As single family offices face increasingly complex decisions about how to organize themselves, there will be more opportunities for advisors and consultants.

As single family offices face increasingly complex decisions about how to organize themselves, there will be more opportunities for advisors and consultants, according to family office service providers who spoke at a session at the Family Firm Institute annual conference in Chicago yesterday.

The game has changed in the past two years for single family offices, according to Kathryn McCarthy, a New York-based family office consultant and Joan Major, one of the founders of London-based private client law firm New Quadrant Partners LLC.

“There is still no clear definition of what a family office is,” said Major, who has also worked in single and multi-family offices in the UK. “But with the choices of services available, it depends on what is appropriate to a family and that is not standard and never will be.”

“The challenge is how to work collaboratively with the family office and the other outside firms and advisors serving them,” said Major.

“There will be enormous opportunity in the future,” agreed McCarthy, a 20-year veteran of working with families. “The families need to get educated and learn to be better buyers and better managers. Also, governance is a big issue.”

The main reason SFOs need help is the smorgasbord of issues facing them. Major and McCarthy cited outsourcing, creating a virtual office, transitioning a chief financial officer to a chief executive officer role and how to handle investment management as the main topics of discussion within SFOs.

“A CFO often isn’t flexible enough and the family realizes they need more of a generalist, if that CFO can’t adapt,” said McCarthy.

Also, some SFOs are turning to MFOs rather than continuing to go it on their own. However, it does not necessarily mean the SFO is closing down in favor of joining an MFO.

“Some SFOs are not so much folding into MFOs but partnering with them,” said Rebecca Meyer, managing director at Pitcairn. “Some families with SFOs don’t want to go it completely on their own any more. In particular, they want to collaborate so they can lower costs and also access additional investment resources and opportunities that are expensive or difficult to access if it's just them.”

Major noted the MFO landscape in the UK looks very different from the US, so the SFOs have another set of considerations there.

“First of all, there aren’t that many. The MFO is only about 15 years old in the UK. And the focus is different due to the fact that a UK MFO will be serving English, French, Spanish, Russian and many other nationalities,” said Major. “UK MFOs usually do not really offer wide ranging tax advice because of the cross-border complexities, so they tend to focus on investment management with more complex tax and estate planning being handled by other professional firms.”

“Transition management from the founder to the next generation is driving a lot of change,” said McCarthy. “SFOs are developing the ability to handle change. If they can do that, they can handle the questions and decisions coming up. If they struggle with change, that’s the time that perhaps going to an MFO makes better sense.”

While the family office has increasingly become an attractive alternative to private banks, the banks will still have a role to play.

“It’s getting really hard to differentiate among the private banking offerings out there,” said one family member. “You hear the same thing from all of them.”

However, the private banks offer services that family offices cannot.

“Families have their boats, their planes and art, wine collections,” said McCarthy. “They often finance those things and it’s the banks that can do that. Private bankers are still needed, the family office doesn’t solve everything.”

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