The WealthTech Podcast Episode Transcript

Host: Mark Wickersham

Guest: Brian Adams, Mack International

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Mark Wickersham: All right, Brian, welcome to the Wealth Tech Podcast. I am happy to have you on the show. Today, we're going to talk about the people side of things. The WealthTech Podcast talks about people, process, and technology.

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Mark Wickersham: Today, we're going to focus a little bit more on the people side. Would you mind giving an introduction of yourself and Mac International?

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Brian C. Adams: Yeah, Mark, thanks again for having me on. It's, it's a pleasure. So, as brief background, like we were talking about before we went live, I'm from upstate New York originally, went to school in New England.

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Brian C. Adams: Where I met my wife, who is from Nashville. So, we both went to grad school up in Boston, and then moved to Nashville about 20 years ago. My wife's family has a family office.

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Brian C. Adams: She's the oldest member of G2, that's how I got into that whole space. Have a background as an attorney and was a real estate investor before joining Mack International as a partner. We are, a boutique, independent

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Brian C. Adams: a retained search firm. We work with single-family offices across the country to help them find C-suite executives, so president, CEO, CFO, CIO, some general counsel, COO work. And, Linda, the founder, started the business about 23 years ago now, so been doing it a long time.

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Mark Wickersham: Yeah, Linda Mack is an absolute legend.

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Mark Wickersham: You, you've also co-founded a couple of family office groups. Would you mind speaking about those?

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Brian C. Adams: Yeah, absolutely. So, … I'm a long-time member of YPO, and so, being a big believer in

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Brian C. Adams: Peer-to-peer, safe harbor, experience share opportunities, …

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Brian C. Adams: About 2 years ago, with a YPO forum mate of mine, Tim Brown, we started two groups. One, SOMOS22, which is an event business. We'll put on 20 to 30 events for…

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Brian C. Adams: maybe around 2,000 plus family offices across the country, through different kind of curated venues. And then I started Forteleza with Tim, which is a paid membership community where, kind of like YPO for family office, principals and professional managers. And the idea for both is just…

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Brian C. Adams: A place where, kind of, they can get true peer-to-peer conversation, vulnerability, and…

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Brian C. Adams: Just through some of the modalities and formats we know are effective, scale trust really efficiently for them.

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Brian C. Adams: Because many family office professionals are in a resource-constrained environment, and very difficult for them to find true…

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Brian C. Adams: kind of peers within their own community or within the broader U.S, so trying to close the gap and help be a resource for them. It's a lot of fun.

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Mark Wickersham: Yeah, I mean, peer-to-peer groups, I think, are really important, especially for family offices. They can be a little bit insular,

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Mark Wickersham: And I think that, you know, the family offices, they think they're snowflakes, and there is a saying that when you see in one family office, you see in one family office, which is true to a certain extent, but certainly you see there is, I think, a lot to learn, that family offices can learn best practices from

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Mark Wickersham: from other, family offices. What is the value of that peer-to-peer? What is the biggest benefit that members receive?

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Brian C. Adams: I think to your point, Mark, I think that adage gets thrown around a lot, and it does a real disservice to the ecosystem, because, at this point, it's a fairly mature, asset class in a lot of ways, and of course, every family is a little bit different, but, you know, directionally, if you're,

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Brian C. Adams: billion dollar, purely financial family office, …

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Brian C. Adams: you're gonna have some similarities in your org chart, and your challenges, and your opportunities. And so I think for the community that the value-add is, …

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Brian C. Adams: for a professional manager that, can really cut the learning curve, right? If they say, hey, I've been given the mandate to institute the lender structure, and we're also going to roll out a private trust company.

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Brian C. Adams: what jurisdiction should I be shortlisting? Who should I work with on lender? Like, who are the right attorneys? Who are the right tax team?

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Brian C. Adams: shorten that, kind of, learning curve, and help them with, kind of, RFPs, or bake-offs, or, hey, this is the right point of contact here. That's been the most helpful thing, I think, for people, is, hey, my principal said that they now want to get involved with

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Brian C. Adams: investing into sports as an asset class, who are the 10 people I need to talk to? As opposed to just trying to go out into the wilderness and figure it out on your own, you can kind of shortcut it and have somebody say, hey, I've seen this movie before, here are the 3 people you need to talk to, you can trust them, they will help you, don't step in this pothole.

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Brian C. Adams: again, because even though there's a lot of AUM, and there might be a fairly big organization, the role and responsibility is really broad, and so you're expected to be able to just solve all these problems, and to have a place where you can get

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Brian C. Adams: subject matter expertise, and then geographic expertise really quickly in a vetted, trusted community just helps a lot, I think.

