Every Multi-Family Office will have a unique suite of offerings, however Sundial believes there are some basic “must have’s” for any MFO being considered:
Independent Advice
The advice provided to the family is always in the family's best interest. They can trust this is the case because the team works for the family – instead of for a large bank or investment firm. Having an independent team also provides access to an unlimited diversity of investments. They are not limited to what a single investment firm has approved for distribution, and they have the ability to independently evaluate new opportunities quickly. This is extremely important today as the large investment firms don’t look outside of the products that they have approved. The only products they approve are the ones that are highly scalable and that pay them the best. The niche strategies that generate the best alpha or provide the best protection against losses have limited capacity and thus can’t be used by the largest firms.
Integrated Strategy
There are no isolated decisions and every decision impacts the family’s entire net worth and taxes. The advice they need may even be beyond the capacity of any one asset management firm, therefore, they work with a well-coordinated, highly experienced team of professionals from tax, investment, insurance, estate, business, and legal disciplines. This team leverages the family’s values, vision, mission, and objectives to inform all operational and investment decisions.
Individualized Services
Avoidance of cookie-cutter options. Those seeking a family office solution won’t accept being placed into the programs that are offered on a mass scale to the average wealthy family. They want everything built specifically for them, with a unified strategy and services to achieve their vision for the family’s wealth and legacy.
A Dedicated Team
One of the main advantages of seeking a family office solution is a dedicated team that analyzes and monitors investments and is the point person for other services. Committed to Sourcing and Leveraging Best-In-Class Managers - A mix of internally managed and externally allocated strategies should be expected. Best-in-Class managers of uncorrelated returns or alpha focused strategies are often niche, with limited capacity. They also are often not available on large firm platforms.
Centralizing The Risk
Family offices consolidate the operational risk and operational management since it all goes through one channel. This helps owners of family offices make more effective decisions and meet the stated investment objectives. This also means the team is uniquely positioned to implement ongoing performance management and exercise control over operations and various providers. Thus, if an investment fails to produce the expected yield, it will be easily detected, and the mandate can be reduced or removed.
Direct Deal Capabilities
Capacity for direct deal capabilities is a critical component. Family office professionals invest time and resources in cultivating relationships and identifying and evaluating private deals and independent sponsors. The due diligence required to do this is far more involved, resource-intensive, and generally less metric-based than merely selecting a competent asset manager. Yet this is a critical aspect of operation as it enables legitimate family offices to ensure that clients are afforded real opportunities that everyone has not already passed on and that align with their objectives.
Aggregated Reporting
This is a big differentiator between the investing masses and a family office structure. All of the various investments along with their risk vectors are aggregated, categorized and are then combined into a consolidated report. This helps illuminate if multiple investment allocations are duplicative in nature, or if there are any outsized risk exposures being unintentionally taken.
.png)