The Single Family Office Generation Shift

  • By zoltan-szakal
  • November 29, 2017


Family Offices are changing.

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 Impact On Reporting

  1. Information delivered digitally – this simply means that information will have to be securely transmitted and delivered to any device, anywhere, anytime.
  2. Accuracy – in the world of accounting information, accuracy is assumed.  However, given the overuse of Excel that exists in most family offices today, what often suffers is accuracy.  Exporting data, re-keying information, connecting spreadsheets etc., are all factors which contribute to the risk that accuracy may be sacrificed. Unintentional human error does occur. In today’s demanding and fast paced world, time constraints exist.  As a result, at times, this may not allow for the final product to be checked and double checked before presentation to the family.
  3. Information at a moments notice – This implies that information in the system must be current and up to date, so that it can be supplied, on demand with real time data.  In the case of Family Offices, this could mean anything from a top level consolidated report dealing with numerous entities, the current status of a family home renovation project or as simple as, what the fuel costs were on a specific vehicle over some period of time.
    Single Family Office Generation Shift

The Single Family Office Generation Shift Is Happening Now

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.

Wealth Management