Don’t let your clients get caught naked when the tide runs out.
As the legendry chairman and CEO of Berkshire Hathaway, Warren Buffet once said, “Only when the tide goes out, do you discover who’s been swimming naked.”
What he meant is that rising tides float all boats and that even bad investments can rise in a good market. It is only when the market turns volatile, one starts getting exposed to the risks of fundamentally bad investments (if not in return performance, then in hidden and unfavorable liquidity clauses, exit fees, correlated performance, and much more). Wealth management is a tricky business. It gets trickier for family offices where clients though completely entrust their wealth to their trusted advisors yet they do not want to be caught unaware.
Multi-single family offices are a new emerging class of family offices, a hybrid version of multi-family offices and single-family offices. Like MFO’s, these are boutique investment advisory services firms that provide conflict-free integrated advice based on a deep understanding of each family’s entire balance sheet, tailored to their needs. However, these firms operate as a cluster of single-family offices and with dedicated teams and operations that preserve the privacy and exclusivity of traditional SFOs.
After serving 300+ global family offices of all shapes and sizes, and interacting with countless accountants, investment professionals, and family offices principals across the world: here are the top 5 lessons that Asset Vantage vouches for
1. THE TITANIC MISTAKE
Relying only on the performance reporting of liquid investments (the highly visible tip of the iceberg) instead of the entire net-worth (the entire iceberg) can have fatal consequences. Your client’s true financial health and circumstance are revealed only while doing the heavy lifting of the accounting of the family’s entire balance sheet across family entities, assets and liabilities, and cash hows. An inadequate and back-dated view of your client’s total finances can pose risks to the sailing ship, eventually sinking it.
Asset Vantage is a powerful private cloud-based technology platform that allows all variants of family offices to bring together the complexities of liquid and illiquid portfolio reporting and general ledger accounting to provide a single view of a family’s entire net worth
2. DEPENDENCY ON MANUAL WORK
Keeping a separate general ledger accounting platform and a separate investment performance reporting platform is a hassle and wastes valuable time combining the data. This practice also puts you at risk of gathering inconsistent or lost meta investment data – the key information required to create an integrated picture of family wealth and decision-making. After all, investment performance must be based on real cash hows and deserves to be in a single platform.
Asset Vantage allows family offices to significantly reduce the manual work of integrating the complete balance sheet from multiple systems. Family offices, leverage AV’s tech and a complementary suite of services including on-boarding and ongoing data reconciliation.
3. DECISION DELAYED IS OPPORTUNITY DENIED
In an industry where time is money, slow decision-making can make you lose out on lucrative opportunities. Generating a consolidated monthly report requires many unnecessary days (and sometimes weeks) of the manual report and that too after you get all the statements from various investment sources.
A multitude of reports and analytics can be extracted from Asset Vantage in minutes. The faster you get access to your client’s financial information, the sooner you can make good investment decisions.
4. NOT RUNNING WEALTH LIKE YOU WOULD YOUR BUSINESS
Many families do not run their wealth like they ran their businesses that helped create wealth. With the right tools, family offices can help drive that discipline and rigor for families to efficiently control every department of a complex wealth management operation. It is important to deploy best practices and standard operating procedures that create process uniformity, promote financial discipline and help family offices to scale.
Asset Vantage leverages digital technologies and cloud computing to implement a suite of standard operating procedures to offer full financial visibility and control in a personalized and secured manner.
5. AN OUTDATED LEGACY
Maintaining an outdated legacy tool or set of tools results in a consistent increase in your costs and more importantly, increases the risk of losing your client data forever in the gut of an unsupported dinosaur. The right software platform, on the other hand, gives you a tremendous competitive advantage. An efficient tool not only allows your firm to focus on delivering your trusted advice to each of your family office customers but also allows you to scale your effectiveness across multiple families with ease.
Wondering, how to identify the right platform? It must be a fully managed and secure cloud-based platform that offers integrated reporting. The user should have access to global transaction and investment pricing feeds. The right platform is the one that is created to solve customer pain areas and therefore, should continuously enhance itself through customer feedback.
Asset Vantage is modern, cost-efficient, and effective offering all the features that a right platform must-have. It allows you to always own all your data and can easily integrate with other family office systems thereby offering seamless data migration. AV does all the heavy lifting so that our customers can focus on running their family office.