A backlash may be brewing against multi-family offices – not what they do, but what they’re called.

Some firms are deliberately avoiding calling themselves a multi-family office, and an influential industry association is preparing to release a white paper recommending that firms drop the label.

When industry veterans Steve Braverman and Allan Zachariah officially launched their new firm, Pathstone Family Office, last week, they pointedly described it as “a single family office for multiple clients.”

“There’s quite a bit of noise about what a multi-family office is and what it does,” said Zachariah, a former managing director at Harris myCFO. “We wanted to separate ourselves from the noise.”

In Marin County, California, Springcreek Advisors, a traditional single family office is adding outside families, but doesn’t want to be called a multi-family office.

“We don’t like the multifamily office label and connotations,” said chief executive Bradley Fisher.

Last month Chicago-based Family Office Exchange presented a research paper at its annual Wealth Advisor Forum recommending that firms use the term “family wealth management” instead of “multi-family office.”

“The challenge now being faced by providers in the market is the need to  use 15 minutes of a precious one-hour time frame with a prospective client to discuss a definition rather than to understand their needs,” said FOX president John Benevides.

Still a usefull label?

The term “multi-family office” has been adopted so quickly and broadly that its usefulness is now being called into question,  Benevides said.

The term has become so ubiquitous, he continued, that it now borders on  being deceptive, in addition to being used for “ill purposes.”

The FOX research paper, “Standing Out From the Crowd: Strategies  for Marketing, Positioning and Leveraging Networks,”  is set to be  published  and released in September.

It turns out established mult-ifamily offices aren’t so crazy about the label either.

“I never liked the term,” said Leslie Voth, president and chief operating officer of Pitcairn. “It’s industry jargon and families don’t understand it.”

“Too many firms are now using the term  indiscriminately to “market themselves to the high end of the market,” Voth added.

“There’s a big difference between firms using the term ‘family office’ and those truly delivering it,” she said.

A true family office, Voth said, “has the ability to implement and coordinate for the family beyond traditional wealth management.”

Pitcairn, she said, prefers to describe itself as delivering “family office services.”

Healthy Debate

The debate over what to call firms catering to wealthy families is a healthy one for the industry, say industry consultants.

“There are a lot of internal models developing,” said Natasha Pearl, partner in the consulting firm SFO Advisor Select. “The term ‘multi-family office’ is so bewildering both to clients and within the industry that we do see more firms deciding that they are not MFOs.”

“The term ‘multi-family office’ was never truly defined,” said Patricia Angus, chief executive of New York-based Angus Advisory Group, a family governance and philanthropic consultant. “It’s used by so many organizations for so many different things. The trend towards shifting to a different term makes sense, but a new term hasn’t quite emerged yet.”

“As firms go through the process of defining themselves,” Angus said, “they hopefully will emerge with a definition that more clearly reflects what they do.”

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