Growing a successful boutique or family office
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According to researchers at Goldsmith’s University, it is believed that the number of family offices has doubled since 2008 in London to circa 1,000. They manage more than £700 bn of assets, and are a real force in business life. Family offices hold large equity stakes or own many well known firms, are supportive of charities, finance innovation, and create large amounts of employment.
In our experience, family offices can be very different in their composition and investment style, and it’s sometimes hard to distinguish whether a firm is a true family office or a boutique asset manager. I suppose the common factor is that they all focus on catering for the super rich, rather than the simply very wealthy. As an example, average assets under management of 157 single-family offices surveyed by Campden Wealth in 2015 was $662 million. These single family offices often face far less regulation and often are deliberately low profile. However, sometimes they want to grow and to attract other wealthy clients.
It’s at this point we are often asked to help to assist them in achieving their long-term plan through hiring experienced professionals. This gives us some insight into how firms plan for this growth and below are some of our observations on the process a firm should go through before embarking on hiring:
1. Define what sort of business you want to be
Many boutiques aren’t quite sure of their own identity and who they want to be. A lot of soul searching needs to go on as to what type of business you want to be in five years time. What clients do you want to serve and how many to do you want to work with?
2. What services will you offer
Will the business offer investment opportunities across asset classes, or be an expert in one area such as hedge funds or equities. Will advice be given on an advisory or discretionary basis. Will the business offer additional “value add” services such as concierge services.
3. Is your current team the right team to service these clients
If you are successful in attracting more ultra high net worth clients to your business, do you have the right team to provide an exceptional service? Is your service better than the firms you’re attempting to take their business away from?
4. Website and marketing materials
Even good salespeople will need strong marketing materials to assist them with the sales process. It’s often hard for family offices, as they want to retain a level of anonymity, but clients need to understand who is behind the business.
5. How long and how much are you prepared to commit to the growth phase?
Acquiring ultra high net worth clients can be slow and expensive and firms need to be understanding and committed to this.
Now is a very good time to attract talent from leading banks and fund management businesses. However, top people are often expensive and are reluctant to give up on all their perks to help someone else build a business. They need to be enticed and rewarded for their skill and experience.
Here at Fram Search, we can help clients hire Private Bankers, Portfolio Managers, Real Estate experts, Financial Planners, Advisers and specialist support staff. We can also advise on remuneration structures and the financial services employment market in general. If we can be of assistance, then please don’t hesitate to call us on 01525 864 372.
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