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How to Build a Family Office Environment

Originally published by ThinkAdvisor [link] on February 01, 2016

Ira Walker looks for ways to re-create his service model and over the years since I first met him in 1988 he has done so to adapt to his clients' ultra-high-net-worth needs. Now as a managing director and senior portfolio manager, he is doing it again by implementing a family office style environment with his team Walker Wealth Management at UBS Private Wealth Management, a division within UBS Financial Services Inc. You can get a flavor of this service model if you visit Ira's website: http://financialservicesinc.ubs.com/team/walkerwm/

Ira's business is focused on ultra-high-net-worth (UHNW) families and institutions. There are many definitions of UHNW. The Wealth-X American Ultra-Wealth Ranking 2014-2015 Report states there are 69,560 individuals with a net worth of $30 million to $49 million.


In this article, first of a two-part series, Ira shares some of his thoughts about managing an ultra-high-net-worth clientele.

Bill: What are the biggest challenges in the ultra-high-net-worth sector of the market?

Ira: Keeping the client focused on their customized investment strategy that I have helped them create.

Every ultra-high-net-worth client has access nowadays to a wide range of firms, investment models and products. Years ago, access was difficult. Now, access is simple. You have to keep your clients focused and disciplined on their strategy. It's important that the UHNW client remain focused on the strategies that seek to protect their wealth.

Bill: What is your retention strategy?

Ira: I am communicating with my largest clients on a daily basis. I’m sending them information regarding the markets, and in some cases, I’m sending them information that I’ve vetted about their specific portfolio. I’m doing that at 6 o’clock in the morning through 9 o’clock at night. Managing UHNW clients is a 24/7 job.

Bill: So at least for some clients, you have gone to a daily communication formula, correct?

Ira: Yes. Communication, communication, communication. For instance, if a client has a fixed income portfolio and the fixed income markets are reeling like they did last summer, I’m in touch with that client regularly, guiding and directing that client and navigating that client through what's going on in the global markets.

Bill: How many people can you do this with?

Ira: You have to take the top 100 clients and be very attentive morning, noon and night. This is where a great team comes in. The team keeps the communication flowing and enables the advisor to focus on the clients and their investments, not the operations. If you want to manage money for billionaires and keep the big money coming in, you have to be extremely attentive to your top clients. And in most cases, it may be your top 25 clients.

Bill: What are you doing about new business?

Ira: It's all new money from existing clients and referrals. Clients need to understand that we are creating a family office environment, and for us to grow organically, we need them to use us exclusively for their financial needs. This does not mean clients cannot have other advisors at other firms. But it does mean we have to be aware of those assets, and in most cases, be in control of those assets

For example, we have many clients who use a commercial bank for their day-to-day operations. We are aware of that and help monitor it on a daily, weekly and monthly basis. I do not want to be in the commercial banking business, but it is essential for clients to know our team works in coordination with the clients’ entire team of advisors, assets and financial activities on their behalf.