By Alex Radosevic
Because the history of family offices traces back to the earliest days of the Rockefeller family, the mere mention of the term conjures up in the minds of the ill-informed images of family patriarchs and matriarchs sitting around the living room debating how best to preserve and grow their wealth, perhaps absent the use of any discernable data, at least by today’s standards. Some may also think that decisions were based upon the use of arcane methodologies and the use of antiquated modalities for the conveyance of information.
Not only is this an oversimplification of how things used to be but additionally, nothing could be further from the truth with regard to how astute family offices operated. It is also true however that generational and technological change go hand-in-hand. Those of us that serve family offices successfully and have an intimate understanding of how they operate also recognize that the most effective family offices embrace change, rather than eschew it. As a thought leader that speaks at family office conferences across the country regarding technology and how it can be used to promulgate the goal of wealth preservation and growth, I am a strong advocate of family offices leveraging technology to effectuate their goals.
There are many ways that family offices can use technological advances to gain an ever-increasing ROI from how they manage their financial affairs. Let me share just a few of those ways with you.
First, it is the goal of every family office to operate as efficiently and cost-effectively as possible. Today there are a myriad of technological tools and solutions that can help family office executives and their advisors do exactly that. While the well-known Excel spreadsheet product was the norm in the earliest days of computer use the advancing march of software solutions that allow family offices to maintain, correlate, analyze and sort data faster and more effectively is astounding! All of them are designed to save time, avoid manual entry, and minimize if not eliminate the possibility of human error. As the saying goes: ‘Time is money.’ And human error costs money. If there was a family office version of the Smithsonian, Excel might find its way there someday soon.
Advances in the area of cybersecurity and data encryption and protection is of particular importance to family offices and high net worth individuals. With the uncharted and even unregulated growth of the internet and the globalization of information, families have been at risk relative to their data and information. Fortunately, advancements in cyber-security have enabled family offices to operate far more securely now than they ever have before. Many operate family portals safety, securely and in comfort – with differing, secure access privileges and permissions granted for different family members, employees and advisors. There are also advanced programming solutions that allow for communication and document management in a centralized and secure online environment. Why? The ever-changing forward march of technology!
With regard to the management of assets and the evaluation of investment opportunities, there is exceptional software available – including artificial intelligence-based programs – that offers access to key, pertinent information instantly, which is a decision-makers dream! They can have data at their fingertips from any of twenty-four time zones literally in an instant, and within a few keystrokes can forward instructions or execute decisions. Add constantly evolving analytics programs to the mix and these same decision-makers can have information analyzed against their own set of performance criteria just as instantly, allowing them to pull the trigger (or not) with regard to financial decisions in not just an instantaneous but also, a very well-informed fashion.
The good news for many family offices is that they have access to outside experts and advisors that are especially adept and up-to-date in the use of technology related to all aspects of financial service. This allows for the best of both worlds: reliance on the most cutting edge technological tools available in the marketplace today coupled with the advice and counsel of the advisors they have come to know and trust.
The list of ways in which advancements in technology have improved the functionality and most importantly the profitability of family offices is staggering. This article merely scratches the surface. The best is yet to come!
Media Contact: Karen Norris – Karen@CanonProperties.com