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Mark Wickersham: Yeah, I think there's no substitute for experience, and to be able to talk to somebody that's kind of gone through it, that you'll learn from their mistakes versus having to make them. I mean, certainly there's other mistakes that can be made, and that's just part of the process, but if you can kind of shorten that learning curve, I think that's, …

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Mark Wickersham: That's fantastic. Talk to me, you have one of the best podcasts in the family office industry, the Mac Podcast. I think it's a great community asset. Can you talk to me a little bit about why you started the podcast, and what have you learned from over 50 episodes of interviewing people?

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Brian C. Adams: Flattery will get you everywhere, Mark, so thank you for that. Yeah, so I've been doing podcasting for a long time under my old, previous real estate firm, started it during COVID, like a lot of people, and…

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Brian C. Adams: I have a tendency to overdo things, so I just started doing a lot of it.

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Brian C. Adams: I did, like, 400 episodes, and then ported the show over, basically, under the Mac umbrella when I joined as a partner.

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Brian C. Adams: Took a while to get spun up, but now we're really hitting a good rhythm.

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Brian C. Adams: You know, for me, it checks a couple boxes. One, to your point, Mirror Show's fantastic. There just isn't enough content out there. You know, the consistent refrain I hear from family office people is.

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Brian C. Adams: a trusted source where they can get, like, true education that's, unadulterated, right? Not vendor-driven, not sponsor-driven. Yeah, not productive. Yeah, not product-driven. The same goes, I think, for a lot of the conferences and events, right?

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Brian C. Adams: And so, it seemed like there was a big gap there, where there weren't enough shows providing enough content. And then…

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Brian C. Adams: I think in particular, kind of to our conversation earlier, …

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Brian C. Adams: the family office space, because it's so broad, I really enjoy getting very niche and very esoteric in some of the subject matter, and it only… it's kind of an inch-wide, mile-deep type of audience, but it's fun, and I find it hugely entertaining to learn about…

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Brian C. Adams: physical gold storage in New Zealand, you know, because…

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Brian C. Adams: And it's cool, because I have these conversations with these family office folks all day, and I kind of say, hey, what's keeping your principal up at night, or what are you working on right now? And kind of sanitize it, anonymize it, and then go out and say, okay, well, let's do a show about this.

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Brian C. Adams: And so it's a really fun way for me to build and broaden my network as well. So I've just been doing it a long time and enjoy it.

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Brian C. Adams: my marketing people like it because it's a very efficient way to make content. You know, one show, I've got audio, we can clip the video, and then with AI transcription services, we can create blogs or posts about it, so it also is a very efficient way for me to do that.

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Mark Wickersham: Yeah, I think you do a great job at starbursting that content, and I think podcasts can really create a lot of content. I enjoy it because I get to talk to a lot of people that are smarter than me and really have some really great conversations, so I'm really thankful for all my guests that come on. I learn something from every…

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Mark Wickersham: every podcast. And to your point, too, there are, especially when you look at the RA side, which is a very dynamic space, that there are a lot of podcasts out there, some very good podcasts.

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Mark Wickersham: But the family office space, that community, you know, asset, it's… not everybody has a chance to be able to attend a conference or be into a peer-to-peer meeting, and it's a way that if they're driving into work, they can get some additional insights or, …

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Mark Wickersham: additional, kind of, knowledge from other folks, so I think it's great, and I think your podcast

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Mark Wickersham: is great. Let's, let's talk about the talent side. Obviously, that's your area of expertise and focus.

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Mark Wickersham: Consistently ranks as one of the top issues, if not the top issue. I think technology tends to come in around third, but a lot of that could probably be related also to the talent and people issues and constraints there.

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Mark Wickersham: Why… why is it such an issue for family offices to be able to attract and retain,

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Mark Wickersham: Talent.

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Brian C. Adams: First off, it's a hard job. I would say, you know, the term that Linda uses a lot is chief, cook, and bottle washer, right? So, it's a very expansive role, and…

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Brian C. Adams: …

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Brian C. Adams: I think some people really struggle with the mandate, frankly, because, in family office world, let's use investment professionals as an example.

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Brian C. Adams: On the street, or in a traditional institutional group.

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Brian C. Adams: It's just about your return metrics. Are you hitting your return metrics? Are you over your return metrics? And everything else, as long as you're not a bad actor or, you know, committing felonies.

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Brian C. Adams: it's all kind of secondary. Like, you can do what you want to do. If you perform, that's great. I think for families, it's much more amorphous, where they want to make a return.

