Key Takeaways
- • Modus News founder Michael Thrasher says his outlet will use the term 'MFO' 'rarely or never again', arguing that firms charging fees for investment management and financial planning are private wealth management firms, not family offices.
- • Gilles Erulin, formerly of Financière Pinault and now with Westwick Partners, says that a family office billing fixed costs is an MFO, while one billing in basis points of AuM is an asset manager.
- • John Russo of LS Private warns that abandoning the term would be an 'overcorrection', blaming private banks and wealth managers for adopting the label because it sounds more exclusive than 'private client'.
- • Rupert Phelps favours 'private investment office' for commercial bespoke firms and 'co-operative family office' for groups of three or four families sharing overheads.
- • Capital Generation Partners (CapGen), with $5 billion AuM and 42 clients, illustrates how the term's boundaries blur in practice.
Summary
The term 'multi-family office' (MFO), long used in wealth management circles, is facing calls to be retired. Michael Thrasher, founder and editor of the family office newsletter Modus News, announced in a LinkedIn post that his outlet would use 'MFO' 'rarely or never again', writing that firms charging clients fees for investment management and financial planning are private wealth management firms, while non-commercial organisations serving one or more families are family offices. He said the term has 'lost meaning because of how it's leveraged in marketing'.
Gilles Erulin, who spent 26 years at Financière Pinault before founding consultancy Westwick Partners in 2013, offered a practical test: 'The minute you are on a percentage basis of AuM, you become an asset manager.' He estimated that a single-family office typically costs around 0.5-1 per cent of AuM, and argued that banks and asset managers, while adapting well to UHNW family needs, remain costly. He suggested a billion-dollar office should be runnable for about 50 basis points.
John Russo, managing director of LS Private, the family office arm of Lawrence Stephens, told Spear's that abandoning the term would be an overcorrection. He said the real problem is wealth managers adopting the label because it sounds more exclusive than 'private client', and that many investment managers have repositioned themselves as MFOs while doing only investment wealth management. He added that families are increasingly leaving banks for boutique solutions, citing the difficulty of being a trusted adviser while selling financial products.
Rupert Phelps, an adviser to single-family offices and a member of the Spear's Awards judging panel, called Thrasher's post 'a fair piece of scrutiny'. He favours 'private investment office' for commercial bespoke firms and 'co-operative family office' for arrangements among three or four families that share overheads without commercial growth aims.
The boundaries remain unclear in practice. Charlotte Thorne of Capital Generation Partners (CapGen), co-founded in 2006 with Ian Barnard and Khaled Said, said the MFO term implies a family-owned organisation aiming to defray costs across families, a 'perfectly legitimate approach'. CapGen has grown from 22 to 42 clients over five years and manages $5 billion AuM. Its roots lie in Said Holdings, a single-family office started by Wafic Said. Corient's acquisition of Stonehage Fleming, which Corient described as the 'world's largest non-bank wealth manager and multi-family office', with assets surpassing $500 billion, shows the term's continued commercial use.
Gilles Erulin, who spent 26 years at Financière Pinault before founding consultancy Westwick Partners in 2013, offered a practical test: 'The minute you are on a percentage basis of AuM, you become an asset manager.' He estimated that a single-family office typically costs around 0.5-1 per cent of AuM, and argued that banks and asset managers, while adapting well to UHNW family needs, remain costly. He suggested a billion-dollar office should be runnable for about 50 basis points.
John Russo, managing director of LS Private, the family office arm of Lawrence Stephens, told Spear's that abandoning the term would be an overcorrection. He said the real problem is wealth managers adopting the label because it sounds more exclusive than 'private client', and that many investment managers have repositioned themselves as MFOs while doing only investment wealth management. He added that families are increasingly leaving banks for boutique solutions, citing the difficulty of being a trusted adviser while selling financial products.
Rupert Phelps, an adviser to single-family offices and a member of the Spear's Awards judging panel, called Thrasher's post 'a fair piece of scrutiny'. He favours 'private investment office' for commercial bespoke firms and 'co-operative family office' for arrangements among three or four families that share overheads without commercial growth aims.
The boundaries remain unclear in practice. Charlotte Thorne of Capital Generation Partners (CapGen), co-founded in 2006 with Ian Barnard and Khaled Said, said the MFO term implies a family-owned organisation aiming to defray costs across families, a 'perfectly legitimate approach'. CapGen has grown from 22 to 42 clients over five years and manages $5 billion AuM. Its roots lie in Said Holdings, a single-family office started by Wafic Said. Corient's acquisition of Stonehage Fleming, which Corient described as the 'world's largest non-bank wealth manager and multi-family office', with assets surpassing $500 billion, shows the term's continued commercial use.
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