Levels of integration

Integration of family office services is a process designed to provide efficiencies of scale, problem-solving, and service delivery for the complexities of UHNW wealth. However, there are currently no accepted standards for what constitutes “integrated services.” The term may be used by financial firms or family offices for a very limited combination of primarily financial services, while other firms may add elements of wealth transfer planning, insurance, and limited philanthropic planning.  The choice to describe services as being integrated is largely at the discretion and definition of the advisory firm.

The UHNW Institute is currently engaged in an initiative to provide a unifying framework and set of guidelines to help define levels of integration in a verifiable standardized manner for use by both firms/family offices and client families.  In its current state of development, these levels of integration may involve the following four patterns:

1. Single or siloed delivery of services in one or two domains by specialist service providers. This is essentially a level of no integration except that which may be facilitated by the client family itself for its network of advisors (client-driven integration).
2. The combination of a few areas or domains of service delivery, often primarily in the financial and wealth transfer areas, offering services such as investment management, financial planning and management, accounting, tax planning, insurance, legacy planning, and limited charitable or philanthropic planning. This may be termed integrated financial management.
3. The integration of services utilizing all four domains in the Wealth Creation and Stewardship cluster of the Ten Domains of Family Wealth, plus a limited number of services in a few domains within the Cultivation of Family Capital cluster such as family dynamics, governance, and/or family education. This may be the realm of integrated wealth management.
4. The most complex level of integration, offering service delivery in an integrated manner across the entire Ten Domains of Family Wealth, led with expertise by at least one integrated family wealth advisor. This would be the level of integrated family wealth management.

The UHNW Institute emphasizes that Level 4 integration is not necessarily the best or preferred goal for a particular family office or advisory firm. Each firm must determine its best and most efficient structure based on its skills, mission, talent, organizational structure, position in the industry, business model, and other factors. Standardizing levels of integration is designed more for eliminating ambiguity and confusion in the marketplace for families seeking clarity and for family offices making strategic decisions about their service offerings.