Is a Family Office Right for You? An Interview With Gary Johnson of Plante Moran Trust
This interview with Gary Johnson was conducted by Plante & Moran’s Mindy Kroll.
Universal Advisor , 2005 Issue No. 2

If you have homes in multiple locations, the responsibilities of managing a successful business, travel frequently, or just want to simplify your life, you may have thought about the possibility of creating a Family Office to handle your personal and financial matters. Historically, however, a Family Office has been within the reach of only the wealthiest of individuals. But has that changed? Are family office services still only for the wealthy? Plante Moran Trust’s Gary Johnson shares his thoughts on the emerging trend of offering “multi-family office” services and how these services may be within your reach.

Let’s start with the obvious question: What’s a multi-family office?

You can think of it as your “personal office,” only without the overhead or imposition of delivering such services within your home or workplace and without the staffing issues. Quite simply, it’s an arrangement that functions the same as a “private” family office but is offered more economically for the benefit of several or many [usually unrelated] individuals or families. It offers a very personal, yet discreet and consolidated, approach to every financial concern from managing your assets and daily cash flow to other longer-term needs such as business succession, tax, and philanthropic planning.

What types of people can benefit from these services?

To begin, someone with a busy lifestyle. Good candidates might have multiple residences or vacation properties and, perhaps, income from multiple sources; they may benefit from having someone intervene on their behalf with merchants and vendors. They may travel frequently and are tired of having their mail and the attendant duties of paying bills chase them around the country. You’d be surprised how easily something can be missed; bills go unpaid, and penalties are incurred. Other good candidates include retirees looking to enjoy a life of relaxation, people heavily involved in the community — essentially anyone with significant priorities other than day-to-day financial issues. Our aim is to relieve our clients of the burden that can accompany managing their personal affairs.

It sounds like some of what’s involved is simple bill paying. Why hire Plante Moran Trust? Why not make that an administrative assistant’s responsibility?

Great question. An executive may use the company administrative assistant, but it’s expensive. Handling these affairs is cumbersome and can take a considerable amount of time and attention. One client hired us because her personal affairs were taking up almost half of her assistant’s time — now the assistant can concentrate more on the business, and the executive has the peace of mind in knowing things are being handled efficiently, effectively, and confidentially. And it actually costs less than when the assistant was doing it.

In addition, many times the process is not done as effectively as it could be. Our checks are computer generated, so there’s a level of sophistication from which our clients may benefit. It incorporates a system of tracking receipts and payments due and can provide clients with consolidated monthly statements, custom reports, and even full access through a secure Internet site, which clients can then use to assess how their resources are being spent. A lot of people are too immersed in the day-to-day and never step back to look at the big picture. Looking at expenses holistically on an ongoing basis is a lot more important than simply knowing your utility bill was $200 last month.

Safety and privacy are probably benefits as well.

Absolutely. Many people aren’t as cautious as they should be, and the checks and balances that should be present when you hire your own assistant could fall through the cracks. The security afforded through the Trust company, which was chartered under state banking laws and is regularly audited and examined by the state, allows the client to have peace of mind. It’s an environment of dual controls and security around all transactions.

Can you give me some examples of other services a family office provides?

Families who participate in a multi-family office have access to integrated financial advice and a wide array of other sophisticated financial services. Our team can assist with tax planning and compliance, estate planning, assistance with clients’ loan portfolios, personal banking, lifetime planning, philanthropy and family gifting, and a number of other, more personal services.

Such as?

We can assist with hiring or managing household help, including payroll withholding; we can help with insurance filings for ongoing medical needs. All of the bills and mail come to the Family Office; we'll weed through it, act on it according to the client’s instructions, and make sure client’s time isn’t wasted by mail and phone solicitations.

The mail comes to you?

Yes. At the highest level of service, the client has a dedicated post office box, a personalized telephone line into the Family Office, business cards, etc. We handle everything.

What about things like overseeing lawn service or cleaning services?

Absolutely. We even go so far as to do drive bys to make sure the standards are up to snuff.

Any other services potential clients should be aware of?

We can help with annual gifting, coordinating family meetings, educating future generations on investments, or starting a business. We’ve even made certain that clients who travel have the luxury of hometown newspaper delivery.

So you’re part financial manager, part concierge service!

Basically, yes.

Is there anything you’d like to add in closing?

Just this: We manage our clients’ affairs effectively, discreetly, affordably, and with the assurance of confidentiality — all with full accountability and the credentials of a chartered trust bank. This service is not for everyone. However, there comes a point — a certain complexity of affairs — where the demand for professional assistance becomes obvious. We’re here when it does.