I’m starting two lists – one will be an overview of supplier meetings this week (found here, only ever available to Member Subscribers) and the second will be this one on where the current demand for family office solutions is focussed. The aim is to give a snapshot of the challenges we are trying to solve for families.
Each one comes from the office themselves, supplier feedback on current demand of advisers that deal in this space (such as Hall Road).
1) FO best practice – as the proliferation of family offices continues, there is a real need for feedback on how the most successful are run. This can range how to get started, all the way up to finding very specific efficiencies across investments and operations.
When I say successful, I don’t mean outperformance, often it’s those that are managing to the stated goals and having simple, cohesive and secure operations.
2) Roles and responsibilities – including how to set up appropriate job descriptions, the specific roles that each family office needs (or can do without), how much do they insource and how much time do they need to allocate to managing the office.
3) Accounting infrastructure – lots of families are looking at reviewing or changing their GL software. The reasons often cited are the operating businesses are winding down and they need a simpler, more integrated software platform more aligned to investments.
4) Capital Call management – this is a big one for a lot of families as the recent increase in private market investments has increased challenge of managing a significant amount of capital calls. We continue to look at offloading some of the heavy lifting to managers, families installing a specific software solution or making sure that any new reporting platform can manage this process.
5) Wealth Manager Due Diligence – getting referrals, making sure that the personality and firm match the needs of the office, deep dives into their technology, investment philosophy and a range of other touch points before engaging a new firm.
It’s a major decision to engage a firm or group to manage your assets and history is full of regrets from those that didn’t do the legwork first. I have been part of this process a number of times over the years and it’s always good to see firms and people match up well but equally concerning when they don’t. My recent article on the different types of advisers may be helpful.
6) Internal benchmarks – as portfolios tracking platforms increase in sophistication as they come down in costs, there is a greater focus on benchmarking. This is for both external managers as well as internal managers. It’s a two-way street too, internal performance benchmarks are an important way for those doing a good job to be compensated.
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