"_______ is so good, you would be irresponsible not to be a member."

An open architecture multi-family office is so good, you would be irresponsible not to be a member, if you meet the criteria.

"What the heck is that?" you might ask, and rightfully so.

A family office is a company that runs all things related to the estate of a high net worth family.

This includes:

• Investments

  • Portfolio/asset allocation

  • Deal flow

  • Diligence

  • Negotiation of fees

  • Reporting via live dashboard

  • Cashflow management

  • Reinvestment of distributions

• Tax planning

• Trust and estate planning

• Bill pay

• Administration

• Back office

• Alliances

The benefits to the family are many-fold, but the highlights are:

• Centralized, business-like organization of the estate

• Tax-aware investing that keeps the most money in the family's pocket

• Access to the most elite, usually private, investments with the lowest fees

  • Exponentially scaled deal flow and diligence

• Access to the best advisors across many disciplines, aligned with the family

The Multi-Family Office, or MFO, is (almost always) the best solution to provide these benefits for a family without having to build a Family Office from scratch.

A wealthy family can "plug in" to a platform run by either

• a wirehouse (Goldman Sachs Ayco, JP Morgan et al),

• a trust company (Bessemer Trust Co, etc),

• an accounting-style firm (Arlington Family Offices comes to mind),

• or another wealthy family who built something for themselves and is now sharing their personal platform.

There are plusses and minuses to each style of MFO, but in order to select the right one, the family needs to be aware of the possible pitfalls:

• Conflicts of interest - is the MFO incentivized to sell you things you may not need or may not be the best option available?

• Echo-chamber insulation and groupthink within the MFO preventing innovation, blocking access to the best ideas

• Chaining the family to advisors who work for the MFO, who may not be the best of breed

The solution to these issues is something called "pure open architecture," which many firms say they employ but few truly do.

That creates a situation where the MFO is aligned with the family, recommending the best possible ideas and advisors, and helping to execute those ideas, but not selling anything to the family besides their advice.

No products, no time in the form of billable hours.

This is also a situation where there are some advisors that sit in-house, but they are generalists. The specialists are subcontracted out, fees are limited because of economies of scale and good project management, and only the best in the country/world are used.

What I have just described is the coming revolution in estate management.

As Jeff Bezos says, "Amazon Prime is so good, you would be irresponsible not to be a member."

An open architecture MFO is so good, you would be irresponsible not to be a member, if you meet the criteria.