Family office led by former Abbot Downing president tops $5B in AUM

A family office that launched after Wells Fargo consolidated its ultrahigh net worth Abbot Downing unit into the firm's private bank has topped $5 billion in assets under management.

Philadelphia-based Callan Family Office launched in February 2022 with the branding and relationship as "a very close strategic partner" to institutional investment advisor Callan that doesn't include any ownership, Callan Family CEO Jack Ginter — the onetime president of Abbot Downing — said in an interview with Financial Planning. On April 3, the firm announced that its AUM had passed $5 billion due to its organic growth under 23 partners, with many among them and Callan Family's 16 other employees having prior tenures at Abbot Downing.

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The firm can now focus on adding potential recruits and exploring technology solutions like how best to leverage data in support of its ultrarich clients, who have an average of $100 million in assets and must meet account minimums of at least $50 million.

"This first $5 billion is really driven by organic growth," Ginter said. "It allows us to continually invest in our firm on behalf of our clients. That's one of the reasons that we're excited about this milestone."

Family offices have been growing in size and number as one of the most important channels of independent registered investment advisory firms. Private bank advisors often leave giants of the industry to start their own RIAs and frequently add teams from their prior firms. The amount of potential clients for multifamily offices and other firms catering to high net worth customers is rising as well: The number of U.S. households with financial assets above $5 million jumped 44% between 2019 to 2022 to 2.35 million — and their share of the nation's wealth expanded by four percentage points over that span to 46%, according to an analysis of consumer finance data from the Fed by research firm Cerulli Associates.

The term "family office" is turning so ubiquitous amid that expanding wealth that there has been "a dilutive effect of every Tom, Dick and Harry that says they do family office services for those who actually do provide them," according to Jamie McLaughlin, founder of J.H. McLaughlin & Company, a wealth management and RIA consulting firm specializing in private banks and single and multifamily offices.

He provides clients with a list of around 100 different categories of firm capabilities as part of a spreadsheet McLaughlin calls the "family office master list of services" that include everything from family dynamics and psychology to almost any possible financial need. Callan Family and Charlotte-based New Republic Partners are "the two new entries that I have a lot of respect for," McLaughlin said in an interview.

"Callan is a really fine new entry in the world of family offices," he said. "Their heritage, their service platform, everything they're doing is distinctive. They are a new entry, but I think it's a distinctive approach."

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In 2021, Wells Fargo dropped the Abbot Downing brand, which at one point had $50 billion in AUM. Ginter was interim head of the private bank before leaving to start Callan Family. Last year, the firm began a family governance and education program called Endure that offers teams of consultants on multigenerational transitions and other family issues. Earlier this year, Callan Family bulked up its financial administration services into areas like bill pay, cash management and reporting.

"It's about the service model that you have and the services that you're delivering. We're very intentional about providing a high-touch service model," Ginter said. "This solution set that we offer is expensive to replicate, and we're able to offer that to families in a way that is completely customized to what they're looking for."