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Brian C. Adams: But they also want to be able to have Thanksgiving dinner together, or they want to be able to…

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Brian C. Adams: give money to this cause, or have this larger mission being accomplished and executed on, and that takes a very particular person that cares. They have to be service-oriented, they have to want to help somebody else achieve a goal, and it's a fundamentally odd job, because you'll never

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Brian C. Adams: definitionally, you'll never be the principal. You'll never be the ultimate decision maker in a governance structure, because you're not a family member.

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Brian C. Adams: And so some people really struggle with that. So you've got just kind of a shallower pool of accessible talents, because that's kind of one of the big screens.

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Brian C. Adams: And then

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Brian C. Adams: I think from the family side, you know, a lot of folks now really want people that have 20 years of family office experience, subject matter expertise, and then 20 years of runway.

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Brian C. Adams: that's just hard to find these days. There aren't enough people who are, you know, 45 that have

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Brian C. Adams: 20 years working at a great family office that come from a tax background, but then also, you know, want to move to Detroit, or West Palm Beach, right? I mean, it's just the Swiss cheese effect of

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Brian C. Adams: everything has to line up really well. It's just that there aren't enough people, generationally, with this big succession that's occurring, generationally, transition-wise, so…

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Brian C. Adams: it's a tough job, and it's still, even though more outward-facing, it's still a pretty opaque space. So when you think, oh, well, I'll just go out and talk to a bunch of people.

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Brian C. Adams: In family office world, …

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Brian C. Adams: If your principal or your family finds out that you're speaking with somebody else, even on a preliminary basis.

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Brian C. Adams: I mean, that's the end of it for you, right? So there needs to be a confidential private intermediary that's able to safeguard everybody, and there just aren't that many people out there that can do that well.

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Mark Wickersham: Yeah, I think one of the things that they look at, too, is, you know, loyalty is really important. They want… the trust factor needs to be really high, and I think, to your point, too, there's a lot of…

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Mark Wickersham: It's almost like being in a startup, a perpetual startup, where you have to wear so many different hats all the time, because the range of services that you need to provide is so broad, and then the mandate can change, because that's really the reason why family offices

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Mark Wickersham: the family has a family office, right, for the ultimate level of customization and control. Let's talk about what, you know, back to that saying about you seen one family office, you've seen one family office, and that kind of debunked that a little bit. What are some of the…

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Mark Wickersham: The main reasons why somebody would start a family office, and what are some of the, kind of, the different types of family offices that you've seen as different types of structures that you've seen that are successful?

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Brian C. Adams: Yeah, I think, like you referenced, fundamentally, the drivers behind starting and maintaining one are pretty consistent, right? It's control, discretion, privacy, confidentiality, and customization.

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Brian C. Adams: And that's one of the reasons I think they've become so popular, is, …

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Brian C. Adams: the multifamily office platforms, RA platforms, and the large wirehouse platforms, they really struggle, and this goes to technology.

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Brian C. Adams: the customization component can be really challenging, right? You've got one family member that wants the quarterly report two weeks before, in a binder, email, or mailed, snail mailed to their beach house.

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Brian C. Adams: And then you've got a younger person who's on the board who wants

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Brian C. Adams: a 5-minute video clip given by the CEO of, hey, these are the 3 things you need to worry about.

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Brian C. Adams: And that's what they want, and you've got to give it to them. It's very hard to scale, right? And so, those big platforms are always going to struggle with that. And then just ring-fencing information, given the sensitive nature of how these families are orchestrated, those are typically the drivers behind family office creation.

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Brian C. Adams: And maintenance, and I think that's why they're going to be persistent in the marketplace for a long time, because I don't see the ability to have a solution set covering all of them coming anytime soon.

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Brian C. Adams: In terms of structure, …

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Brian C. Adams: there's a huge amount of variability, but, you know, I would say that you've got, kind of.

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Brian C. Adams: The single-family office where there's a corpus of assets serving the lineal descendants of one, kind of, particular matriarch or patriarch.

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Brian C. Adams: Post-liquidity event, you know, those assets are being put to work.

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Brian C. Adams: In some form or fashion to maintain that quality of life over a multi-generational time horizon. Embedded family offices, so you've got an operating company or some type of larger platform where there's a shared services agreement with an internal group.

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Brian C. Adams: that does some things for the personal individuals who are within that larger platform. So think of, …

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Brian C. Adams: You know, like a widget factory that's privately held, but then there's a group within the widget factory that manages the owner's personal

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Brian C. Adams: Tax returns, accounting, bill pay, concierge, lifestyle, maybe there's an investment entity just servicing those individual family members, but…

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Brian C. Adams: the resources that that family office leverages are more broadly within the operating company itself, so they're taking advantage of those things. And then you've got what I would refer to as, like, the multi-client family office, where, you know.

