What to do with significant family wealth?

All they offer me are stocks and a bunch of funds they earn an immediate commission on…

That is how one of the families that recently chose to work with our multi-family office described their experience of looking for comprehensive wealth management services. This is someone who had just sold their company and suddenly found themselves responsible for significant wealth. They were understandably concerned that they wouldn't be able to allocate their assets in a way that would prevent a combination of poor decisions and inflation from gradually eroding their wealth.

This is a typical example of a conversation we have with prospective partner families who come to us looking for something more. It is an individual or family that has accumulated or recently come into significant wealth, making its management increasingly complex. They have outgrown what traditional institutions offer, or what independent advisors serving less complex portfolios can provide.

A multi-family office is neither private banking nor standard financial advisory

Specifically, our prospective partner was frustrated that almost no one could offer access to investments in areas such as private equity, agricultural land or, a personal favorite, art. He was told that the regulatory requirements and internal policies of his current financial partners did not allow them to offer such investments, or that they were simply outside their product range.

Even though he had little interest in cryptocurrencies or venture capital, it would likely have been equally difficult to access these asset classes through his existing managers. Consequently, it was also impossible to consolidate information on all these different asset classes in one place, as he had requested at our very first meeting.

I am too big for private bankers

In other words, he had outgrown standard solutions. Sophisticated, high-net-worth investors understand that a balanced portfolio is much more than just stocks, bonds, and the occasional “fund.”

Banking institutions are, of course, doing nothing wrong; they operate within the scope of their licenses and mandates. However, we believe that for certain very wealthy individuals, it is a mistake to settle for:

• a limited, unbalanced portfolio,
• excessive concentration in a single currency or geography,
• the absence of asset classes that can contribute to the portfolio’s long-term return potential,
• the lack of coordinated oversight and a consolidated information platform,
• the absence of a comprehensive long-term strategy for the portfolio and a disciplined approach to implementing it over time.

After all, a significant family portfolio intended to last for decades cannot be properly structured in a single meeting.

A multi-family office partnership can provide an alternative

Fortunately, there are now several alternatives in the Czech market for structuring and managing portfolios based on principles used by some of the world’s wealthiest families and leading institutional investors, including university endowments, sovereign wealth funds, foundations and family offices.

You can learn more about the multi-family office concept through the links below: