In the past, the research team of familyofficehub.io has published numerous articles on the importance of single and multi family offices. The family-related asset managers offer the possibility of an investment strategy tailored to personal needs. In addition, family offices provide numerous services that relieve tedious work and provide security. These include risk analysis, legal and tax advice as well as support with administrative tasks. However, when we had a deeper look at “usual” asset managers in Europe, we noticed an interesting development in this context. More and more classic asset managers are providing family office services as well and are more and more focusing on these services. In the following article we would like to take a closer look at this development and examine possible explanations. The core question is: Are asset managers the new Multi Family Offices?
Wealthy families are no longer exclusively supported by private banks
A general trend is the gradual departure of very wealthy customers from private banks. This phenomenon has been observed for a number of years and is one of the causes of the disappearance of some long-established financial institutions in recent years. This applies to Germany and many other countries such as Switzerland, which for many years was regarded as the most important market for private banks in Europe. But why do High Net Worth Individuals (HNWI) rely less on the banks with which they have always had close ties? The main reason lies in the way private banks can respond to their clients’ personal needs. The larger a bank becomes, the more difficult it becomes to provide close support. Some asset managers and (multi) family offices are “better positioned” in this regard. Another reason is the relatively restricted investment focus of private banks. In alternative asset classes such as real estate or private equity, some banks’ wealth management departments have only been able to provide moderate assistance in the past. Some family offices and asset managers are in a much better position here. It is not uncommon for proven real estate professionals to work in these offices, scoring points with real expertise and valuable contacts. The focus of asset management on family office services is thus first and foremost based on the clientele, some of whom are becoming much wealthier and attach importance to truly individual support.
Asset management companies discover new sales potential and expand their offering
The services of (Multi) Family Offices are a useful addition to traditional asset management. It is therefore only logical that more and more asset managers are opening up new sources of income by offering exclusive services for HNWIs. A wide range of possible remuneration models can be used to ensure ongoing and regular income. This planning capability is of great importance in any industry and provides a certain amount of leeway. Asset managers with integrated family office services attract new clients and increase their attractiveness at the market. In this way, (multi) family office services can be evaluated as a differentiating feature. It should be noted here that some asset managers offer family office services without explicitly advertising them. It is well known that secrecy is everything in the environment of financial professionals.
Many Multi Family Offices have emerged from an asset management business
Finally, the question arises as to whether the observed phenomenon is at all a new trend. Have asset managers not always expanded their range of services? Have family office services always been the logical next step for growing asset managers? The short answer to this question is: yes. In fact, many multi-family offices in Europe have emerged from asset management. The focus on a particularly wealthy clientele has always been attractive. However, in recent months and years more and more asset managers seem to be focusing on very wealthy families and private individuals. The research team of familyofficehub.io will continue to keep a close eye on the industry in Switzerland, Germany, France and Europe as a whole to keep you informed.
Picture source: Allie Smith
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