With at least 10,000 single-family offices in the world, half of which were formed in the last 15 years, family offices may feel like they struggle to keep with the pack. To keep pace with the increasingly complex and ever-changing tax, regulatory and accounting requirements, family offices must modernize their technology and operations.
There are several challenges that family offices need to consider when choosing their operational framework:
Accounting And Reporting
Family offices are often managing assets that range from traditional equity to global markets to private equity to real estate holdings and fine art. While managing such a wide array of assets, managers must also maintain enough liquidity to meet demands from family members for big-ticket purchases.
Security
Roughly 15% (or more) of family offices have experienced a data breach. It’s already difficult to keep up with new technologies like cloud storage and transactions over the internet, and even more difficult to protect against threats while using those new technologies.
Generational Differences
One of the biggest generational differences is how people of different ages prefer to receive information. Older generations generally prefer paper copies of periodic reports, whereas younger generations have grown accustomed to having real-time information and interactive capabilities on demand.
Keeping Technology Current
As technology advances faster and faster, many family offices have begun to question whether it’s worth it to maintain their own infrastructure—especially when third-party solutions are so easily available.
Staffing Resources
Family offices often experience pressure to keep their headcount low. In deciding which roles are most crucial to the operation, managers much weigh whether a role must is better off being filled in-house, or if they should instead be outsourced to a multi-family office or professional partner.
For more information about family office staffing, visit our website or contact us today!
