Steve Prostano is the founder and chairman of the Ultra High Net Worth Institute and a partner at PKF O'Connor Davies. He discussed with Crain Currency what inspired him to found the institute in 2019 and what he foresees as key trends for single-family offices this year.
You have a storied career in wealth management. How did your journey lead you to founding the UHNW Institute?
Over the course of my 40-year career, I have directly advised and consulted industry leaders, ultra-high-net-worth families and family offices. I have had the opportunity to design, build and manage national and global wealth and asset management firms as well as several multi-family offices.
Throughout this period, I observed that most firms serving the UHNW and family offices struggled to satisfy the needs of these client segments, which often was the result of the various constraints associated with the business model they were operating within.
In 2018, I was asked to organize the concluding panel at the Family Wealth Report Family Office Summit, and I brought together a group of professionals in the family-wealth space that I knew, admired and who had decades of experience in various wealth management business models to discuss.
Were there any financial services business models out there that fully satisfied the needs of the UHNW and single-family offices?
We had a great discussion, and we concluded that no one was fully satisfying the needs of these client segments.
There are some great firms, and there are better business models. However, the bottom line was that the industry has been struggling with serving these segments for decades. The bigger issue is that clients are confused — they don’t understand the various business models or what they offer — and the lack of transparency has compounded this situation.
After the FWR [Family Wealth Report] event, I discussed with the panelists what we could do to help these clients.
We recognized that there was a gap in the family-wealth space that we might be able to fill and that educating these clients and their advisers was a priority. We also discussed the existing industry groups, and our feeling was that families and advisers were looking for a different type of industry group — a different model. And they are done with pay-to-play!
So, in early 2019, we set out to build what was missing — a nonprofit think tank and learning exchange in the family-wealth space. In January 2019, we announced the launch of The UHNW Institute.
What is the Institute’s mission?
To transform the wealth management Industry for the benefit of the UHNW and family office client segments by:
- Educating families and helping them to navigate the wealth management industry.
- Educating advisers and family office executives on the best way to support UHNW families.
- Providing an intellectual framework and understanding of family-wealth content.
- Providing exceptional thought leadership, insights and resources to advisers, family offices and the families they serve.
- Providing and fostering an equitable/objective, collaborative and safe learning environment within our industry.
- Promoting best practices, providing professional development and promoting positive change in our industry.
How is the institute distinguishing itself from other industry groups serving single-family offices?
The institute has assembled a faculty of over 50 thought leaders, an SFO Steering Committee of family office industry experts and an advisory board of C-suite SFO executives who have helped us to understand what is most important to the industry. They are helping us create a differentiated and compelling membership program for SFOs.
This offering will allow SFOs to leverage our global specialists, content and data to solve their real-world challenges, foster learning and scholarship, drive innovation and achieve their goals within a nonprofit think tank environment, which reassures SFOs that the institute is not trying to monetize their experience.
What needs do single-family offices want to have addressed in 2024, and how does the Institute help them with that?
SFO executives look for continuous improvement and ways in which to be more effective in their roles. They need to better understand the 10 Domains of Family Wealth (the institute’s framework), because they represent the needs of the families they serve and include: financial and investment management, estate planning and legal issues, social impact and philanthropy, risk management, governance and decision-making, leadership and transition planning, learning, development and the rising generation, family dynamics, health and well-being.
In addition, we address best practices and the ecosystem that supports the delivery of the 10 Domains to their families. The areas that are of key interest to SFOs include services to principals, enterprise stakeholder support, talent and infrastructure/operations
What do you offer single-family-office executives, and why is it unique?
The institute will offer SFO executives Insightful education and training for SFO executives and their staffs, a resource library, programs and events that deliver actionable information and practical ideas, global connections and direct access to family office experts and thought leaders.
What do you believe to be the key trends for single-family offices this year?
Transitioning existing family offices to a Wealth 3.0 mindset, understanding the new skills and approaches required to deliver integrated family wealth management solutions, focusing on talent and the learning/development of SFO professionals at all levels, social impact, and reassessing risk management programs and what risk looks like for UHNW families in the era in which we live now.
What’s next for the institute?
Consistent with the needs and trends we are seeing in SFOs and our commitment to elevating the wealth management industry to serve the best interests of UHNW families and family offices, the institute has established its Integrated Family Wealth Management Initiative as a strategic priority.
The institute seeks to codify industry standards for identifying and delivering IFWM services. Elements of this initiative include defining key terms and concepts, developing rigorous benchmarks, outlining comprehensive guidelines, creating effective tools and assessments to evaluate conformance to accepted standards, and developing unique training programs to assist advisers and SFO executives in the delivery.
By establishing and promoting acceptance of standards for integrated family wealth management, the UHNW Institute will enable families, advisers and SFO executives to identify service solutions that align most effectively with each family’s unique needs and goals.
Exploring challenges families face within household management
By TERESA LEIGH
Teresa Leigh, owner and founder of Teresa Leigh Home + Family Office, has specialized in household risk management for over two decades. She’s seen it all — from staffing disasters to stolen property and beyond — and has garnered practical advice to share with ultra-high-net-worth families. In this column, Leigh responds to questions submitted to her about pertinent issues. If you’d like to submit a question that would be kept confidential, please email her at [email protected].
What do you think are the most relevant interview questions that should be asked of personal-assistant candidates who will be working for me in a busy home office setting?
— Lusia, Santa Cruz
In my experience, employers have an unfortunate habit of overfocusing on a candidate’s likability instead of seeking out the authentic, nonembellished skill sets of experienced personal assistants. I understand the need to feel comfortable with someone who will be in your personal space. However, the shine will quickly wear off a new hire if the person fails to exhibit professionalism or lacks the expertise to do the job. Skill trumps personality every time.
To better understand if your favorite candidate has the right stuff, I’ve included my top three interview scenarios.
1. Use an example of a problem you are currently facing or a project that needs a solution. Here is an example: “I need to hire an interior decorator for my home at the beach. What questions would you recommend that I ask when I interview decorators?”
Guidance: Listen to how they ask questions about this project. Are the questions organized and fluid? Are they in chronological order? Are they asking critically important questions, e.g., where is the beach house located, what is its size, what is your style, how complex is the project, how do you like to work with decorators, and are there decorators with whom you prefer not to work?
2. Question: Can you offer me a past employer interaction that did not go well and explain what you learned from that encounter?
Guidance: Pay attention to the details they share and the demeanor they convey as they reply. Are they able to offer an example that makes sense? Are they divulging disparaging information about the employer or their families? Are they accepting responsibility or placing blame? Did they answer the question about what they learned from the situation to your satisfaction, or did they go off into storytelling mode and hijack the interview?
3. (This is one of my easy favorites.) Question: Walk me through a typical day on your last job.
a. Tell me how you organized your day and how you dealt with unexpected or urgent situations.
b. How did you manage the changes that occurred overnight?
c. How did you track projects?
Guidance: Listen carefully to your candidate. Did their answers offer examples of a full day, or were they operating off an assigned task list? How does this past employment relate to the job you need done? Did they share when their day started and ended? Were they available to take calls or texts in the evenings or on weekends?
Interviewing for a successful personal assistant is a skill learned through experience. Don’t be afraid to lean in and ask the tough questions.
Teresa Leigh is an expert adviser and educator in household, property and family office staff for high-net-worth individuals. Clients are drawn to Teresa’s individualized personal attention, passion, genuineness and expertise. She is renowned for her ability to empathically understand her client’s situation and provide them quick and effective resolutions.