The process of combining, organizing, and facilitating family office or wealth management services to produce optimal outcomes for clients. It is the most complex of the three levels of advisory team functioning (cooperation, collaboration, integration).
Integration of family office services brings together internal and/or external service providers across some or all of the Ten Domains of Family Wealth to achieve a variety of benefits for clients and firms. These benefits may include improved solutions, avoidance of gaps or overlaps in service delivery, efficiencies in scale or operation, and utilization of problem-solving skills by professionals operating in an interdisciplinary manner.
To achieve effective integration of family office services, several key elements may be required. Service providers need to collaborate effectively on behalf of the client, appropriately sharing information within the bounds of confidentiality and privilege. There needs to be at least one integrated wealth advisor or expert generalist on the team who oversees and elevates the collaboration process to maintain accountability and keep projects on track by effective leadership. The main advisory firm – usually a hub provider in a hub-and-spoke network of service providers – needs to implement organizational, technology, provider compensation, and management factors to support integration. Finally, the client family needs to understand, support, and be willing to pay for integrated services.
Anecdotal evidence in the industry suggests that full integration of services may result in somewhat lower profitability or profit margins for the hub firm as a result of the added cost and complexity of delivering integrated services. However, further data is needed to confirm this.
There are no current standards in the industry for what constitutes integration of services. Some advisory firms combine financial planning, investment management, tax planning, and perhaps insurance or limited estate planning to achieve what they call “integrated financial services.” Others add in more services in the Ten Domains of Family Wealth but use outsourced providers with relatively lax oversight and limited collaboration to achieve “integrated services.” The UHNW Institute is currently developing a framework and potential guidelines to organize services into discrete and verifiable levels of integration so firms and clients may have less confusion over the process.
See Also: Integrated wealth advisor, Expert generalist, Cooperation, Collaboration, Levels of integration
Gratton, Lynda, and Tamara J. Erickson. “Eight Ways to Build Collaborative Teams.” Harvard Business Review, 2007. https://hbr.org/2007/11/eight-ways-to-buildcollaborative-teams.
The UHNW Institute. “The What and Why of Integrated Family Wealth Management: What Exactly Is It and Why Is Everyone Talking About It?” The UHNW Institute’s 2023 Symposium: The Evolution of UHNW Wealth Management: At the Crossroads of Collaboration, Integration, and Transformation. uhnwinstitutelibrary.org/document/the-what-and-why-of-integrated-family-wealth-management-what-exactly-is-it-and-why-is-everyone-talking-about-it/
