The multi-family office (MFO): a one-stop solution for the high-net-worth client

Martin Graham, Chairman of the advisory board at global independent multi-family office and wealth consultancy Oracle Capital Group (orcap.co.uk) explains how they meet investment, wealth structuring, asset protection and lifestyle needs of affluent families through one, bespoke and personal service offering.

The number of high-net-worth individuals around the world is increasing despite the global economy still suffering in the aftermath of the financial crisis, and this trend is set to continue. According to a recent survey by Knight Frank, there were nearly 190,000 HNWIs (defined as individuals with next assets of over USD $30million) in the world in 2012. In Asia alone, which had approximately 44,000 HNWIs in 2012, their number will increase by a staggering 88% in the next 10 years.

These individuals and their families need a bespoke service to manage and protect their growing wealth, and to help them balance their successful business life with family life and commitments. They need a service that simplifies their lives, too.

Client-led, not product-led
The super-wealthy, just like the rest of us, have recently lost a lot of faith in financial institutions so they now increasingly turn to multi-family offices like ours. We are more in tune with their needs than traditional wealth managers such as private banks. Banks, in general, tend to sell products – that’s what drives them. The problem is these products are not always relevant to what their clients truly need.

At Oracle Capital Group, we work from a different premise – only when you really understand what your clients’ needs are, can you properly cater to these needs. It’s a listening consultancy type relationship, where we listen and learn and then try and solve the problems in our clients’ business and family lives.

Also, because the needs of the wealthy are diverse, the service offering must be diverse too, so we provide investment services, wealth management, structuring and wealth preservation, asset financing, insurance advice and legal help. Our property services include sale, acquisition and rental of premium, high-calibre properties in prime London locations. In fact, London is the place to be if you are a high-net-worth individual: according to the same recent survey, Britain’s capital is the second top city in the world by HNWI population (6,015 of the world’s HNWIs lived there in 2012), after New York. So, we help them with their relocation to London, and with their pre-immigration planning to ensure they don’t incur inadvertent and unforeseen tax liabilities when immigrating to the UK. We also help to get their children into the best private schools in the country.

Fundamentally, we provide all these services in-house. We are a one-stop-shop for everything a wealthy individual should ever need – the wealthy don’t have the time or inclination to go to 10 different places to get what they want. The services are unique, too – unique to each and every one of our clients, with whom we build very close, friendly and trusting relationships.

There’s no ‘typical’ client, but…
We built up our capabilities looking after a small number of individuals and we now leverage this to others. Historically, Oracle Capital Group has served mainly Eastern European clients – we are the largest multi-family office looking after these individuals and their families in London, overseeing the total client wealth of several billions of pounds. Now we’re looking towards the emerging wealthy classes of South East Asia.

Our clients are largely self-made people and fairly newly wealthy. Some MFOs require an HNWI to have at least £25 million in liquid assets before they take them on as a client, but we don’t operate in this way. Rather, it’s more about the right type of client, with the right background. We are very careful in client selection and spend a large amount of resource in checking that our clients are ‘legitimate’ and how they’ve made their money.
Then we take a view about how they are going to grow their wealth and how we can help them to do so.

Because of the volatile markets, many of these individuals have been focusing on preserving their wealth in the last year or two. Now they’re prepared to take more risks and we can give them investment opportunities with high absolute returns, yet at acceptable levels of risk. These investment opportunities are across many different asset classes – unlike some family offices, we are broadly focused in terms of asset structuring and management, diversifying our client’s portfolio and spreading the risk at the same time.

Cost- and time-efficiency
Some wealthy families set up private investment or single-family offices, but they end up having to outsource everything except one or two services. It’s a lot of hassle, and it costs a lot of time and money.

We can do all they need ‘under one roof’, using our considerable expertise and capability built over many years. Our services aren’t cheap, but the quality of service we offer means our clients generate better returns over time, both in terms of their wealth and in the smooth running of their lives.

Our intellectual capital – our people – ensure the quality of this service. I was Director of Markets and Head of AIM at the London Stock Exchange in the past and used to run various investment bank operations. Our in-house experts are the top talent, the crème de la crème, in the fields of investments, legal, property, insurance, tax, asset financing and wealth preservation. We combine our immense technical competence with huge, long-term client experience and with a drive to meet our clients’ every need. Also, we speak 22 languages between us – not bad for 100 staff!

Founded in 2002 and headquartered in Luxembourg, Oracle Capital Group provides comprehensive, tailored and confidential services for high-net-worth individuals and their families, including investment advisory (through their offices in Switzerland and the Bahamas), wealth structuring and asset protection, asset financing and insurance, legal case management, property development, and concierge services. Oracle Capital Group has 7 offices (London, Luxembourg, Geneva, Nassau, Moscow, Almaty and Limassol) and employs over 100 staff worldwide. www.orcap.co.uk