Multi-Family Office Model Grows With Investors' Needs

As an investor's wealth grows, so grows the complexity of their assets and their need for comprehensive advice across a broad spectrum.

More are seeking the multi-family office model of wealth management -- a client-focused approach that takes into account all assets, interests and idiosyncrasies. MFOs manage business, finance and life for clients with a wealth advisor at the center of a cadre of trusted advisors.

The MFO model oversees not only cash, stocks, and bonds, but illiquid investments such as property, businesses, alternative investments like art or classic cars, and every financial consideration.

That's why Dignitas launched Wealth Design(TM), a holistic approach for assets from $3 million to $30 million that manages risk and opportunity for each client's objectives over varied time frames.

"I have yet to meet a successful investor who wakes up concerned if their emerging market stocks are in line with Wall Street consensus. Financial services firms aren't focused on the real-world issues that successful families face,'' said Nicholas Delgado, Chief Wealth Officer of Dignitas, a certified financial planner who recently left Merrill Lynch to found the boutique MFO.

"Our families are looking for perspective on topics that don't have ticker symbols, but have significant impact on their lives and balance sheets."

Dignitas put assets into three categories, each with a different approach: protective assets include a home, cash, valuable possessions and insurance; market assets are taxable investments, retirement accounts, trust and charitable strategies, and so-called aspirational assets include additional real estate and privately held interests.

"An ongoing analysis of real estate holdings is as important as monitoring a capital portfolio,'' notes Haydee Caldero, co-founder of Dignitas, previously with Eastdil Secured where she advised on more than $5 billion in trophy commercial real estate. "When we talk to about our approach clients understand we are integrating the most complex aspects of their balance sheet into a holistic plan.''

While Dignitas creates custom plans for each client, there is a common draw to the growing industry. (MFOs increased clients by 8.6 percent on average while large bank wirehouses hemorrhaged business, according to a 2008 Family Wealth Alliance survey.)

MFOs are independent and loyal only to the client, while a brokerage's first goal is to sell products.

"You can't have a business model that tries to examine an individual client's specific needs and then sells them the same investments they push to everyone else,'' Delgado said.