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Brian C. Adams: even though it might technically be an RIA from a registration perspective, it's a discrete group of some type of relationships, of families, that they pool their resources either for access or shared services or for economic benefits, and they all have kind of a unified purpose for being together.

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Brian C. Adams: Those are kind of, like, the three big archetypes. I mean, we could get into, like, digital and virtual family offices, I'm not sure that's super…

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Brian C. Adams: Productive, frankly, because ultimately all families are doing a buy versus build decision-making on some level, and

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Brian C. Adams: I think they just represent one extreme of the spectrum versus a holistic family office on the other end, but we can get into that if it's helpful.

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Mark Wickersham: Yeah, I think those are great that, you know, there are some, …

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Mark Wickersham: prototypes out there that the founder's office, the embedded office, the…

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Mark Wickersham: a couple different multi-family offices where families come together, and then there's the more commercial family office, which is actively seeking to consistently grow, and you're seeing a lot of…

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Mark Wickersham: One is you've seen a lot of proliferation of family offices, that it is a winning business model, but certainly that the multifamily office is having a lot of success.

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Mark Wickersham: These days, too. Talent is one of the biggest line items for any family office. How much does a typical family office cost, and how much is that contributed to the talent?

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Brian C. Adams: Yeah, I mean, I can just throw a whole sink full of caveats before I say anything here, because numbers are really dangerous, but I think directionally, you're looking at…

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Brian C. Adams: 3 to 5 million of startup cost, and 3 to 5 million of operating overhead annually, you know, directionally, just to keep this… to do it, quote-unquote, right.

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Brian C. Adams: And that would include, you know, legal, accounting, tax, … Third-party custodians, …

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Brian C. Adams: And then, you know, a skeleton crew of probably somebody who's a chief financial officer, a CEO president, somebody who's managing investments, and then some type of

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Brian C. Adams: administrative support system internally, so that's probably a staff of 3 to 5 people, is what I would say. It's no small thing, it's a lot, and…

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Brian C. Adams: Interestingly, around technology.

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Brian C. Adams: we've seen compensation go up, and I think part of the driver there is, because there are such great technological solutions these days, you can do general ledger, you can do investing reporting, you can even do some customized consolidated reporting.

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Brian C. Adams: it still probably needs to be manipulated on some level before it gets to the client user, but all of those things, and a lot of these great outsourced service providers that are doing a good job these days, it just means that the C-suite executives now have more data inputs that they need to figure out how to be strategically put into the field.

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Brian C. Adams: And so, the level of professional you need now to manage all of that data, and to figure out what to do with it, and to be a thought partner means that you're looking at fairly senior people who are really smart, and probably have some subject matter expertise within tax.

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Brian C. Adams: Law and or investment.

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Brian C. Adams: So I think that's one of the things where people get some pretty serious sticker shock, but again.

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Brian C. Adams: These folks are hard to find, and, you're also competing directly with private equity, venture capital, wealth management firms, asset management, firms, you know, it's a competitive space these days.

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Mark Wickersham: Yeah, I think there's a great point in regards to technology. There is a lot of good family office-specific technology out there these days, which is really great to see. I think there's a lot of, … I think people

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Mark Wickersham: accidentally picked up the space where it sold into it if they could. Now you see specific offerings. You see a lot of offerings that are even being…

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Mark Wickersham: Born out of family offices, that they're commercializing some of the solutions that they've created, and those are obviously very specific to the industry, which is great.

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Mark Wickersham: I like to say, though, the good news is there's a lot more offerings for family offices, but the bad news is there's a lot more offerings for family offices, and that they need to manage that and figure out which one's right for them, and it can be a little bit of…

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Mark Wickersham: buyer's confusion on that as well. Technology decision-making within the family office, where… who… what role does that typically fall under?

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Brian C. Adams: It's a great question, Mark. I think there's a lot of confusion there. I think one of the biggest challenges that families have when it comes to technology is nobody has direct ownership over it, typically.

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Brian C. Adams: I mean, the big… the multi-billion dollar family offices that are institutionalized, they probably have a chief technology officer and or an IT department that can help manage this. That typically falls underneath the COO.

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Brian C. Adams: in a big org chart, but anything below that, it's a hodgepodge, typically. I mean, what you usually see is a constellation of responsibility. So investing reporting goes to the CIO, general ledger goes to the CFO, consolidated reporting is…

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Brian C. Adams: Maybe the COO, maybe the CEO-president, there's not really a holistic

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Brian C. Adams: coverage of it, which I think is why implementation, onboarding, and execution is such a pain point for everybody, because nobody truly has, like, direct ownership over it. And then usually, the capital allocation comes from the board, right? The board says.

