Rich family offices have fastest growth, replacing bank branches

They call it “money camp.” Twice a week, 6- to 11-year-old scions of wealthy families take classes on being rich. They compete to corner commodities markets in Pit, the raucous Parker Brothers card game, and take part in a workshop called “business in a box,” examining products that aren’t obvious gold mines, such as the packaging on Apple’s iPhone rather than the phone itself.

It’s all part of managing money for the wealthiest families, says Katherine Lintz, founder of Clayton, Missouri- based Financial Management Partners, which runs the camp for the children of clients. Supplying the families with good stock picks and a wily tax strategy isn’t enough anymore. These days, it’s about applying the human touch, she says…

In sheer size, the family office units of banks dominate the ranking. Nine of the top 10 are associated with banks. HSBC Private Wealth Solutions…is No. 1 by total assets under advisement for the second consecutive year, with $123.6 billion as of Dec. 31, an increase of 21 percent over 2010…

It’s easier to grow when you’re small. Even so, of the top 10 fastest-growing firms in the ranking, only one — HSBC Private Wealth Solutions — was part of a big bank. The other nine were boutiques such as FMP — small companies that are often willing to accept thinner profit margins to mind money, prepare taxes, pay bills and arrange the purchase of private-jet shares for the ultrawealthy…

Boutiques…are eating into a business that the banks rely on. Their middle-class clients are getting poorer. Median household net worth in the U.S. declined to $77,300 in 2010, the lowest since 1992, according to a June study by the U.S. Federal Reserve…

That makes banking for the wealthiest more attractive than ever. To take in more family cash, many big institutions are trying to look smaller — and more blue-blooded…

Even Swiss banks, which have minded family money for centuries, are elevating their game. Zurich-based UBS, whose Global Family Office is No. 6 on the Bloomberg Markets list, is working hard to gain clients in Asia, where new dynasties are forming at the fastest clip.

RTFA. It’s long and loaded with anecdotal information.

If you’re reading my personal blog, the odds are pretty good you’re not one of those wealthy enough to need services like this. But, I can tell you from personal experience, if you find a company that’s thoughtful and careful about who they accept as clients, it’s not a bad gig.

It’s not really service in the Edwardian sense of the word. And it can be both interesting and rewarding.

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