New technology gives wealthy families visibility and control of their investments in personalized, secure ways.

Complexity that stems from holdings in multiple asset classes, entities, advisors and currencies is found across all groups. While each is unique, there are common problems that beset wealthy families. As globalization has opened new markets and alternative investment classes, many families have diversified and reduced their historic reliance upon equities. Investment portfolios are no longer straightforward.With diversification comes a new set of hurdles. Taxes, for instance. Or, when a portfolio holds a number of different currencies and investments spread between multiple custodians. A larger portion of their assets may be increasingly direct, or non-traded, when compared to past practice. Lumpy cash flows and risks add further difficulty.

“Family principals need to cut through the complexity, if they are to make informed, insight-driven decisions”

Day-to-day activities are also complicated, thanks in part to the number of legal entities used to hold assets. Money can move quickly through family entities, in the form of loans, for example. A family needs accounting capability, that can keep accurate records, and deal with burdensome compliance regulations and taxes. They also have a slew of documents associated with their investments. Often, funds are earmarked for charity purposes, too.

The investments and all this information must be tracked accurately and in a
timely manner. Complexity is not a bad thing. It’s healthy that families have diversified it’s holdings and moved beyond a core portfolio of stocks and bonds to sustain their wealth. As a reality of modern life, it’s something that simply needs to be managed effectively.
Control is essential to the survival and success of a family’s wealth. This includes control of cash flows, control of access, control of information and of risks. A wealthy family needs a handle on each of these important aspects of its holdings.

Control comes when the full picture is available. A family office will want an overview of all its liquid and illiquid investments. These are never concentrated in one asset class geography, nor are they owned by one entity. The ability to manage and access all investment-relevant information across the board is crucial. Family principals expect their engagement with their wealth to be seamless and efficient and want the immediacy they experience across so many other areas of life to be replicated in their financial lives.

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