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Brian C. Adams: hey, we need to improve our technology stack, go to the market, run an RFP, figure this out, but then they're largely disengaged from the conversation.

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Brian C. Adams: And, so it's… frankly, I think that's one of the bigger challenges is, in my experience.

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Brian C. Adams: technology can be anywhere from under the HR person, under CFO, under COO, under the CIO, under the CEO, and … I think when everybody owns something, nobody owns it.

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Mark Wickersham: I think sometimes you see, … I certainly see that the buying behavior on the single-family offices, too, like, I call it somewhat irrational, like, you can…

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Mark Wickersham: Have a solution that makes a lot of sense and lines up every, you know, criteria, but the change management aspect, the risk aversion sometimes, the lack of ownership of that can be…

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Mark Wickersham: a problem for folks. I think what ends up happening is it becomes event-driven. Some sort of event happens, and then you're… it's a little bit more of a scramble. Somebody departs, or the Excel spreadsheet that they had becomes corrupted, or… and then they're really kind of making decisions under pressure, which isn't necessarily great.

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Brian C. Adams: Well, like our friend, Ray DiNunzio always says, you know, technology cannot solve an operations problem.

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Mark Wickersham: And I think a lot… software process, bad process, right?

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Brian C. Adams: Yeah, I mean… I think families think of these things as these panaceaas and silver bullets, and …

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Brian C. Adams: You know, they need to take a step back, usually, and just think through their processes and procedures and operations first, and then…

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Brian C. Adams: to your point, I see a lot of reactionary, acute pain point of, like, I hate my dashboard, I don't like my investing reporting product, let's change it.

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Brian C. Adams: But then they think, well, how is that going to interplay with General Ledger? What is that going to mean from an API perspective? Like, does that mean that we also need to input a CRM to be able to produce the reporting that we want? And there's just, like, this cascade of challenges that come with it.

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Brian C. Adams: So….

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Mark Wickersham: A lot of opportunity there.

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Mark Wickersham: I think one of the things I see, too, is that they tend to be, …

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Mark Wickersham: they're kind of solving yesterday's problem. They have this pain point, they want that pain point to go away without necessarily taking a look at, you know, what is the technology roadmap, what's the future state of the family office, and how can technology support that future state?

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Mark Wickersham: Versus it's… they have this immediate pain point, they find a point solution, the pain did that, and then these… all these other ripple effects, right? Does it… does it integrate with your general ledger? Does somebody have to input that information? Do I need to have some sort of middleware that sits in between?

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Mark Wickersham: On and on it goes. You can see the impact of those decisions when they're made in kind of these narrow silos.

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Mark Wickersham: Let's talk about the impact of AI. Obviously, the impact of AI is rippling across all industries. Certainly, wealth management and family offices is not immune to that. How is AI impacting staffing at family offices?

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Brian C. Adams: They're certainly spending a lot of time talking about it. I'm not sure they're actually doing anything with it, but there's been a lot of directives brought down from principals and family office boards and leadership saying, figure this out. I think there's a huge opportunity, frankly, for families to leverage it.

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Brian C. Adams: the biggest challenge, that everyone kind of ultimately comes to, and we have the same problem within our business, I'm dealing with it right now, is…

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Brian C. Adams: the highly sensitive nature of the data. I think, you know, generally.

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Brian C. Adams: Directionally, you want to own your own data.

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Brian C. Adams: Beyond that, being able to have something operational and searchable and actionable that's ring-fenced properly is the big problem that families are facing within… because they don't have enough money nor the resources to have a proprietary tool.

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Brian C. Adams: Like, even the big banks are struggling with this, right? But…

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Brian C. Adams: I think we're really close, like, we're a step away from being able to have…

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Brian C. Adams: huge data resources that are searchable, actionable, and operational through large language models, and I think AI is going to be a huge boon.

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Brian C. Adams: what I tell most folks is, I hope it comes soon, because the families I know

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Brian C. Adams: the professionals are stretched thin, they're under-resourced, they're overworked, and if this can help make things more efficient, and the delivery of service better, that's great, and I hope it really does work, but…

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Brian C. Adams: you can't just let this information out into GenPop, as my wife puts it. It's way too dangerous, so I think that's what everyone's waiting for, is the ability to have some kind of customized privacy pooled data that you can actually start leveraging.

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Mark Wickersham: Yeah, I think AI with family offices is… it's a lot like teenage sex. Nobody… everybody's talking about it, nobody knows anything about it.

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Brian C. Adams: Yeah, I mean, the families that I work with, no one's actually doing anything with it. I mean, they're just kind of talking about it, but on a day-to-day basis, other than, like, Claude, just to teach you stuff, no one's actually using it in their workflows, in my experience, so….

