Carone in YPO Newsletter: How Top Family Offices Approach Negotiations

Marina Gallardo
August 15, 2023
Credit: Medienstürmer on Unsplash

The best family offices employ time-tested methods for striking fair and mutually advantageous agreements with their providers, Oaktree Solutions Founder and Chairman Frank Carone explained in an email newsletter article sent to YPO members worldwide.

The article, “How High-Performing Single-Family Offices Maximize Provider Relationships,” was written by Cliff Oberlin, chairman and CEO of Oberlin Wealth Partners. In the piece, Oberlin argued that the private wealth industry is strongly tilted to favor providers rather than clients.

Part of this is structural, Oberlin explained, noting that the complexity of client situations and the opaqueness of much of the private wealth industry results in compensation arrangements that do not match the value delivered.

In response, the ultra-wealthy are increasingly establishing single-family offices. But, while most single-family offices can separate the wheat from the chaff regarding providers, Oberlin wrote, there are still significant challenges when it comes to getting the best deals that accurately price expertise. That’s where the best single-family offices are able to achieve superior results through negotiation.

Quoted in the article, Carone, co-author of Everyone Wins! How You Can Enhance and Optimize Business Relationships Just Like Ultra-Wealthy Entrepreneurs, explained the nuance required to achieve results.

“Negotiating compensation in any business environment habitually requires high finesse. The objective is for the single-family office executives and the providers to exit the negotiations confident that the outcomes are in everyone’s best interests. The single-family office gets a good price for services, and the providers are paid well, but likely not as well as they prefer. There are proven, time-tested methodologies that single-family office executives can use to get the desired results and ensure they’re cost-effective.”

Russ Alan Prince, a strategist for single-family offices and co-author of Everyone Wins!, is also quoted in the article. He emphasized how the right compensation structure can achieve optimal outcomes for the entire family.

“Single-family offices are expert coordinators of experts. They are best suited to meet, if not exceed, the expectations of ultra-wealthy families. The executives at the single-family offices have an in-depth understanding of family members and can leverage the best specialists in any field. With the proper compensation structure, senior management is well-motivated to do what’s best for the family. The complication holding back some single-family offices is failing to maximize provider relationships.”