Programming note: This week’s newsletter is short because I’m on vacation. Modus will be back to normal next Friday.
The shortcomings of private wealth management firms are part of the tribal lore of single-family offices. After all, that’s why most offices exist in the first place: to meet genuine needs—and perhaps satisfy some unreasonable wants—that commercial organizations can’t or won’t.
While family offices pooh-pooh wealth management firms, they can still learn at least one lesson from them. Wealth managers are diligently establishing plans to evolve, a new report shows, and family offices should heed their initiative.
Early this year, F2 Strategy, a consultant to wealth and asset managers, surveyed executives at 36 wealth management firms with a total of $9 trillion in assets about their operating models. The majority of firms were satisfied with their models, but 79% still said they plan to make changes within a year, according to F2 Strategy’s report on the findings.
Wealth managers say they have good technology, but poor integration, analytics and product management are holding them back, and they need professionals better skilled at those things. Luckily for wealth managers struggling to scale their systems supporting thousands of financial advisors, they can hire the people they need. Most family offices can’t.
“Integration is an unmet skill, and I would say it is even more pronounced in [single-family offices], but less visible,” Michael Perez, a managing director at F2 Strategy, who works with family offices to improve their technology.
“At family offices, with similar objectives but a tiny staff in comparison, who will be responsible for stitching together custodians, performance reporting software, bill pay, other document systems and more? The gap is not just technical; it is about ownership. No one owns the end-to-end data flow, which leads to manual workarounds, reconciliation noise, a ‘spreadsheet-as-a-system’ reality, and inconsistent reporting to the family. It works until it doesn’t,” Perez added.
Unlike wealth management firms, family offices aren’t subject to commercial inertia, which would push and pull them to address operational problems. The firms surveyed by F2 Strategy said their operational models were designed to prioritize the advisor experience, scalability and risk. Family offices are focused on control, confidentiality, and resilience.
When the family-office priorities are coupled with the blurred lines of investment management, operations and personal services, it creates key-person risk and inconsistent execution, Perez said. The most effective family offices are making themselves more similar to the wealth managers; they are intentional about defining roles and responsibilities, separating control and having at least lightweight rules and procedures for workflows, especially for moving money around.
“What SFOs can learn from [private wealth managers] is discipline, not product…The biggest takeaway is not tools or platforms, but operating discipline. Strong PWMs do not just define the model; they execute it consistently through a clear service delivery framework that outlines how work gets done day-to-day, who is responsible, and how it is controlled. Many SFOs are still highly relationship and person-dependent,” Perez said.
“In many cases, the first step is aligning on what an operating model and service delivery model actually mean in practice. Where SFOs benefit is by putting just enough structure in place, clarifying roles, decision rights, and control points, along with how services are delivered to the family on a day-to-day basis, supported by documented workflows and basic controls. The goal is not to become a PWM, but to be repeatable, controlled, and defensible while remaining tailored to the family.”
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More News
- Only in Modus: A Family-Office Recruiter’s AI Experiment Has Not Gone as Planned.
- Private-equity billionaire José E. Feliciano and his wife, Kwanza Jones, are nearing a deal to acquire the San Diego Padres for an MLB-record $3.9 Billion, The Wall Street Journal reported this morning.
- The $13.8 billion Chicago Public School Teachers’ Pension & Retirement Fund revoked a prior decision to hire Cerity Partners over concerns about its backing from private equity firms, among other issues.
- The Father-Daughter Showdown That Shook an $18 Trillion Investing Empire.
- Richard Edelman on trust, ‘Succession,’ and how to advise a CEO.
- This week in “jobs we should all quit our current ones for”: Wall Street’s Elite Team of Coffee Tasters Who Keep the Global Market Running.
- The Harris Poll found that 40% of young Americans are consulting witches for major financial decisions. If you don’t have a witch on speed dial, you can always revisit this Modus newsletter from January: When Family Offices Should Invest in 2026—According to the Stars.
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Jobs
- The Dalio Family Office is hiring a senior human resources director in Connecticut.
- Agreus is running a CIO search for a $500 million single-family office in Singapore.
- Recruiting firm ICBD is helping a single-family office hire a family office coordinator in Fort Lauderdale to support its chairman and “serve as a trusted operational hub within a confidential, fast-paced” environment. “They will coordinate complex logistics, manage sensitive information, support cross-functional partners (EA, household staff, drivers, security, and external vendors), and anticipate needs before they surface. This is a role for someone who brings calm, structure, and follow-through to a moving target, and who can shift seamlessly between strategic support and hands-on execution without needing the spotlight,” the job posting says.
- Morgan Stanley is hiring a family office business development lead in San Francisco. Like similar roles at the other big banks, this executive director needs to be “comfortable with ambiguity” as they work with financial advisors and directly with clients on all kinds of things: investment management, financial and estate planning, family-office governance and operations, be the liaison for other groups at the bank, and more. Base salary for the role is $250,000 and there are other benefits and compensation.
- Pathstone, the $100 billion independent wealth management firm for many UHNW families, is hiring a director of client advisory in Denver, Colorado. This person supports other directors and MDs with client relationships, investment implementation, operations, and analytics work. Compensation includes a base salary is $150,000 and incentive and discretionary pay.
Other Stuff
- Follow the Modus LinkedIn. 2,000+ people do because it only shares worthwhile updates 1-3 times per week.
- What makes a good news tip? High-profile executives departing or accepting new jobs; trends that aren’t getting talked about; and, of course, seemingly nefarious people and things that offices should be aware of.
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I'll be...
- At the pool this afternoon in Cancún, Mexico, enjoying the last day of vacation.
- Back in NYC tomorrow, nursing some sunburn…
