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How to optimize family office wealth management with technology


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In behavioral economics, there's a concept known as "loss aversion," which suggests a person will do more to avoid the pain of losing something they already have than to gain something they don't yet have.

This might explain why members of a high or ultra-high net worth family might be hesitant to embrace technology as a way to help with their family office wealth management.

In our latest resource, we explore the unique challenges modern family offices face. We explore how technology can make it easier for financial advisors and family members to manage wealth and maintain it for generations to come.

Attracting and retaining top talent

While family offices typically experience lower staff turnover than other industries, this is no time to become complacent. With 65% of employees looking for a new job, according to the latest PwC US Pulse Survey, family office employees are bound to be among them.

Employee expectations have changed since the pandemic began, and many are re-evaluating what they want from their workplace. They’re also expecting greater flexibility, including the ability to work remotely.

According to the PwC survey, nearly 80% of employees now expect to work remotely at least one day a week, with almost 20% preferring to be entirely remote.

To give employees the flexibility they’ve come to expect, family offices need to have the right technology and processes in place — including secure, cloud-based software employees can access anywhere.

Providing employees with the technological capabilities they need to work remotely can have an additional benefit for family office wealth management: you are no longer bound by geographical constraints in the search for top talent.

With an estimated 7,300 family offices worldwide, it can be difficult to find accountants with specific experience in this area, so expanding your talent search beyond a specific region is one way to ensure you're hiring the best people.

Simplifying investment management

In 1918, when the average life expectancy was about 39 years, a family office needed to survive about a century. Now that life expectancy is much higher, a family office needs to help its clients develop a wealth management strategy that will protect and sustain its legacy for much longer.

Not only that, but investment strategies for high and ultra-high net worth families are changing: no longer satisfied with simply maintaining their fortunes, wealthy families want their fortunes to contribute to their legacies. Many family offices are turning to venture capital and private equity as well as focusing on environmental and social governance (ESG) principles when planning their investments.

Without the right technology, driving strategy and analyzing opportunities from a values-based perspective might not be within your family office's bandwidth. Instead, it will be all you can do to simply keep track of the money as it leaves the family coffers.

A system that allows single family offices or multi-family offices to automate repetitive processes, such as sending investment opportunities to family members for approval or creating multi-entity financial reports for specific stakeholders, saves you and your team time they can use to research new investment opportunities or provide strategic insights.

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Supporting succession planning

Family office succession planning requires older family members to acknowledge their own mortality and face the idea of relinquishing control of the wealth they created.

While there's no silver bullet to address this difficult dilemma, the right technology can ensure a smooth transition to the next generation of leaders and by reassuring the older generation that the wealth they built will be managed properly.

Using a cloud accounting software system that allows your family office to track all its investments and enterprises in a centralized location is one way to streamline processes, provide visibility for older generations who may be preparing to transition out of leadership roles and ensure that no one person holds the only key to the entire family's finances.

Eliminating data siloes is becoming an increasingly popular idea in the workplace at large, with 48% of employers who responded to the PwC survey acknowledging they were updating their processes to become less dependent on institutional knowledge.

While family office succession planning ideally takes place in a thoughtful way over many years, abrupt departures do happen.

Having access to all your family’s wealth in one place — including multi-entity businesses, real estate and investments — makes it much easier to ensure a smooth transition.

Gravity: built with the family office in mind

Gravity Software is a multi-entity, multi-currency accounting software that provides your family office with a centralized location to track its diverse array of enterprises and investments.

Gravity is natively built on the Microsoft Power Platform to give your family office access to a myriad of time-saving, process-improving tools such as Power Automate, along with Power BI to provide visibility for all stakeholders.

We have a deep understanding of the unique challenges family offices face, and we designed our solution with family office wealth management in mind.

With Gravity Software to help your family office take care of the present, you can help the family you serve move boldly into the future.

Schedule a live demo to see how you can improve family office accounting and support succession planning with Gravity.

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