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Mark Wickersham: I do see it has an enormous potential, I think, for family offices in a couple areas, and you've touched on these. One is it…

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Mark Wickersham: The elimination, or the great reduction in that low-value first-mile process, and you're seeing that with alternative investment data solutions, like.

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Mark Wickersham: It used to take a CFO or a high-level executive to interrogate a document, a capital call, or evaluation statement, to be able to really translate that into a proper financial or investment data. Now you're seeing that kind of first-mile kind of…

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Mark Wickersham: So I'm almost eliminated with the solutions that are out there. I mean, there's so much of that information, too, is…

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Mark Wickersham: within alternative investments and even legal documents and trusts and wills and estates, they're in documents, they're in unstructured data, and the ability for AI to be able to unlock that is huge.

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Brian C. Adams: Yeah, I mean, I… again, we have 23 years' worth of data.

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Brian C. Adams: And I can only port so much over into HubSpot, it's just not manageable. And so what a lot of families do, I mean, you tell me, but I think when it comes to all this legacy data they have.

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Brian C. Adams: They just, at some point, say, hey, starting Jan 1, we're just gonna move forward with this data set, because it's too painful to migrate all this legacy data over.

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Brian C. Adams: If AI could solve that problem, it'd be great, right? But I just don't think we're quite there yet.

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Mark Wickersham: Yeah, I mean, that historical data is a challenge for a lot of family offices with technology implementations.

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Mark Wickersham: it can be really expensive, the more data you… historical data you bring over, and often, like, the quality of that data, the older it gets, the less… the lower quality it is, and AI really needs high-quality data that get the results that…

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Mark Wickersham: that you want, and certainly, when you look at, like, general ledgers or investment accounting systems, I call it a land war in Asia when you're trying to do, you know, since inception, data conversions. I mean, you have to for alternative investments, but, you know, financial accounting, like, yeah, let's load up that balance and go forward, and…

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Mark Wickersham: and call it a day, and then go back to that old system when you need to. I think it's a little bit more of it.

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Mark Wickersham: …

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Mark Wickersham: with all the technology that is coming out, we're talking about the AI, certainly, the family office-specific solutions, a lot of point solutions that are being done. Will… does this… will this cause family offices to modernize, or is the state…

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Mark Wickersham: family offices, because they're a cost center, just the nature of it, that they're just gonna be a bit more of a lagger. Also, the risk that you're seeing with cybersecurity now, is… are we at a precedence where the technology conversations… the opportunity is just too great, and it's going to cause modernization, or are we going to be more in a steady state?

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Brian C. Adams: I think we're at a tipping point. You know, you think about… I don't know what the numbers get thrown around, but every day, X amount of baby boomers retire, right? Or, you know, I think we're now…

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Brian C. Adams: where…

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Brian C. Adams: There's… there… we're now over the edge of… baby boomers are now on the majority past 65 years old.

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Brian C. Adams: And so, there's this huge transition occurring. I mean, leadership-wise, like, we get a phone call once a week.

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Brian C. Adams: Which is great, I mean, we're thankful for it, and we're busy, but I do think there's a lot of next-generation folks who have been in the wings, waiting for the ability to make these type of decisions, and

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Brian C. Adams: I mean, they just digest data differently, and they expect much different experiences from their third-party service providers, and…

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Brian C. Adams: they're getting it from their banks, or from, you know, their friends, or their social networks, or in their day jobs, and they're going to force the families to change. Like, it's going to happen, or they're going to lose the assets. Because if there's not a value prop there.

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Brian C. Adams: they'll go somewhere else, and so I think it'll force the change to occur within everybody, just has to.

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Mark Wickersham: Yeah, I think that makes sense, that next gen driving that. I mean, there's been this kind of consumerization of IT that's gone on, where you kind of… you log on to your brokerage account, and you can see not only yesterday's balance, but real-time information as things go along. You get it on your mobile phone, you have access to that information on the device you want, and the way you want it, and.

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Brian C. Adams: I mean, even… even drafting our position descriptions now, like, if I can't see it on my phone pretty clearly, I don't send it out. Yeah. Nobody looks at it.

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Mark Wickersham: And then they go to their family office, and it's the, you know, the report binder 60 days after quarter end.

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Brian C. Adams: We talked to one recently that still was using Lotus Notes.

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Mark Wickersham: God. I didn't know they could still run.

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Brian C. Adams: It was unbelievable.

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Mark Wickersham: So there's… there's a group out there, people love that product. No, I love it.

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Mark Wickersham: NextGen, let's keep on that thread a little bit. What… how is NextGen impacting the industry, and how can family offices, you know, keep, you know, better involved in next generation?

