accounting firms have an opportunity, but they’ll need to loop in other experts.
by russ alan prince
single-family offices are proving to be the preferred way the super-rich (net worth = us $500 million or more) optimize their financial and personal lives. the power of the family office model has become well recognized by wealthy individuals and families who are far from super-rich. these wealthy individuals and families are gravitating to family office practices at an exponentially greater rate.
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in a 2018 study of 264 wealthy individuals, nearly three-quarters of them reported that they want the same advantages single-family offices can provide the super-rich. nearly nine out of 10 wealthy individuals with a net worth greater than us $30 million, eight out of 10 wealthy individuals with a net worth between us $10 million and us $30 million, and about three out of five wealthy individuals with a net worth between us $1 million and us $10 million are strongly attracted to the family office model.
the demand for meaningful cohesive solutions that are characteristic of family office practices is unquestionably present. to meet the burgeoning demand, a diverse array of professionals – including accountants – are establishing family office practices. not only are more and more accounting firms embracing family office practices to serve the wealthy, but the financial rewards to the accounting firm from a high-quality family office practice are also commonly exceptional.
from greater per-client revenues to a steady flow of new wealthy clients, accounting firm family office practices can generate more profits than probably any other practice within the firm. to make this happen, the accounting firm has to build an elite team of professionals from within and external to the accounting firm.
for accountants to capably deliver the range of expertise the wealthy – and more so, the ultrawealthy – are looking for, they have to expand beyond their core services such as attest services. accountants who have the most successful family office practices tend to think in terms of what their wealthy clients need and want. the focus is on outcomes as opposed to services and products. the way to make an accounting firm’s family office practice work well is to develop and nurture an elite team composed of various experts from different, often complementary, disciplines.
for most accountants, putting an elite team together takes focus, time and often considerable effort. making sure they can bring to a wealthy client the very best answers means having to be working with a team of extremely talented professionals. at many accounting firms with top-notch family office practices, it has taken a good amount of time and considerable effort to find the right set of diverse professionals who are not only very, very good at what they do but put the client’s needs and wants first and foremost and are willing and able to work as a team.
elite teams – while essential – are not enough to establish a high-quality accounting firm family office practice. critical is the ability to develop a deep understanding of wealthy clients. consequently, a well-structured discovery process is essential. it is the most effective way to truly learn the self-interests of clients. only by asking thoughtful questions and impactfully listening can the accountants in the firm’s family office practice learn what really matters to their wealthy clients and what is of lesser importance. because of discovery coupled with the diverse capabilities of a family office practice, accountants are best able to develop solutions that can deliver exceptional value to the wealthy.
accountants with family office practices need to be aware of a growing trend. as many accountants recognize the business development power of claiming to have family office practices, the wealthy have become more circumspect. to better address the many family office pretenders and identify the accounting firms that can deliver superior results, the wealthy are increasingly becoming better consumers of high-end professional services.