Multi-Family Offices have become increasingly popular - with multinational institutions expanding their services, and traditional RIAs now positioning themselves into this bracket. 

Today we look at a prominent Multi-Family Office that originates from one individual who epitomizes the rags to riches story of The American Dream.

Max Whittier arrived in California with next to nothing and went from wildcatting for oil on Southern California properties in the 1890s to co-founding the Belridge Oil Company in 1911.

The company ended up controlling one of the most productive oil fields in US history which operated until 1979, when it was sold to Shell for $3.65 billion - the largest acquisition in US history at the time.

Max Whittier was also part of a group of investors who purchased the land that was developed into the city of Beverly Hills - but only after the group failed to find oil there!

Quite an achievement for someone who grew up on a potato farm in rural Maine.

Whittier died in 1925 and ten years later a family office was set up by the next generation to manage their real estate and oil investments. 

This evolved into a Multi-Family Office over time as friends and associates asked to leverage the infrastructure to support their own needs.

Fast forward to today and Whittier Trust serves over 500 families, operates from over ten offices with more than 250 employees, and has over $24 billion in assets under advisement.

We spoke with Jeff Treut, Vice President at Whittier Trust who joined after work at UBS, Blackstone and a group advising family offices on private deals.

Tell us about the typical Whittier Trust clients and their needs?

“Our clients’ net worth ranges from approximately $20 million to $35 billion. Some clients have a net worth below the threshold needed to start their own single-family office, while others have sufficient wealth but prefer not to commit the time and resources required. 

Additionally, some single-family offices engage Whittier Trust for our Nevada corporate trustee services, tax-efficient investment strategies, or customizable donor-advised fund platform.”

What are the most-utilized services Whittier provides?

“Given our experience preserving and growing wealth for the Whittier family over six generations, clients turn to us for our expertise in tax, investment and estate planning strategies that support multigenerational wealth preservation. 

As part of this model, many clients utilize our corporate trustee services. An essential part of this process is also helping families carry forward their values across generations.”

Why do families choose to join MFOs like Whittier versus the alternatives?

“Managing a single family office involves significant time and expense, and often creates human resource challenges. Many families prefer the efficiency and simplicity of an outsourced family office. 

Caution is warranted when considering private trust companies or appointing sole trustees from within the family. Private trust companies can be highly lucrative for law firms due to the significant legal fees and ongoing administrative costs they generate. As a result, these structures are often promoted not because they best serve the family’s interests, but because they represent a substantial revenue stream for attorneys.” 

How much control do Whittier clients have over their own investment strategy?

“We offer highly customizable, tax-efficient investment solutions. Many of our clients are sophisticated founders of PE and VC funds with deep investment expertise, while others prefer to delegate investment decision-making entirely to our team.”

What are your thoughts on the growth in banks and other advisors providing family office services?

“While Whittier Trust’s offering is rooted in the authentic legacy of a single family office established nearly a century ago, many others in the space provide low-cost ancillary services that merely check boxes. In some cases, professionals such as on-staff estate planning attorneys lack the bandwidth to effectively serve the volume of clients they’re assigned.

Our publicly traded competitors are heavily focused on margins and scalability, often resulting in standardized offerings, limited service, and hundreds of clients per advisor. Even many privately held peers are experiencing margin pressure and service erosion because they are either owned by private equity firms or in the process of being acquired as part of PE roll-up strategies.”

Where are you seeing innovation within the family office industry?

“Firstly, technology that enables the analysis and tracking of clients’ entire balance sheets including their private investments. And secondly, unique tax-advantaged investment strategies such as those offered by AQR.”

Tell us what some challenges are for Whittier as an MFO?

“The biggest challenge we face is differentiation. It can be difficult to communicate clearly to those outside the financial services industry the significant differences in philosophy and service models between a firm like Whittier Trust - which maintains a 30-to-1 client-to-advisor ratio- and competitors that assign hundreds of clients to each advisor. 

As a result, families often end up penalized for choosing a familiar household name that delivers lower service levels, charges higher fees, and invests in a tax-inefficient manner.

Interestingly, the Whittier family experienced this firsthand after selling Belridge Oil in 1979. They initially invested their liquid assets with the wealth management division of a large bank with a household name. After several years of mediocre after-tax returns and high fees, they brought their investments in-house and became intensely focused on tax efficiency.”

What trends are you noticing specific to MFOs?

“A key trend I’m observing is that firms which were historically customized and client-focused are increasingly prioritizing high margins and scalability, often at the expense of client service. This shift is evident both in the wealth management space and among traditionally ‘full-service’ trust companies.” 

How do you see Whittier evolving over the next 5-10 years?

“I see Whittier continuing to uphold our commitment to exceptional client service, maintaining our low client-to-advisor ratio, and preserving our strong 99% client retention rate. It’s this dedication to personalized service and building multi-generational relationships that sets us apart and enables us to win business when competing against the largest financial institutions in the world.”

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