Although family offices have been around since the 1800s they are not as common today. A 2019 Global Family Office Report from UBS and Campden Wealth found that 68% of the 360 family office surveyed were established in 2000 or later.Many factors are responsible for their rise, including tech startups that make new billionaires and centi-millionaires every year, as well as the increasingly difficult choices that people with a lot of money face. Consider household administration, trust and estate management as well as personal investments and charitable ventures.KPMG reports that family offices are more likely to serve people with $1 billion or more in investable assets. Multi-family offices that share resources with other families are more likely to target people with less than $20 million. This high standard means that there are still many people who have a lot to offer assistance.Harness Wealth is a New York-based, three-year-old company that was established by David Snider, Katie Prentke English, and is designed to help individuals with more complex financial situations, such as those affected by liquidity events. They know how one's vested interests can change suddenly and how difficult it can be to manage them when you work full-time.After starting his career at school, Snider was an associate with Bain & Company. He then became an associate with Bain Capital. In 2013, Compass hired its first business employee. Following the $25 million Series A raise in 2013, Snider was promoted to the position of COO and CFO. Compass grew rapidly and, just four months after its March IPO, has a market capital of almost $27 billion.Snider, who returned to Bain as executive-in-residence following 4.5 years at Compass, saw an opportunity to combine often siloed business like tax, estate, and investment planning. I was drawn to it because it was a good fit for me. Despite all the great things I have on my resume, I still find something I should or could have done differently with my equity.Prentke English has a lot in common with Harness Wealth's clients. After more than six years spent at American Express, she was appointed as the CMO for Nutmeg, a London-based online investment manager. After being introduced to Snider by a mutual friend, she left her role to launch Harness. Nutmeg was recently acquired by JPMorgan Chase.Although there are many wealth managers available to help such people, Harness claims it does more than just match them with the right registered investment advisors. This is part of Harness' business model and the secret sauce behind its tech platform. It helps customers connect with pros in a variety of verticals, similar to the access that an individual would have if they had a family office.Harness collects a portion of the fees that platform advisers charge to use their services. Snider said that the percentage can vary, but it is an ongoing revenue share to align with our clients. He also stated, "We only do well if our clients find long-term success with advisers on the platform," rather than if Harness simply collected a lead generation fee.The company believes it can eventually replace many of the do-it yourself services on the market like Personal Capital or Mint. It also suggests that it is making progress with a growing base of customers that includes employees at Coinbase, UiPath and Paypal as well as partners from venture firms.Snider says that Compass's early days were a part of Sniders confidence. While it was able to navigate around agents, it found that people needed better data insights and UX. However, people also desired someone with a lot of clients like them. After discovering that Nutmeg was also limited by a non-human-powered solution to its problems, Prentke English joined him, he said.The thesis is deemed sensible by investors. Jackson Square Ventures led the Series A financing for Harness, which brought Harness' total funding up to $19million.Harness Wealth will use some of the capital to create its own captive business line, Harness Tax. Snider explains that more clients are concerned about tax planning, due to all the happenings on the IPO front with SPACs and remote work as well as with cryptocurrencies, which are attracting more money, but the tax code is still playing catch up.This is understandable, as tax planning can be very time-sensitive and often dictates the overall financial planning strategy. It is also possible that Harness Wealths' adviser partners may be reluctant to work with Harness Wealths if they feel their partner is becoming a competitor.Snider claims that Harness Wealth, which employs 22 people but is not yet profitable, has no such plans. Our goal is to only help people where we add value and Harness Wealth, which currently employs 22 people, has no such plans. He says, "We want to make sure we are front and center and available to help as necessary."Other Harness Wealths investors include Bain Capital, Torch Capital, Activant, GingerBread Capital, FJ Labs, i2BF Ventures, First Minute Capital, Liquid2 Ventures, Alleycorp; Marc Benioff; Compass founder Ori Allenon; and Paul Edgerley who was previously co-head at Bain Capital Private Equity.
