Market Uncertainty and Desire to Share Resources are Driving Expansion of Multifamily...

Market Uncertainty and Desire to Share Resources are Driving Expansion of
Multifamily Office Sector, According to New Survey Report by Rothstein Kass

Investment Advisory Firms Enhance Services to Attract High-Net-Worth Families,
Grow Profitability

NEW YORK, May 11 /PRNewswire/ -- More than 94% of investment advisory firms
reported that the desire to do a better job for clients rates as a primary
motivation for becoming a multifamily office, according to "The Multifamily
Office Solution," the latest report on industry trends released today by
Rothstein Kass (www.rkco.com). The report features the findings of a survey of
over 100 investments firms identifying themselves as multifamily offices
(MFOs). Nearly 86 percent of respondents suggested that being more profitable
ranked as an important catalyst for change, as firms enhance and reposition
services to attract high-net-worth families to the multifamily office
structure. A flash survey of 110 high-net-worth investors included in the
report offers validation for this strategy, with 40 percent of respondents
identifying multifamily offices as a likely destination for assets.

In part due to the vast array of financial management tools available to them,
high-net worth families generally enjoyed consistently strong investment
returns in the years leading up to the market meltdown. In some instances, the
pursuit of wealth creation resulted in a diminished near-term focus on wealth
preservation and legacy concerns. More recently, declining net-worth and
persistent market volatility have compelled some wealthy families to reassess
long-term priorities, increasing demand for investment advisors that treat
investment and advanced planning as unified functions," said Rick Flynn, a
Principal in the Family Office Group at Rothstein Kass. "Our research shows
that MFOs are a likely destination for assets taken from a primary advisor,
suggesting that investors are more cognizant of the role an efficiently
structured MFO can play in the due diligence process. This creates an
opportunity for alternative investment firms to work in tandem with MFO firms
to provide the greater transparency that high-net worth investors demand."

Research for "The Multifamily Office Solution" was conducted by Russ Alan
Prince, a leading authority and counselor on private wealth, and Hannah Shaw
Grove, a widely recognized expert on behaviors and finances of wealthy
individuals. The survey was based on interviews with 103 investment firms that
identify themselves as multifamily offices. The sample was roughly split
between U.S. and non-U.S. entities, with average assets under management just
under $1 billion. Context for the findings was provided by the seasoned
financial professionals and certified public accountants of the Rothstein Kass
Family Office Group.

"Inclusive service offerings and the capacity for sharing of resources are
quickly establishing MFOs as a preferred structure among the ultra-wealthy.
However, the MFOs that will succeed over the long-term recognize that they are
essentially managing a business -- with a unique brand encompassing a broad
array of distinct but related interests. Integrating these aspects requires a
talented Chief Operating Officer who can coordinate resources to enable
clients to spend more time enjoying the benefits of their wealth," said Mr.
Flynn. "In our latest report, we examine the motivations and profit centers of
the multifamily office sector to provide insight into how this dynamic segment
is evolving."

"The Multifamily Office Solution is available online at [link]. Among notable
findings:

-- Motivations to Become a MFO
-- Do a better job for clients (94.2%)
-- Be more profitable (85.9%)
-- Be more competitive (78.7%)
-- Attract wealthier clients (69.1%)
-- Close business faster (36.5%)

-- Financial Services & Products
-- 100% asset allocation (100% internal)
-- 95% advanced planning services (98% in-house)
-- 30% merchant / investment banking experience (83.9% joint-venture
with banking firm)
-- 29.1% credit (76.7% joint venture with a bank)
-- 15.5% life insurance (87.5% joint venture with insurance provider)

-- Administrative Services
-- 88% Data aggregation (53% outsourced)
-- 86% Bill Paying (68% internal)
-- 85% Coordination / preparation of tax returns (68% internal)

-- Lifestyle Services
-- 60% Philanthropic training (64% outsourced provider)
-- 47% Formal family education (88% outsourced)
-- 39% Concierge (98% outsourced provider)

"Asset allocation is a high-margin business and provides the foundation for
advanced planning functions from estate planning to philanthropic involvement.
As a result, all multifamily offices offer asset allocation through internal
resources. Beyond that, there is little standardization among service
providers, particularly in the area of 'lifestyle services,'" said Mark
Hutchison, C.P.A., a tax Principal based in Rothstein Kass' Beverly Hills
office. "While investment performance remains a key differentiator,
generational wealth management is becoming a more important consideration.
Currently, services such as family educational initiatives and philanthropic
training are commonly outsourced to qualified third parties. However, the
quality of service provided in these areas has the potential to strengthen or
conversely, undermine the entire client relationship. The appeal of the
multifamily office derives from the ability to unify diverse but related
aspects of wealth management through a single provider. In selecting
third-party providers, MFOs should team with firms that support seamless
integration and offer advice and services that are consistent with defined
client objectives."

"Substantively all MFOs offer estate planning services through in-house
capacity. This reflects the clear and unbreakable link between asset
allocation and effective long-term planning in the generational transfer of
wealth. Family Offices add value by helping clients keep ahead of regulatory
and legislative developments that influence multi-generational planning such
as the tax treatment on capital gains and existing trusts," said Alan Kufeld,
C.P.A., a Tax Principal in the Rothstein Kass Family Office Group.

About Rothstein Kass:

Rothstein Kass is a premier public accounting firm that has served privately
held and publicly traded companies, individuals, and families for 50 years.
Rothstein Kass was recently ranked as the top CPA firm to the alternative
investment industry by Alpha Magazine. The Rothstein Kass Financial Services
Group provides services to many high-profile and respected clients including
hedge funds, fund of funds, broker-dealers and registered investment advisors.
Our Commercial Services Group provides organizations, including private equity
and venture capital funds, as well as individuals and families with essential
and complementary professional services.

A division of the Rothstein Kass Advisory Services Group, the Rothstein Kass
Family Office Group offers a wide range of financial, wealth planning and
lifestyle management services to family offices and high-net-worth
individuals. Composed of seasoned financial professionals and certified public
accountants, the Family Office Group applies proven expertise with the utmost
discretion and attention. Clients include business owners and members of the
financial services, entertainment and sports communities.

The Rothstein Kass Advisory Services Group consists of five distinct but
interrelated practice areas including Corporate Advisory Services, Financial
Advisory Services, Transactions Advisory Services, Insurance and Risk
Management and the Family Office Group. The Rothstein Kass Family Office Group
offers a wide range of financial, wealth planning and lifestyle management
services to family offices and high-net-worth individuals.

Rothstein Kass has offices in California, Colorado, New Jersey, New York,
Texas and the Cayman Islands, each of which has received recognition as a
"Best Place to Work."

About the Authors:

Russ Alan Prince is the world's leading authority on private wealth, the
author of 40 books on the topic, and a highly-sought counselor to families
with significant global resources, and their advisors. He is co-author of
Fortune's Fortress: A Primer on Wealth Preservation for Hedge Fund
Professionals.

www.RussAlanPrince.com

Hannah Shaw Grove is a widely recognized author, columnist, speaker and an
expert on the mindset, behaviors, concerns, preferences and finances of
high-net-worth individuals. She is co-author of Inside the Family Office:
Managing the Fortunes of the Exceptionally Wealthy.

www.HSGrove.com

SOURCE Rothstein Kass

Rob Solomon of Rothstein Kass, +1-917-438-3918, rsolomon@rkco.com