices,

“The three drivers of all high-performing family offices are the human element, a cohesive team, and systematic processes. As high-performing family offices are able to provide all the expertise any particular individual or family requires, it’s all about understanding what is needed and wanted, having the network to get whatever is required, and doing so methodically.”

The human element is one of the most critical drivers of value creation in the entire private wealth industry. To achieve superior results, the professionals in the family office must truly understand the family members – their goals and objective as well as their concerns and anxieties.

Another driver of exceptionalism is a cohesive team, which are the elite professionals working in a unified manner on behalf of the family. Because of the coordination between the professionals, synergies among the services and products being provided are created that result in better outcomes while lowering costs.

The third driver is systematic processes. Instead of addressing a family’s financial or other challenges on an erratic basis, high-performing family offices use proven methodologies to help ensure they are delivering top-of-the-line results. One example of this is stress testing.

“The most effective single-family offices make appropriate use of stress testing,” explains Peter Sasaki, Managing Member of SDS family Office and co-author of Maximizing Your Single-Family Office: Leveraging the Power of Outsourcing and Stress Testing. “This is where they critically evaluate what a person or family has done to date to make sure it is going to get them the results they’re looking for. When done well, stress testing also finds if there are any meaningful opportunities or wealth management strategies that have been overlooked.”

When family offices are adept with the three drivers, the families they serve benefit enormously. What is important is when a family decides on a specific type of family office that family is making sure these three drivers are core to its operations.