Pathstone Family Office and Springcreek Advisors, based on the east and west coasts, respectively, are trying to blaze new trails in family office services.

Pathstone Family Office and Springcreek Advisors are prime examples of two firms providing family office services who are deliberately avoiding the label “multi-family office,” a trend which appears to be gaining momentum. (click here for a related article entitled "Multi-Family Office" Label Questioned By Industry).

Both firms are positioning themselves as alternative models for the business, and their progress is attracting industry attention.

Springcreek chief executive Bradley Fisher is quick to point out that “there are tremendous multi-family offices out there.”

But a traditional MFO can also be fraught with “danger,” he said.

“When you join someone else’s family office, you can become a second-class citizen,” he said. “It can be more difficult for the family to be paramount, and they can start to feel like clients.”

According to Steve Braverman, managing partner and co-founder, with Allan Zachariah, of Pathstone, “a majority of multi-family offices are asset gatherers and investment managers with a liquid capital viewpoint and a have a business model that  supports that activity.”

Differentiation

So how are Springcreek and Pathstone different?

Springcreek, which began  as a single family office and began adding new families this year, sees itself as a “consortium that shares common resources” Fisher said, and wants families to “feel like they are managing their own family office.”

Families who join Springcreek can use their own concierge services and integrate their staff members with what’s already in place at the firm, Fisher said.

“There’s strength in numbers,” he explained. “We only stand to benefit by working closely together.”

The firm is also investing heavily in technology and is using “software as a service model” with systems that are delivered directly to families, said Fisher, who was a software entrepreneur before entering financial services.

Springcreek’s philosophy, he stressed, emphasizes a multi-generational approach that encompasses investment trends such as  the “macro evolution of global investing towards emerging markets and the shift from a carbon-based economy to a conservation-oriented economy.”

Pathstone’s approach, according to Braverman, “goes beyond the core offering of a multi-family office with a greater level of integration, inclusion and responsibility.”

Pathstone, which launched last week with assets under advisement of around $2 billion, is also “happy to do business with ultra high net worth families who are very illiquid,” Braverman said.

In addition, Pathstone will have “multiple revenue sources” including charging a retainer for a variety of services such as tax returns, he said.

Similarities

But neither Pathstone nor Springcreek are straying completely off the beaten path as both firms are charging member families a percentage of assets under management.

Springcreek's consortium approach notwithstanding, the firm will be a for-profit company, although Fisher said he expects profits to be plowed back into infrastructure.

He also envisions Springcreek, which now has just a handful of families with $300 million in assets under management, to eventually include between 20 and 50 families.

How fast both firms grow will be closely watched, industry consultants say.

“What they are doing deserves some parsing and true analysis to understand what might be different about the model,” said Natasha Pearl, partner in the consulting firm SFO Advisor Select. “I for one am willing to give them the benefit of the doubt.”