Pat Soldano, Family Enterprise USA and Policy and Taxation Group

Feb 14, 2023
1 year ago
Pat Soldano

As president of the lobbying group Family Enterprise USA and founder and president of the Policy and Taxation Group, Pat Soldano leads a pair of entities that advance the interests of  family offices at the highest levels of government. Before assuming these roles, Soldano spent many years in family offices, starting with the office of the heirs of department store magnate Marshall Field and moving on in 1996 to launch a multifamily office, which she eventually sold to GenSpring in 2009.    

You were an early entrant in the multifamily-office space. Why do you think there’s a push for more multifamily offices? 

The fact is, the single-family-office model that was started in the ’90s was very effective — back then. You had $100 million, you thought you needed your own family office, and you formed one. That world doesn’t exist anymore. There is a lot more sophistication in managing assets today. There are more options, and there are more organizations with more people selling them. Pat_Soldano

And that’s really why the multifamily office was created. People knew they needed those comprehensive services — that full-service model, soup to nuts, providing all of the personal financial services that a wealthy family needs; but you can’t afford it unless you, in today’s world, probably have a billion dollars. You can’t attract the talent, and you can’t really provide those sophisticated solutions. And quite frankly, you’re probably not going to be getting the best deal flow out there. 

Once a family is outsourcing, why go with a multifamily office over any other wealth management firm? 

They’re going to get all the resources they need. A multifamily office is going to serve the family and whatever their needs are — and that means everything from investment management to, more importantly, taxes, insurance, estate planning, bill pay and philanthropic management. 

They’re also going to be getting the serve culture, not the sell culture. So most multifamily offices and certainly single-family offices operate in a serve culture — meaning they don’t sell a product, or if they sell any sort of product, they don’t get compensation for that product. They’re really providing [a service with more objectivity]. And many of them are formed as RIAs — registered investment advisers — so by law, they have to do that. I think that is the correct business model. 

What is the next change we’re going to see in family offices? 

I think the shift today is really around the next generation, and I don’t mean the older next generation. I really mean the millennials and the Xers and the Z generation. They’re changing what they want from their family offices.  They’re changing how it’s being communicated to them, how it’s being reported to them and how they even use those additional services that a multifamily office offers — if any at all. 

The younger generation is all about changing the world, and they want to make the world a better place. It’s something that really has to be focused on, and they really want to see good done first and rate of return second. Now, in today’s world, you can give both. I think that’s why ESG and socially responsible investing have become so popular and will continue to be popular, because that’s what the next generation wants. 

They also don’t want to be in a conference room and go through a PowerPoint. They want to learn in their own manner, meaning they want it on their cellphone. They don’t necessarily want to sit in a room with a professional and hear what the markets are doing. They’ll probably learn a lot of that themselves. And they don’t need their bills paid. They are going to be much more engaged in the ultimate outcome of their assets and where they are  deployed, particularly in the philanthropic area. 

So it’s just a whole different mindset, and it’s not a bad mindset. They do need to remember: They still need to make a profit, because they still need to get investment returns. Because if they don’t, they won’t have anything to give to those not-for-profits of their philanthropic causes. Without for-profits, the not-for-profits wouldn’t have that funding. … I think it’s important that while it’s favorable to do good in the world, you’ve got to have those profits to make sure that you can take care of it.