Client Associates is India’s first and the largest multi family office (MFO) wealth manager in terms of the number of families and the size of assets, according to industry estimates. The firm, founded 22 years ago by private bankers Rohit Sarin and Himanshu Kohli, oversees assets worth more than $6 billion of over 1,000 family offices (FOs). Sarin tells Nesil Staney about the evolution and advisory structure of the business. Excerpts:
How has the family office business evolved?
We work as the CFO running family offices of our clients, helping them to manage their wealth across asset classes. We also help families solve issues regarding succession and estate planning, lending solutions, buying and selling of real estate, international investing and global mobility services, etc.
What is your investment philosophy, and how do you tailor it to individual family needs?
Our investment philosophy is driven by the goal of compounding our clients’ wealth over a long period of time. We decide on process-oriented asset allocation for clients in line with our market outlook. The portfolio of each of the clients gets customised around their unique expectations and constraints – expected returns, risk appetite, liquidity requirement, etc.
What is your typical client profile, and what is your minimum AUM requirement?
Our clients could be multi-generation family business owners, first generation entrepreneurs or senior professionals. Our minimum AUM requirement is Rs 10 crore and the average ticket size is Rs 46 crore. The industry standard for the HNI segment is usually $1 million, and it could be upwards of $5 million for family office clients.
How are your fees structured?
Our fee is based on AUM, which aligns our interest with those of our clients. The AUM-based fee structure ensures that our compensation is directly tied to the performance and growth of our clients’ portfolios, creating a natural alignment between our success and theirs. Every client wants to grow and compound its wealth over time. We wish to align ourselves with that fundamental goal, taking care of protection and growth of their wealth throughout the investment journey.
How frequently do you report performance?
The portfolio performance of every client is reported on a monthly basis. This ensures that clients have regular updates on their investment performance. These reports provide a comprehensive overview of how investments are performing across asset classes. They include performance metrics, asset allocation breakdowns, and market commentary to give clients a complete transparency.
How do you assist in inter-generational wealth transfer and family governance?
This is done by educating clients about the seamless inter-generational transition of wealth during their life time. Once the client is ready, we bring in subject-matter experts to help them structure this transition. We actively engage with the next-gen to educate them.
How do you ensure alignment of clients’ interests with impartiality?
We don’t have any in-house product, which eliminates the probability of conflict of interest and allows us to keep our advice unbiased and aligned with the interest of our clients. Secondly, our business model allows us to truly represent clients and sit on the same side of the table. Lastly, transparency in our investment advisory process and engagement leaves no scope for any conflict of interest. Our tech team has invested in best-in-class tech partners for application systems and hardware to ensure the highest standard of data security.