Taking into account the specialized knowledge and assistance required to manage one’s money intelligently, high-net worth individuals have taken to engaging the services of family offices.
Whether one has inherited wealth or created it, the discerning investor ultimately wishes protect and nurture it in order to benefit his family over the long term. This is easier said than done, however, considering that a single bad investment or clan dispute can be all it takes to tank a fortune that took years – perhaps even generations – to build.
Rising demand
Family offices – which could be part of a traditional bank or a more boutique outfit – are wealth management firms that tend to the financial needs and goals of an affluent individual or family. Their benefits are as elite as the clientele: in additional to the traditional investment advising, estate planning, tax accounting, and consulting on various financial moves, they also offer white-glove perks such as the handling of art and other collections, tracing medical and genealogical history to help the clients better understand their heritage, and teaching the younger generations the value of money and how to use it well in the future.
While family offices have been around since the 19th century, demand for them has increased over the years, especially for their financial planning and asset coordination functions, culminating in the 2008 financial crisis. With this background, managers in these offices work to help a family navigate the current economic landscape so that they can achieve their financial objectives.
Optimizing operations
Given the array of services to be delivered and the bespoke needs of its clients, managers overseeing a particular family’s portfolio need to remain abreast of the latest wealth management trends and optimize their operations so as to remain efficient at their core task: growing their wealth.
Asset servicing companies can help free up managers to focus on strategy and decision-making on behalf of their clients by providing them with fund administration support.
Their middle and back office solutions include daily cash, position, and trade reconciliation across all counterparties, portfolio level analytics including performance attribution and risk metrics as well as comprehensive financial reporting, accounting, compliance, and tax services. Cloud-based reporting platforms also allow managers to access their data from any browser, aiding them in their analysis.
With the help of asset servicing companies that streamline back end operations, managers in family offices can focus on what they do best – providing a family with the best financial advice for its future.
