Wigmore Association Sets The Tone For Multi-Family Office Collaboration

Harriet Davies

15 August 2012

When six heavyweight family offices teamed up in 2011 to form the Wigmore Association they achieved greater clout on the investment research and manager selection side, in a difficult investment environment. But the association also opened up possibilities about the way family offices from different countries could work together.

The founding members straddle North America, Europe and Australia, and are SandAire (UK), Pitcairn (US), HQ Trust (Germany), The Myer Family Company (Australia), Northwood Family Office (Canada) and Progeny 3 (US).

Members attended a three-day summit in Melbourne in April to discuss the shift of economic power from West to East, and will meet in Toronto, Canada in September. When the chief investment officers meet they swap ideas and discuss trends, but they also take the opportunity to meet local managers. The beauty of this is that the local family office can advise on the best investment managers to meet, thus time is spent more efficiently.

Membership to the exclusive organization is based on a “willingness to share information,” explains Karen Clark, director, client team at SandAire. And this willingness comes from “the belief that by doing so we will do a better job for our clients and we all benefit.”

On the group’s expansion plans, Clark says it’s not a “bigger is better” mentality. She says the dynamics work well at the moment and there is no need to expand. However, the members constantly review how the Association can achieve more.

“We all recognised that the future is not having a manager in Edinburgh investing in Japan - it’s having people on the ground, expanding your network beyond your community,” says Clark.

Competition versus cooperation

Collaboration between firms offering similar services raises the question of competition, as there has to be an environment of trust to share information.

“We don’t view each other as competition,” says Clark. This is partly a product of geography, as the offices are spread out globally, which also gives the maximum benefit in terms of research coverage. But “it’s also that the chemistry is crucial” between clients and family offices, she says, and this is “different in each office.”

Clients tend to be a tight fit, and working with one multi-family office doesn’t necessarily mean a client would be the right fit with another. Each firm has a particular skill set, specific strengths and focus, which are usually a product of its history.

A stronger industry

“When each of us does well it reflects well on multi-family offices and single family offices as solutions for families of wealth,” says Clark.

“It’s going to be as difficult as it is right now to invest in the public equity markets for the near future,” she believes, and so leveraging experience and time spent researching is a clear bonus. It’s about “sharing of the best ideas, best practices, taking advantage of the opportunities for families of this level of wealth.”

Of course this idea can be translated to other functions, not just investment. There’s evidence the MFO industry is strengthening, forming more alliances, working together to create a stronger industry brand and distinguish itself vis-à-vis other areas of finance.

One area the Wigmore Association is looking at working collaboratively on is next-generation programmes. Instead of running one-off day events, it would introduce specific mentors that are well-suited to individual younger-gen clients. This would allow young people to talk with a mentor without the family office or other family members present, so removing any pressure or sales atmosphere. The family office would be “coming up with the framework,” explains Clark.

Another idea is to create an exchange programme, allowing clients’ children to gain work experience at partner family offices, as well as the businesses associated with those offices – so offering a multicultural learning experience.

The economics

While being in the partnership gives each firm access to greater investment knowledge, Clark says “the economics weren’t really a driver” for setting it up. In fact, it is viewed as an investment, not a cost-saving programme. The benefits are “non-quantifiable” but she is confident the family offices involved will “reap dividends.”

“We know from the dialogues we’ve already had that it’s a worthwhile exercise.”

She is candid about the challenges family offices can face: “We’re 26 people sitting in London that creates a network with reach.” And, she continues, this reach goes deeper than can be achieved by day trips around the world to meet investment managers: “It becomes a conversation as opposed to a one-off meeting.”

She also says that, like with a family office, defining the association in precise terms can be difficult.

“What is unique about the Wigmore Association is what is unique about family offices. It can be hard to define what we do because it’s largely driven by the changing requirements of our families. We go where we need to go,” says Clark.

The fact that a family office is hard to define in strict terms is well understood in the industry, as they come in many shapes and sizes. This means sometimes the label is perhaps overused by firms that don’t truly offer holistic and integrated wealth management.

However, Clark is not too worried about the effects of this on the firms that do offer these services. She believes that through delivering on the client experience at an individual-firm level, and working as part of an organization that contributes to a stronger family office sector within the industry, the rewards will be captured.

“We can’t control other people’s actions, we can only control our response,” she says.