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Brian C. Adams: Yeah, it's been interesting because, this… this generation of leadership, right, so we'll just kind of

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Brian C. Adams: throw a term of baby boomers out there. They've lived longer, been more productive, and been engaged longer than anyone would have anticipated. When I joined the family office world 20 years ago.

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Brian C. Adams: NextGens were, like, people under 30.

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Brian C. Adams: And then it was 35, then it was 40, then it was 50, and now it's just rising, John.

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Brian C. Adams: Because these folks, they lived a lot longer than anyone expected. They've been in leadership a lot longer than anybody expected, and so they've really leapfrogged a lot of what would be referred to historically as this next generation. And so now, I think it's just…

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Brian C. Adams: It's a much…

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Brian C. Adams: bigger population set, and that's why I think you're gonna see a shift towards third-party professional management in a lot of these firms, because the leadership lag has been so large.

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Brian C. Adams: that many of them are now… I've had a day job my whole career, and I've never been in a leadership position, and so I'm just gonna have a third party run this.

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Brian C. Adams: What we always encourage families to do is, …

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Brian C. Adams: You know, because there's a lot of hesitancy to let go, obviously, is… there's a difference between giving people a voice and a vote.

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Brian C. Adams: And there's a lot of ways that you can give people a voice. Independent board members, search committee leadership, family council leadership, investment committee, all kinds of different governance structures.

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Brian C. Adams: And so we're seeing more of that early on, and engagement, and more next-gen education occurring, but, you know, we just really encourage people to get them involved early and often, and again.

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Brian C. Adams: There's a difference between voice and a vote. It costs you nothing to give them a voice.

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Mark Wickersham: Love it. Let's, …

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Mark Wickersham: take a look, it's 3, 5 years out. I know it's a dynamic industry, there's a lot of change. I think the one thing you could say is, you know, change is gonna be part of the future, but where do you see the industry in 3 to 5 years? What lies ahead?

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Brian C. Adams: I think there's huge amounts of… and I'm talking my book, but I think there's just huge amounts of tailwinds here. …

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Brian C. Adams: from a generational transition perspective, I think there's going to be… one thing people, I think, really underestimate is the power of what some of the advanced estate planning techniques instituted in the 80s have done.

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Brian C. Adams: And so there are inheritors who have their own family offices. I think the world of unitary trusts

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Brian C. Adams: that were pretty common 50-plus hundred years ago. I think they're coming to an end, and when they splinter, a lot of those branches and individuals are gonna have their own family offices. I think…

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Brian C. Adams: The last 20 years, there's been a huge amount of wealth creation, and there are going to be new and continued de novo family office formation.

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Brian C. Adams: And so I think the space is in the third inning, maybe? You know, to use a baseball term. I think we're really early days. And the thing that astounds me, and I'm in the space all day, every day, like you are.

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Brian C. Adams: Every day, I get 3 or 5 calls, emails, LinkedIn notes from another family that I never knew existed.

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Brian C. Adams: And I just keep thinking, oh, like, this'll end in September, but it just keeps coming. And there's just… it's a much bigger ecosystem than I think I ever appreciated before.

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Mark Wickersham: Do you have a sense of how many single-family offices there are in the U.S? Any….

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Brian C. Adams: This is a number that I…

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Brian C. Adams: Talked to a lot of people about…

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Brian C. Adams: I think it's north of 8,000.

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Mark Wickersham: Yeah, yeah, I heard, somewhere, or soon to be approaching 10,000.

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Brian C. Adams: I think it's… yeah, I mean, I just think it's… I think there's a lot of folks out there.

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Mark Wickersham: And obviously, there's a lot of modality in what is a family.

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Brian C. Adams: Yeah, I mean, you could quibble about, like, what qualifies, but….

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Mark Wickersham: Yeah.

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Brian C. Adams: you know, You know, if we just take the most general definition.

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Brian C. Adams: Whatever number you get thrown around, I think it's probably 50%. I think it's 2X whatever number you hear in reality.

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Mark Wickersham: …

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Mark Wickersham: Yeah, it's a… there's a lot of growth in this industry, and it's going to continue to do so, and certainly the U.S. is… is… is a lot of….

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Brian C. Adams: And if you just look at the world politically about this increased regulatory and privacy challenges, more and more people are going to want control, customization, confidentiality, discretion, privacy, like, that's just… there are these two diverging things that are both happening simultaneously.

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Mark Wickersham: That winning business model. So…

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Mark Wickersham: This has been great, Brian. I like to end my podcast on a personal note with three questions that have nothing to do with WealthTech, or in this case, family offices. You went to school in the Northeast, you now live in Nashua. How would you compare the two cultures between the Northeast and the South?

