Although the weather regrettably kept me away from last week’s Ivy Family Office Forum in New York, while digging out I spent some time thinking about the challenges the family office faces as it grows with investors.
After the financial turmoil of the last few years, wealth is on the rise again. But things are a lot different. Investors remain concerned and somewhat leery of U.S. markets, banks and advisors. High-net-worth and ultra-high-net-worth individuals are turning more and more to the family office for trust, personalized attention and cost-savings traditional wealth managers can no longer promise.
While this is all good news for the family office, there are also new challenges on the rise.
The HNWI and UHNWI market has matured. These investors have been forced into thinking more critically about the best ways to build, preserve and transfer their wealth across generations. They invest globally and diversely. They stay on top of performance. And, they insist on 100% transparency.
They have embraced technology to make all this possible—and their advisors must keep pace.
The family office must provide the real-time, self-service information delivery clients demand, while meeting the regulatory and operational requirements of growing a successful investment management business. Cobbled-together, best-of-breed systems and bloated headcount are not long-term or affordable solutions.
They recognize the need to grow capabilities to keep up with clients, but wonder how to bring their infrastructure up to par. As it turns out, the answer lies in their own business model.
Family offices are, by nature of their business, partner-oriented. Like their clients, they can be best served by relying on a single, knowledgeable, trusted partner. Such a partner can provide the technology and services to support the most difficult, time-consuming tasks—from managing, aggregating and accounting for investment data to pushing it out to investors in a secure, timely, accessible way—and help them cost-efficiently keep pace with client demand and technological advances as their business grows.
Learn more about operational outsourcing.