Objectives are changing, reporting requirements are changing, family members are requiring deeper financial insights, and yes the generation is changing. In a Bloomberg report, The Future of Family Offices in 20171, the number one objective of the family office, ranked by importance, was Inter-generational wealth management (number 2 was the Consolidation function of accounting, tax and estate planning services). A substantial amount of material has been published recently, addressing this inevitable shift to the next generation. The ramifications of this shift are both significant and carry consequences for today’s Family Office CFO. One of those ramifications, the focus of this article, is reporting, as it relates to the Single Family Office Generation Shift.
Let’s start with the next generation itself…what are their likes, their demands, their expectations? In terms of family office reporting, the answers are relatively clear. The up and coming generation, that will be overseeing this world of ultra high net worth families, has clear and definable likes, demands and expectations. They like their information digitally, they demand it be accurate and they expect it on a moment’s notice. The accounting and reporting systems currently in place at a great many family offices simply cannot support these requirements. Consequently, the demands by the next generation will force a sea change in how family offices will operate. Long held methodologies, habits and even the classic “because we have always done it this way” mindset require close scrutiny and more likely than not, a transformation. Let’s dive a little deeper.
The single family office generation shift is in play today. Family offices who do not adapt to these real world conditions will fall behind in their ability to properly serve the family. This shift in the landscape cannot be ignored and clearly, the time to implement change is now. So, what does that mean to the CFO’s driving performance within the family office ecosystem? Simply put, it means they must be data driven (and technologically savvy).
There are 3 new approaches to attaining deeper financial analytical insight.
Close faster to enable real-time reporting in the family office
Aggregate data from disparate sources to improve analysis
Implement dashboard reporting to monitor the financial pulse of the family office
By becoming data driven and embracing the demands, which are here today for some and on the horizon for others, a transformation will occur. And the new demands created by the single family office generation shift will be met or exceeded. And what, in a family office, is more important than meeting, or even exceeding, the family’s needs? Nothing.
Our whitepaper examines each of the above three points in greater detail. To read more about driving performance in the Family Office, click here to download it for free.