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Brian C. Adams: Yeah, it's interesting, I mean, I'm from upstate New York, like, basically Canada, and went to school in New England for most of my life, and then moved to Nashville 20 years ago. …

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Brian C. Adams: it's not, frankly, from where I grew up relative to Tennessee, it's not that much different politically and socially. I mean, very conservative people that like to be kept to themselves. I would say the biggest difference is just the, … it took me a while, but the genuine…

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Brian C. Adams: friendliness factor. You know, I always tell people that move here from New York, and they kind of…

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Brian C. Adams: They get… they get down here, and they have coffee, or whatever, we do networking, and…

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Brian C. Adams: they jump right in, and I'm like, dude, you need 12 minutes of faith, family, and football. It needs to be 12 minutes. Like, you can just set your timer, but you gotta do it before you jump into the business stuff, because it's just way too much, but people are just not going to react well, so….

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Mark Wickersham: People start talking to you in the elevator, right? When you're from the Northeast… Yeah, it's just not. What are you doing?

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Brian C. Adams: Yeah, it's not gonna work down here. It took my wife a while to train me up, but I think I'm there, kind of, now.

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Mark Wickersham: Speaking of your wife, you married into a family where one of the founding fathers, Robert Morris, was one of two people that signed the Declaration of Independence and the Article of Confederation and the Constitution. Could you share some more details about Robert Morris? I didn't realize there was even two people that signed all three documents. I found that fascinating.

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Brian C. Adams: Yeah, it's interesting. So, Robert Morris and Gouver Morris are kind of one of the… two of the founding, they all… and they hated each other, apparently. …

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Brian C. Adams: two of these, kind of, founding fathers of America. It's really interesting. My wife's family, came… my father-in-law's family came over here a long time ago, and, there's,

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Brian C. Adams: a neighborhood in the Bronx called Mauriciana.

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Brian C. Adams: Merciana was their, kind of, family estate, and this is, like, a million years ago, right? So it's a different world, but really cool history of… you referenced the Constitution, Articles of Confederation, the Independence, Declaration of Independence. They helped finance the Revolutionary War, started the…

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Brian C. Adams: 21 Club, they're the Red Jockey, so they're the oldest silks in North America, they're just red. So they're in the horse business for a long time. They were in the private cemetery business.

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Brian C. Adams: private lottery business. They've done a lot of different things. I remember my father-in-law telling me.

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Brian C. Adams: Recently, that I guess this would have been his… great-grandfather?

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Brian C. Adams: There might be another grade in there, but his phone number was 4.

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Brian C. Adams: Right? I mean, just old New York stuff, which is really interesting and cool, and … but I will say, it's not all… I mean, they have a lot of… they had their challenges over the years, but that… that world and that history is fascinating, and …

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Brian C. Adams: Every once in a while, you get him open up, and he has some really interesting old stories about it, so….

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Mark Wickersham: Love it. Is there a particular book that you're reading that you'd recommend to the listeners?

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Brian C. Adams: Oh my gosh. I love, like, novels and, science fiction, and I love detective novels. Right now… what am I reading?

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Brian C. Adams: … I'm going back and reading the, …

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Brian C. Adams: the, the Harry Bosch novels.

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Brian C. Adams: ….

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Mark Wickersham: Oh, the Bosch, I've seen the TV series, yeah. Yeah, so those were… Is the book better?

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Brian C. Adams: Well, there's, like, 25 of them, so… they started in, like, the early 90s? Yeah, yeah, so I'm, like…

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Brian C. Adams: … I'm reading those for the first time, and they're great. But this… again, it's interesting, they take place in the 91-92 era.

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Brian C. Adams: And, you know, everyone's, like, smoking cigarettes and having to use payphones and things. It's kind of interesting.

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Mark Wickersham: I'm a typical old dad, I like the World War II books, so I've been reading the, … I just finished the Rick Atkinson, three-part series on World War II in Europe, which I found fascinating.

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Brian C. Adams: Well, I'm listening to the hardcore history.

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Brian C. Adams: Dave Carlin, his stuff is incredible, so….

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Mark Wickersham: He also has a three-part series on the Revolutionary War, which I'm looking forward to.

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Mark Wickersham: getting into, but, it does a great job of kind of bringing it to life with these little details that kind of make history kind of come alive, and there's a lot… I think there's a lot of good history like that out there now. It isn't just all facts-based that they're doing a good job. Even the fictional history is kind of based in the…

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Mark Wickersham: fact, could be a great way to learn about history, so, anyways, this has been fantastic, Brian. I appreciate you coming on the, WealthTack podcast. Thanks for coming on.

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Brian C. Adams: Thank you for having me, Mark.