There are more solutions, consultants, and services available to Family Offices as compared to just a couple of years ago. If you are still in the technology realm of QuickBooks and Excel, then it is time to evaluate the solutions available to address the key areas of operations within the business practice. We usually see investment management being addressed first as the various investment vehicles selected by the investment team can cross Hedge Funds, Private Equity, Direct Investments, market investments, and many times this is not just US based.
Now you select a solution to track the investments and timelines for future cash flow requirements, who is going to operate this platform? When you use a SaaS solution to provide your investment management reporting and tracking, information still needs to be manually entered into the system. Most commonly around private investments, you need to add this feature or manually enter this. Then you need to have someone reviewing the numbers and analytics as it is “garbage in, garbage out”. This is an example of one area where outsourcing the operations may be better suited for the team than having someone try to learn a new system or try to put this on someone else’s plate internally as now it becomes more of a “part-time” role of the management of the investment management solution.
Then there is accounting, legal, tax, philanthropy, family governance, cybersecurity, and other components that encompass the operational requirements of a family office.
The following report from RSM US LLP provides insight into the various aspects of design and changes that Family Offices need to think about when they are looking to enhance the operational structure of the business practice.