family office technology

20 Questions That Were Answered at the Family Wealth Report Summit 2019

“The Only Thing That Is Constant Is Change.”

Heraclitus, Greek philosopher, c.535 – c.475 BCE

The private wealth management industry is constantly evolving.  Single family offices (SFO’s), multi-family offices (MFO’s) and the private banks of large wealth management firms are all vying for control of the assets of an ever-growing community of increasingly wealthy clients. And new technology has become an integral part of their ongoing management and communication to their families.

This article is my summary of the 4th New York Family Office Fintech Summit 2019 presented by Family Wealth Report.

The Latest Research

I find industry research to be some of the most useful information shared at conferences.  Family Wealth Report presented some solid data that provides valuable insights into private wealth trends in their latest report Family Office Focus: Efficiency in Accounting and Investment Analysis.

Why are SFOs more heavily weighted in alternative investments than MFOs?  Lawrence Calcano, CEO of iCapital Network, explained it this way:

“Single-family offices are in a unique position in that they have large sums of patient capital and generally lack significant payout commitments. As a result, they have become very comfortable trading liquidity to capture incremental return, and are able to embrace volatility and complexity to their advantage in periods of market dislocation.”

This is related to the trend of more SFOs leveraging cross-border tax arbitrage opportunities as their holdings and families are spread out across multiple countries with different regulatory and tax jurisdictions.

Considering the percentage of family office assets invested in illiquid securities, it’s not surprising that so many still rely own manual processes and Excel/QuickBooks.  They should definitely take a look at the automated accounting, general ledger and investment analysis software provided by FundCount.

Embracing Disruption

This was the keynote session and was focused on leveraging technology to redefine the value of advisors.

Cresset Asset Management COO/CTO Nimesh Patel shared some statistics that in family-owned business, 67% of the CEOs are over 57 and 30% are over 67.  The number of sales or generational transfers will only be increasing in pace as these CEOs retire.

With the market seeing some of the highest private equity valuations in history, Patel predicted the coming shift of current entrepreneurs into what he refers to as “capital-preneurs”. These are formerly family-owned businesses that move from running their business infrastructure to managing new found capital.

A study of 3,250 families showed that there was a 70% failure rate of long-term wealth management where is had dissipated by the 3rd generation. This was primarily due to poor communication and lack of trust.

I found this to be a fascinating slide.  57% of total assets will one day be transferred to a Generation X household, yet they have the second highest usage of self-directed accounts.  Old wealth brands and startups alike now have an opportunity to target this segment or miss out on a significant asset shift.


GDPR and privacy in general can be a somewhat dry topic. But moderator April Rudin, CEO of The Rudin Group, did a fantastic job preparing and turned this into one of the best panels of the day.

One of the key points made in this discussion was that everyone needs to accept that GDPR is inevitable and ignoring it will only make the required changes that much more difficult and expensive to implement.

Another point made was that firms should not collect data that they do not absolutely need. This is why I included the above article as a reference to why people should be more than a little concerned about what data they are sharing with companies.

Privacy should be a high priority for all of us, but it is all too often ignored. In our 24/7 online world, we’re being monitored and followed more than ever by more companies that you know:

These organizations don’t just record what we click on or share, but analyze our online activity to compile complex demographic and psychographic profiles about us—so they can manipulate us into doing their bidding, whether that’s clicking on ads they serve us based on the data they hold about us or getting us to interact with their sites more and share even more information about ourselves.

Bob Miller, CEO of alternative investments data aggregator, Private Client Resources (PCR), warned that family offices must embrace GDPR and increase their consciousness about its impact on both their clients, processes and technology infrastructure.

Integrated Technology Solutions

This session was run by Tania Neild, CEO of data management firm InfoGrate. She can be reached at

Neil, who has a Ph.D. in Computer Engineering and is the former CTO of Envestnet, has a unique methodology for analyzing how well a family office is managing their technology. It is a “Technology Myers Briggs Test” that determines how the organization as a whole adopts technology solutions. Are they too risky, too inflexible, not integrated, not broad functionality, etc. It is a unique way of looking at things.

Neil’s panel consisted of three of her family office clients and she presented an terrific overview of each firm’s technology, their business requirements and problems that they overcame.  Most of the points that were made would be useful for any SFO/MFO:

  • Consistency is King – A more consistent approach will always deliver a better user experience.
  • When changing technology, always define what is the minimal functionality that would be acceptable in order to launch, then break the project into phases, and try to minimize parallel operations.
  • When a new feature request comes up, ask “is this a standard offering?” In other words, don’t get into the software  development business!

NextGen Family Office Technology

This panel was moderated by Doug Fritz, president of consulting firm F2 Strategy.

Despite all of their problems and the fact that they are sometimes trailing in the adoption of the latest technology, single family offices will not go away because they still provide value via their deep understanding of their family members and their ability to apply technology to all parts of the business, according to Tricia Haskins, VP of Digital Strategy & Platform Consulting at Fidelity Institutional.

Disjointed communications inside a family office as well as with external partners can seem like ping pong balls bouncing back and forth, stated Darren Berkowitz, Managing Director, SS&C GlobeOp Fund Services.  Some ways to reduce friction include implementing straight through processing where possible, pricing your book on a T+1 basis, and leveraging artificial intelligence to reduce the efforts needed for reconciliation.

Best Practices in Family Office Technology

A wonderful mix of technologists across the spectrum of family offices and vendors shared best practices in buying and implementing office technology

New technology can pay for itself very quickly, reduce errors, and improve efficiency if it is implemented correctly, stated Howard Geller an analyst with Hudson Peak Group LLC who works primarily with SFOs.  In most cost-benefit analysis, reducing the cost of reporting is one of the most important drivers for new technology, he noted.

Here’s a shocking insight: Most vendors over-promise on delivery time! I wish more clients would realize this is the case 99% of the time! An excellent question to use during your vendor evaluation was posed by Sergei Bourlatski who is CEO of family office AnantaFO. It is, “Can you tell me about an implementation failure you had and how you addressed it?”

Every vendor will be happy to share stories about their successful implementations. But very few will discuss their failures. And trust me, they all have them! This is a terrific way to find out more about how your potential vendors handle adversity and whether they plan for all contingencies.

There is a choice that needs to be made at every step in the technology selection process between improving the user experience and reducing the firm’s risk exposure, explained Stephanie Notarianni, Managing Director of Operations & Technology at family office Pitcairn.  Sometime the opportunity costs are difficult to quantify, she added, and described how her firm delayed the implementation of Microsoft Sharepoint until they could be absolutely sure that the impact to internal operations would minimized.

Communication is probably the most critical aspect of successful family office technology implementations, according to Ted Argus, Senior Manager, Technology Implementation Consulting at SEI Archway.  Their standard implementation project includes three different types of meetings, each of which has a specific purpose: 1) monthly sponsor meetings, 2) weekly status team meetings, and 3) ad hoc unstructured meetings for Q&A.

Argus also shared three areas of family office reporting that should be considered during any vendor evaluation:

  1. The knowledge, skill set and interest of the end family member;
  2. The investment asset classes; and
  3. The entity structures of the trusts that own the underlying partnerships.



The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at