One of the more striking challenges for family offices is managing the plethora of advisors who serve the family but may provide conflicting or confusing advice.
To address this issue, a family office should appoint a “quarterback” to help coordinate advisors to ensure their advice supports the family’s big-picture strategies. In addition, the right quarterback can provide an overview of the office’s performance and improvement opportunities.
The right person for the quarterback role will likely depend on the family’s needs and relationships with staff members or advisors. Regardless of who performs the function, it’s vital to ensure someone is communicating with the family and other advisors to coordinate everyone’s efforts, ideas, and execution of the proposed plans. You need a quarterback who understands the game plan, can call an audible if needed, and execute the game plan with assistance from the rest of the team.
Navigating Family Office Advisor Silos to Understand the Strategy
Often, the family’s wealth advisors, attorneys, and accountants work in functional silos and may offer well-intended support and expertise that families find challenging to understand.
Family members often wonder: Do we first talk to our tax CPA or attorney about a new issue? What is the most efficient way to ensure compliance and achieve a goal? How do we fund a great idea? What should we be thinking about for next year? How do proposed tax law changes affect our strategy?
Another challenge is that most family office advisors deal with a large book of business, and carving out time to think about client needs proactively often seems like a luxury they don’t have. Some families may not even like to receive a call that can cost them money if they haven’t asked a specific question. As a result, interactions tend to be reactionary and not tactical.
In these situations, the bigger picture can be lost. Some strategies might work for the narrow sense they are created for, but may not dovetail with the family’s broader needs. One well-meaning decision can create an issue for the family’s longer-term strategy.
Even worse, each advisor may want to be the “trusted advisor” and the quarterback. But many don’t have the right lens through which to operate. If all you have is a hammer, every problem is treated like a nail. So, picking the right quarterback is equally challenging.
Finding the Right Quarterback to Lead Your Family Office Team
One might say the family patriarch or matriarch should take on the quarterback role. However, they may not know what they don’t know. They only know their circumstance and may not understand their many options.
Also, they may be getting confusing advice. How often does a friend or professional acquaintance throw out an idea in passing, but the relevance to the family might not be readily understood? A few calls and thousands of dollars later, the idea turns out irrelevant to the family. How many times do you experience this before you stop picking up the phone?
For many, the right quarterback is a critical component to managing professional advisors successfully. The best choice may be a staff member, such as the family office’s CFO. It may be one of the current advisors. The family CPA can be a good choice because he or she will have a good overall financial understanding. In many cases, the right wealth management professional can play the quarterback role if their perspective is broad enough.
Or it may be someone independent, such as a generalist who knows enough to bring the right expertise together at the right time. It can be surprising how rarely advisors meet together, so their collective expertise isn’t leveraged.
In conjunction with the family principals, a designated quarterback can bring the advisors together consistently to coordinate their advice and ensure everyone’s ideas are serving the family’s broader purpose, philosophies, and interests.
If you need help identifying the best quarterback for your family’s needs, contact us. Our experienced family office team can discuss your goals, current staffing, and advisors and help you identify the best candidate.
