Blackhorn Wealth Management

What is Multi Family Office?

As stakeholders in the private banking industry, Multi-Family Office can serve as a third-party platform and a team of investment professionals for high-net-worth individuals (HNWI) and address clients’ concerns for wealth management, saving them a considerable amount of time and energy in dealing with financial institutions. A Multi-Family Office will offer a hand to a client in opening an account with a custodian bank, mainly a private bank, in which assets will be injected. The client will grant the Multi-Family Office authority and power of attorney as a third party to represent them to manage the investment portfolio and asset allocation. While the assets remain in the account in the client’s name, the Multi-Family Office will assist the client to manage their assets. In short, Multi-Family Office rely on private banking as a prop to offer the service of a private wealth manager that is far more bespoke and independent.
Ultra-high-net-worth (UHNW) clients are starting to allocate assets globally, set up family trusts, and plan to pass on their wealth. It is the best time to pursue these in parallel with Multi-Family Office, that is, to look for institutional third-party investment managers who have sophisticated asset management capabilities to manage their investment.

The Origin of Multi-Family Office 

Multi-Family Office is not popular in Asia, despite being well established in Europe and the USA in the last decade. Originated in Europe in the 1990s, when some bankers branched out from private banks, Multi-Family Office provided higher-quality services to UHNW customers in the capacity of an individual or the member of a team. With their professional insights and experiences, Multi-Family Office have expanded their services into Europe, America and Asia, and their capabilities in different fields have surpassed traditional private banks. According to Asian Private Banker’s 2018 IAM Report, Hong Kong and Singapore are now home to some 160 Multi-Family Office/EAMs, with a total AUM of approximately US$91.5 billion and a total market share of 5.5%. It is estimated that in the next five years, the AUM by Multi-Family Office/EAMs in these two regions will exceed 10% of the overall asset management market.

Having been used by families in Europe to the present, Multi-Family Office continues to possess the crown jewel of independence and objectivity. They make their mark by maintaining a solid investment style for giant family funds and the mid-to-high end rich, and make possible the establishment and enrichment of their family offices.

As very sophisticated investors, customers of private banks have had increasingly demanding expectations and requirements for private banking services. In particular, many of them have been UHNW customers of several private banks for many years. They have sky-high limit of expectations in terms of high-quality consultative services and personalised solutions, and a new mode of private banking is starting to gain traction among the customers.

To establish an external asset management platform for a private bank is to offer customers-oriented services by coordinating asset custodian services from various private banks, and innovatively introducing the investment banking function to deliver to every customer a unique and personalised solution.

Instead of hard-selling, Multi-Family Office operates under the customer-centered structure that uses the leverage of the most efficient team of professionals, including Multi-Family Office’s private banking team, who will act for customers as the sole contact point of all services to communicate with a myriad of private and investment banks. On top of remaining independent in giving professional advice, Multi-Family Office observes and complies with an extremely high degree of confidentiality and privacy, maintaining a stable working relationship with customers. Building on the back of all this, over time Multi-Family Office have attained achievements by offering their family dedicated services, such as managing to achieve sustainable business and wealth, family inheritance, tax planning, family trusts, offshore cross-border asset allocation, charitable funds, family office establishment, just to name a few. 

Private Banking Service - Multi-Family Office - Product Information

Characteristics of different accounts

Different types of accounts are available for the needs of our customers

Hong Kong Based Singapore Based

1.    Asia Offshore Asset Management Center
2.    Asia Time Zone
3.    Money Transactions Are Available
4.    Lowest Handling Charges

1.     Asia Offshore Asset Management Center
2.    Asia Time Zone
3.    Estate Tax Free
4.    Lower Handling Charges

Comparison Between Private Banking Platform and Prestige Account in Retail Banking

Private Banking Platform Prestige Account in Retail Banking

Target Client

Client with net worth no less than USD 1,000,000.

Client with net worth over HKD 1,000,000 only.

Privacy

High level of privacy with information can be accessed by limited staff.

Lower level of Privacy. Client information is easily accessed by bank staff and telemarketer.

Service

Personal services are available. Each account manager only serves no more than 50 clients.

Served with tailored financial solutions.

Only general service can be provided with each account manager need to serve up to 300 to 700 clients.

Product Type and Pricing

Global investments are available within a one-stop diversified investment platform.

Institutional pricings are available.

Sales oriented with limited products are available.

Retail pricing only, relative expensive.

Market Research

Daily market analysis and investment advice are available.

Lack of research and analysis support.

Multi-Family Office Traditional Private Bank

Assurance of independence as client advisors are not under pressure to meet different "product selling targets", which eliminate potential conflict of interest of having to product push for inhouse investments

Client advisors are paid through commission on additional products and revenue generation from client's asset. This becomes their major KPI

Highly flexible and personalized client service to a wide range of products and services

Highly flexible and personalized client service to a wide range of products and services

Client assets are custodized at multiple banks, the Multi-Family Office company manages client assets

Client assets held at the respective bank

Experienced client advisors who can also act as a "gatekeeper" with the ability to "shop around" and compare prices across different brokers on the same product, and choosing the suitable custodian bank for the client

Flexibility is limited to the respective bank's offering

Client advisors can recommend clients to different banks according to their needs (different banks have different strengths)

Client advisors are limited to services and pricing within their particular bank

Clients are able to diversify and consolidate their wealth (many custodian banks but Multi-Family Office can oversee them as one portfolio)

Client advisors are limited in terms of product selection and asset allocation depends on their traditional private bank

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