Long operating in a grey area, some multi-family offices have ventured onto real-estate turf, encroaching on the prerogatives of licensed professionals. After several reported abuses, Monegasque authorities carried out a clean-up, resulting in the closure of certain structures. Today, a code of ethics and a renewed dialogue between MFOs and real-estate agents are expected to restore sound practices in the Principality.
“Some multi-family offices have shut down, and we’re pleased about that.” This sentiment came up repeatedly among the real-estate agents interviewed. Why were they so angered by this activity? The issue was that several MFOs, benefitting early on from a certain degree of state leniency, charged for services they clearly should not have offered. In plain terms, they intervened in areas strictly reserved for regulated professions such as chartered accountancy, legal advice, financial advisory, and even real estate. Yet these activities require specific authorisations or licences, for example from France’s financial markets authority.
“Because it was a relatively new and loosely regulated sector, a few players benefited from undue latitude, and this harmed real-estate agencies,” notes Florian Valeri, manager of BARNES Valeri Agency. The same conclusion is shared by Jean-Yves Le Graverend, director of John Taylor Monaco: “A multi-family office turning itself into a real-estate agency is something I very much deplore. Each profession has its own role and expertise,” he says. According to the Monaco Real Estate Chamber, some MFOs had even made real estate their core activity. The situation escalated to such a point that the authorities intervened, sorting through the sector and closing several entities. “We simply observed, just as the government did, certain abuses. We reported them and welcome the fact that the authorities have now taken the necessary steps to enforce the law,” adds Florian Valeri.
A code of ethics within the MFO sector
Looking ahead, relations between real-estate professionals and MFOs should calm. Some multi-family offices have evidently realised that the conduct of a few had damaged the reputation of all. “A representative committee has been formed, and we maintain a constructive dialogue with its delegates. They have even drafted a code of ethics, which we have had the opportunity to review and discuss together. The code addresses these issues. We are satisfied with it—provided, of course, that it is actually implemented,” explains Alain Vivalda, president of the Real Estate Chamber.
Real-estate agents also stress an important point: they are absolutely not at war with this profession, which in their view meets a “genuine need”. “When the government encouraged the development of this activity, it was because it had identified a real demand in the Principality. Some ultra-high-net-worth residents have a single-family office because they have the means and a volume of affairs that justify it. But many others, although very wealthy, do not require full-time, dedicated staff,” notes Florian Valeri. “Multi-family offices allow clients to pool qualified personnel while benefiting from a transversal view of their wealth management.”
Building on a clean slate
Real-estate professionals are clear: multi-family offices have their rightful place in Monaco, but they are expected to remain within their scope and avoid crossing the red line. “We are not opposed to their involvement in real estate, so long as they do not substitute themselves for licensed agents by collecting commissions or carrying out activities reserved for the latter,” summarises Alain Vivalda. “Similarly, if they have an architectural project, they need to turn to an architect. If they require accounting expertise, they should consult a chartered accountant. And if they have legal matters or court proceedings, they must call upon a Monegasque lawyer. This does not prevent them from preparing or accompanying their clients internally, but execution must be carried out by authorised professionals.”
Outcry: “Business introducers who have turned real estate into their full-time job must not be allowed to continue”
Multi-family offices were not the only entities in the sights of real-estate professionals. Concierge companies were reportedly targeted for the same reasons, and according to the Real Estate Chamber, several of those structures have also closed. As for business introducers, there are two distinct cases, explains Jean-Yves Le Graverend of John Taylor Monaco: “The individual who occasionally brings us a client and whom we can thank for the introduction—that doesn’t bother me. It seems fairly healthy,” he says. “But the ‘introducers’ who have made it their full-time trade, who do this all day, are far more problematic. They effectively become real-estate agents, except they have neither a professional licence nor a formal structure. On top of that, they demand commission levels equivalent to those of agencies. Some even reuse our photos, our descriptions, publish listings on social media from accounts where they’ve built up a following, and then call us asking for 30 or 40% commission. These actors must not be allowed to continue.” The same concern is shared by Alexandra Chauvet, negotiator at Deplanche Immobilier Monaco: “Far too many people try to expand their activity and claim remuneration based solely on their network, without having the capacity—or even the desire—to properly follow up with clients. They do not truly advise their client based on their interests, but on what will yield the highest commission. This should be more strictly regulated.” The forthcoming bill or draft law on real-estate activities, currently being finalised, is expected to bring much-needed order to the sector.
