Daszkal Bolton always served high-net-worth clients, but when Jennifer Lynch Ridgely joined the firm in July, its family office brand really started to take shape.
"Jennifer is an entrepreneur," said Jeff Bolton, the Boca Raton, Fla.-based firm's co-founder and partner, who handpicked Ridgely as principal-in-charge of its Family Office Group. "She needed the opportunity to spread her wings and build her business for herself with us."
There were two deciding factors that led Daszkal Bolton to start the Family Office Group: client need, and the firm's ability to find a leader. "It was a migration over time, but the reality is that you don't have an expert offering until you have an expert leading," said Bolton. "Jennifer made the concept into something that was real."
Ridgely jumped on the opportunity and designed an à la carte model for the family office practice. "The best way I thought for them was to have an open architecture," she said, explaining that clients can pick the services they need.
Traditional family offices usually help rich clients manage their wealth. Daszkal Bolton's services include bill paying, financial record-keeping, and separate bookkeeping for all of their different entities. The firm's family office works with their client's attorneys to follow up on legal transactions, which may include making sure confidentiality agreements are signed. It also assists with the hiring and firing of domestic staff. Clients can also get insurance reviews and investment analysis for all types of assets. However, the family office does not offer investment advising as a service. "I feel that you should stick to what you're good at," suggested Ridgely.
Daszkal Bolton's services also include tax preparation, but it takes its services one step further. The firm conducts family meetings so it can educate their clients. "It's really, really important, because what's the purpose of doing all of this if the family doesn't understand what we're providing them," said Ridgely. If the client allows it, the family's advisors are also educated. "Sometimes that education is for the advisors, because oftentimes they don't have all of the information necessary to provide the family with the best service."
There are times when the Family Office Group provides services that have absolutely nothing to do with accounting. "I've had to ship a motorized tractor over to another country," Ridgely recalled. "I also had to pick up a brand-new car, do the inspection and drive it home for them ... and it was a very expensive car." Ridgely and her team, which includes five full-time employees within the Family Office Group, basically provide every service that a client may need.
Having to handle accounting and personalized services for high-net-worth clients may be a little difficult to balance, Ridgely said: "A lot of times you are pulled in a million directions." The key component to making sure everything stays in alignment, she said, is to have someone who is willing and capable of performing both more complex and less complex tasks, while simultaneously keeping the family happy. "Sometimes there is a lot of jumping around, and you can't have somebody who has their to-do list who likes to check it off every day, because the list will change by the minute when the clients call."
Bolton advises that it is essential to have a dedicated leadership team in the family office space around the clock. "You have to have a service team that is able to handle things on a year-round basis without the interruption. They really don't want to hear about what else your schedule entails."
For Ridgely, the big picture is to be an advocate for the families and to make sure all of their risks are mitigated to the fullest. "That way, the families are comfortable knowing that everything is taken care of and they can enjoy the fact that they have money. Because what's the point of having it if you don't have time to enjoy it?"
THE IDEAL CLIENT
Family offices are understandably restricted to people who have an abundance of wealth and typically fall into the category of high-net-worth and ultra-high-net-worth. Families and individuals with a net worth of at least $25 million can participate in most multifamily offices. "There are many families who have had their own single-family office but don't want the costs, hassle or headaches of it," explained Ridgley.
"The initial source of their wealth varies for families and individuals," said Ridgely, who explained that the way their clients attain their fortune is irrelevant. "The entrepreneur who is starting to grow, that is not the end of his future. The former CEO who is used to having the full staff at their beck and call and now we are their support staff. Or sometimes there's a lot of handholding for the inherited family who doesn't know how to create new wealth but they know how to spend it. We work with them to help keep them from spending themselves into oblivion."
BILLING & TIME
After Ridgely conducts a thorough review of a potential client and understands the services they requested from the open architecture model, she then sets the family up on a monthly fee, which stays in place for one year.
Once everything is all set, the family or individual may come across a new service they would like to add. Depending on how often the client would like the service performed, Daszkal Bolton may either bill on an hourly rate, or the firm may renegotiate the monthly fee. "We offer our services for a fixed rate," said Bolton. "High-net-worth families feel most comfortable engaging for a well-defined set of services for a specific fee."
Ridgely reiterated the importance of educating her clients, and said that she makes sure they understand the bottom line. "If you have a client who is good with numbers, provide them with numbers. If you have a client who isn't good with numbers, provide them with charts," she said. "Everything we do is tailored to the family, as well as the individual family members."
GROWING CLIENTELE
Daszkal Bolton's Family Office Group currently serves 10 families. The group's first tier of clients stems from the firm's existing client base. "There are a couple of families who have a single-family office who have been considering moving to a multi-family office platform," Ridgely explained. "Then we have the referral sources and ultimately we have the family office clients who are referring clients to us."
For firms that are contemplating adding family office services to their offerings, Bolton said it's all about location. "This is South Florida; you can't decide that you are going to have a family office service [in an area] that doesn't have a high concentration of high-net-worth families," he said. Even though South Florida is a prime market, Bolton said it isn't necessary for high-net-worth clients to reside in the area to make use of the firm's services.
REPUTATION IS EVERYTHING
Daszkal Bolton is focused on offering value-driven services for their clients. The firm believes that tax and other compliance services are just the beginning - the goal is to build a foundation for providing value. "That philosophy has allowed us to grow the firm," said Bolton.
Bolton added that the firm has a reputation for "being a firm with substance" and believes that its growth will continue. He said the firm is able to stay front and center through traditional marketing efforts that include leveraging referral sources and direct meetings with prospects. To show their level of expertise within the family office service practice, the firm publishes educational materials, and it also gets the word out through its Web site, blog, newsletter and through various social media sites.
The firm also makes its presence known by staying connected to wealthy communities. Daszkal Bolton is in touch with trustees in large Chambers of Commerce throughout South Florida, and is quite active with several foundations, including the Leukemia Lymphoma Foundation and the Alzheimer's of America Foundation. "When you are visible and involved in the community, you know and understand your clients. That's how Daszkal Bolton started," said Susan Kaplan, marketing director and HR and recruiting manager of the firm.
Bolton added that part of keeping the firm in a positive spotlight entails taking part in charity events and panel discussions and being where the experts are -- all of which are imperative to bringing in new clients, especially for the family office practice.
"I've watched Jennifer participate in anything related to serving the highest-net-worth families in the area. A person with her skill and expertise needs to be visible," said Bolton.
RUNNING A FAMILY OFFICE
Many firms start to venture into a new service because of client demand. However, not every CPA firm has what it takes to offer family services. "I think firms need to make a decision either they are going to build the expertise or they need to make an effort not to do that work at all," Bolton advised.
So what does it take to run a family office? Ridgely sums it up in one word: experience. She added that the responsibilities and liabilities are much higher than a typical CPA firm. "Think of it this way, just for bill paying, if you forget to make your client's life insurance premium payment, what do you think is going to happen?" asked Ridgely. "You need to be careful to make sure that you know what you are doing and how to do it."
