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Blog Three60’s Family Office Service

June 06, 2024

The History of a Family Office.

The concept of a family office traces its roots back to the 6th century when a majordomo (Chief of the House) would manage a noble family’s wealth. A more modern understanding began with the Rockefeller family office, established in 1882. Over the past 30 years, family offices have surged in importance among wealthy families, as growing wealth and complexity created the need for dedicated management and oversight. Trusted advisors, like lawyers or investment managers, were enlisted to handle various financial aspects, from investments to wealth transition. As the family’s demands grew, additional staff were hired, leading to the family office model we know today.

What is the Difference Between a Single-Family Office and a Multi-Family Office?

Single-family offices cater exclusively to one affluent family, offering highly personalized services tailored to their unique financial needs and goals. Typically, families with more complex situations, having a net worth of $500 million or more, set up single-family offices and are solely responsible for the fees. Over time, this service became attractive to smaller families (with a net worth of $10 million to $500 million), who pooled resources to receive similar services under a ‘shared’ structure. These families didn’t need the full set of services all the time, and through the multi-family office approach, they could achieve their objectives with reduced costs.

What Types of Families Would Benefit from Three60’s Family Office?

Families who would benefit from Three60’s Family Office typically seek the following:

  • Independent and objective financial advice.
  • A proactive, holistic approach to their finances, integrating estate and tax planning, investment, business, and philanthropic goals.
  • Strategies successfully implemented for other families in similar situations.
  • A team of planners with diverse backgrounds and expertise.
  • A sounding board for ideas and decisions.
  • Access to a vetted network of other professional advisors.
  • Peace of mind knowing their team of planners has a finger on the pulse of their planning.
  • Independent investment management from top firms in Canada.
  • Communication and coordination with other professionals and advisors.

In our experience, families with a net worth of $8 – $10 million and up, looking for a proactive and holistic approach to their planning, would benefit from working with Three60’s Family Office.

How Does Working with Three60’s Family Office Differ from the Traditional Client/Advisor Relationship?

In a traditional client/advisor relationship, the client typically has an investment advisor, an accountant, and a lawyer, each focused on their area of expertise. Financial planning is sometimes offered through the investment firm’s internal planners, accessed via the investment advisor. It is the client’s responsibility to ensure all aspects of their finances work seamlessly together. This can be challenging due to the client’s busy schedule, lack of understanding of complex financial issues, and emotional ties to decisions. Decisions are often made in isolation, without a full-scope understanding of the situation, leading to a reactive approach and new problems that often go unnoticed until it’s too late.

Under Three60’s Family Office model, clients delegate planning and investment management to a team of experienced professional planners. This team ensures all aspects of planning and investment management are integrated, proactively communicating and coordinating with other professional advisors. All decisions are made collaboratively, involving multiple perspectives. With access to a vetted network of professional advisors, Three60 ensures a diverse set of skills can be tapped into as needed. This proactive, integrated approach relieves clients of the stress and pressure of managing their planning on their own.

How Does Investment Management Differ with Three60’s Family Office from the Traditional Client/Advisor Relationship?

In a traditional client/advisor relationship, the advisor manages the client’s portfolio either through their parent firm’s products or by creating a portfolio using ETFs, mutual funds, stocks, and bonds. The client pays the advisor’s firm a fee based on a percentage of assets managed for ‘portfolio building and financial planning’ and an embedded fee for the underlying investments. Financial planning is typically offered through the firm’s internal planners, leading to a disconnect between financial planning and investment management, resulting in inefficiencies and missed opportunities.

Advisors building portfolios should have the proper industry designations, such as CIM or CFA, with CFA being preferred, but this is often not the case. Clients must trust their advisor’s portfolio-building ability, but they have no way of knowing how well their portfolio performs compared to others.

Three60’s Family Office provides independent investment management through a sub-advisory model, partnering with top investment management firms in Canada. We align clients with the firm that best fits their situation, maintaining our independence and transparency. Monitoring portfolio performance across multiple firms, we can recommend changes if needed. Our independence ensures our interests align with our clients, and we do not receive commissions or referral fees from sub-advisory firms. Both Three60 and the investment management firm charge a fee based on the assets managed.

As a Business Owner, Could I Benefit from Working with Three60’s Family Office?

Business owners often lack the time or expertise to manage all their planning. Financial decisions can be challenging, especially outside their area of expertise. Three60’s Family Office provides a team of professional planners to guide clients through financial decisions. This integrated approach allows business owners to focus on other important areas of their lives.

How can Three60’s Family Office Help me to Transition my Business?

Transitioning out of a business requires the expertise and integration of many professional advisors. Three60’s Family Office can help by bringing a team of advisors together and managing all required planning. This integrated approach ensures a smooth transition, relieving stress and reducing the time commitment involved.

Can I still use my Accountant and Lawyer if I Move to Three60’s Family Office?

Three60’s role is to understand the family’s goals and ensure they are accomplished effectively and efficiently. We play a lead, proactive role, bringing in existing advisors as needed, or additional advisors when required. Three60 acts as a generalist, coordinating all advisors to achieve the client’s outcomes.

Conclusion:

Three60’s Family Office is for families seeking to maximize their life’s work and are tired of the traditional approach to planning and investment management.


Authored by: Jason Nagel, Director of Advanced Planning at Three60 Wealth