Some of the largest private banking arms, including Merrill Lynch and Goldman Sachs, are starting to be scrutinised by single-family offices in the US.
Many of them are beginning to consider that working with the large financial institutions is unnecessary and, at times, a hindrance.
A survey by family office group, Rothstein Kass, showed that 91% of 78 SFOs surveyed have utilised services from these large financial institutions. Of these 71 offices, around three quarters described a highly negative experience. However, the remaining offices conveyed highly positive experiences. Strangely, none of the opinions were through the middle, they were all extreme one way or the other.
Across the survey there are clear trends among the single-family offices and their reactions. The ‘best practices’ are necessary if any connection between financial institutions and SFOs are going to work out. An example of good practice involves intense profiling of all parties involved to develop specifically tailored services.
Richard Flynn, partner at Rothstein Kass, said: "In providing administrative and project management services on an outsourced basis to single-family offices, our success is based on acquiring an expansive, in-depth understanding of the people involved. Only then can we develop and deliver customised solutions."
With single-family offices expected to grow worldwide, there is very little doubt that financial institutions will look towards them for revenue.