Shielded by privacy and exclusivity, the offices of America’s most top 1% families, as ranked by wealth, historically barred any financial or investment disclosures. But recently, this trend has shifted dramatically, as a number of family offices have begun allowing their army of investment professionals to be hired by the next generation of ultrawealthy in Los Angeles.
The Rockefeller Global Family Office, the wealth management arm of Rockefeller Capital Management LP, joins a slew of family firms expanding their market footprint in the city. The office added two area advisor teams to its Southern California roster this year, most recently recruiting the Willis Wealth Partners from the expansive Wells Fargo Private Wealth practice earlier this month. The team, helmed by brothers Frank and Matt Willis, manages, $350 million in assets, as reported by AdvisorHub.
Rockefeller has bolstered its Los Angeles presence for four years, onboarding advisors from the likes of Merrill Lynch & Co. and Morgan Stanley & Co. Private Wealth since moving west.
Unlike wealth management firms or divisions at large banks, a family office historically served one affluent individual’s or family’s financial needs. Everything from wealth-succession plans to charitable-giving advice fell to a handful of experts working closely with their employer.
The Rockefeller Global Office joins the growing number of firms broadening to multifamily status and hoping to attract the mega-millionaires and billionaires in Los Angeles.
Guggenheim Partners Investment Management, with an office outpost in Santa Monica, was a seminal player. Its former chief investment officer, Scott Minerd, grew the organization’s assets to more than $285 billion by the time of his death last December.
Michael Dell, the chairman and chief executive of Dell Technologies, brought on the Goldman Sachs chief investment officer Gregg Lemkau in 2020 to grow his family office. Following a merger with the merchant bank BDT & Company Holdings LP last year, the financial services firm now has an office in Santa Monica and oversees $50 billion in assets.
Most in the business world wouldn’t necessarily associate the Rockefeller name with investing or financial planning – that recognition would go to John D. Rockefeller’s contemporary J.P. Morgan. But in 2018, two Rockefeller family members entrusted a team of financial veterans to expand the reach of its assets with the backing of private equity giant Viking Global Investors. So far, the bet has paid off, with the office now overseeing $112 billion in assets, according to its third-quarter report this year.
Rockefeller says its expansion plans are still unfolding, with more Los Angeles-based teams coming on board next year.
Rockefeller’s West Coast expansion comes at a time when the state is seeing a sharp influx of millionaires. According to a Bloomberg analysis of California Department of Finance data on individual taxpayers, the number of residents in the state making more than $50 million a year was 3,200 by the end of 2021 – an increase of 158% from two years earlier.
The newly minted millionaire class also increased in the same time period, as those reporting between $1 million and $2 million in annual income surged 62%. They numbered 170,500 at the end of 2021.
High clearance for entry
Family offices remain relatively secretive, but their scantly regulated, private nature is exactly what attracts the growing number of wealthy.
While Rockefeller does not specify the net-worth range distinguishing its clientele as ultra- or high-net-worth, Rockefeller’s national field director, Michael Outlaw, described the clientele as business owners, entrepreneurs, investors and executives.
The Rockefeller Global Office said it has serviced some of the most “distinguished” families and entrepreneurs in the world. When these families bring in their high-society friends or networks for managing wealth, the operational cost is then shared, while the line of advising or expertise remains relatively similar.
While the typical financial advisor oversees Roth individual retirement account onboarding and savings accounts with steady salary flows, these clients bring in balance sheets anchored by controlling shares of companies, multiple real estate properties and sometimes even sports team franchise ownership.
One-stop shop
The Rockefeller team joins the “one-stop shop” trend in wealth management. Its services encompass a broad range of multimillionaire and billionaire needs, including tax planning, insurance, trusts, estate planning, philanthropy and executive compensation.
Outlaw acknowledged the Los Angeles market is already packed – its own advising team comes from large banks’ wealth management and private wealth divisions with advisor rosters climbing into the hundreds.
But coming in as a boutique firm means client-to-advisor ratios may be lower, thus allowing more flexibility and niche expertise if a high-brow referral network lends to similar wealth makeups.
According to Nate Angelo, the head of wealth management for Miracle Mile Advisors, the number of advisors in the market hasn’t increased, but many are leaving larger financial institutions to start boutique firms.
“The total number of advisors is not necessarily changing, but how they go to market and who they decide to partner with to deliver services to clients, that is changing,” Angelo said.”
While Miracle Mile has itself expanded through advisor hiring and acquisitions, other financial institutions continue to invest in wealth-advisory services for the growing pool of wealth still shy of family-office status.
The North Carolina-based First Citizens Bancshares Inc. launched its wealth advisory business in Southern California earlier this month, targeting the mass affluent still early in the wealth-development journey. 1st Century Bancorp Inc., a bank based in Los Angeles, hired several former First Republic wealth managers to attract the high-profile clients left hanging by the departure of several regional banks.
