Depending on the business model, its primary focus and outputs, SFOs will have different technology requirements.  Successful SFOs view technology selection as part of a larger business strategy that follows an interdisciplinary planning approach.

A Case Study
The following is an example from a recent Family Office Metrics client engagement.  This SFO serves a multi-generational, multi-billion dollar family and employs the integrated planning approach described in Figure 1.  The SFO was facing the problems arising from the intersection of a complex entity structure and an even more complex asset allocation.  Although the primary pain point was reporting across asset classes and ownership structures, the SFO needed more than investment reporting software, it needed a way to communicate and collaborate across the various constituencies, including management, external advisors and family members. The SFO decided to plan and execute a complete re-engineering of business process and workflow in conjunction with needed systems and technology improvements.

The SFO vision statement identified achieving and maintaining a 'world class office' as a prime objective.  The project envisioned by the SFO set the following as goals:
Accurate and timely accounting  
Comprehensive and consolidated reporting
Easy and available, firm-wide communication and collaboration
The first step was to conduct a business process assessment that involved all levels of the organization, from the CEO and family members to the administrative staff, and that also crossed over all disciplines. Following the assessment, a strategic plan was constructed with the input and agreement of all stakeholders. A formal governance structure - a project management office - was created and used to manage project work, mitigate risk and provide regular reporting.  The project team, composed of SFO employees and Family Office Metrics consultants worked with multiple vendors and service providers, to implement the strategic plan. Using multiple best in class solutions, core accounting and reporting operations were modernized and automated.  With the help of different vendors, data management and document management were enhanced and made available in controlled environments to all stakeholders based upon need.  Building on the Microsoft server array, a web portal served as a personalized window on the portfolio, accounting and financial reporting, and document repositories. The relationship management and the work flow optimization tools created a framework for the SFO to modernize and control its activities much more effectively and efficiently.  The goals of the project were met and the SFO achieved a level of control and quality by pursuing a combination of best in class and open architecture solutions.   

What does this mean for providers selling to SFOs?   The case sends a clear message to providers who want to succeed in this market. The SFO is a sophisticated buyer looking for a best in class solution. Market conditions and technological developments have shifted the power to the buyer.  SFOs can leverage client relationships to get the services they want and need, and SFOs favor open architecture and collaboration across all channels.  Now, more than ever, providers need to be open to working with other providers to provide the best total solution for SFOs.  

A Prediction
In the 19th century, SFOs had an in-house army of clerks preparing and approving the accounting records and reports using quills and inkwells.  In the late 20th century, SFOs applied systems and technology to perform routine accounting and reporting and opened up to the opportunity presented by readily available market data.  In the 21st century, SFOs favor the independence and objectivity of the open architecture approach.  The implication of open architecture for providers is that of teamwork and collaboration.  Technology is changing the game for SFOs. Service providers who embrace open architecture will prosper.  

Jon Carroll is CEO and co-founding partner and Elvira Orza Hnatov is managing director and partner of Family Office Metrics in New York. Family Office Metrics is the leading provider of technology, operations and strategic consulting to the family office marketplace. We focus exclusively on the family office to provide business and technology solutions that help family offices better serve their clients. We also work with ultra high net worth clients who are considering starting or joining a family office. Our professional consultants leverage our combined business, operational, and technical expertise to develop solutions that address the unique challenges family offices face today-solutions that can carry your family office successfully into the future.

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Directory of Family Office and Wealth Advisory Technology Service Providers
BNY - Mellon Wealth Management
AccuTech Systems
Advent APX & Partner
Advent Axys & Partner
Advent Back Office
ADVISORport, Inc.
Archway ATWeb
Archway Operations Outsourcing
Archway Technology Partners
Beringer Group
CashEdge Wealth Management
Cool Life Systems Inc.
Data Agent iiMart
Datafaction Inc
Enterprise Iron
Financial Navigator
Financial Navigator Enterprise
Forward Accessor
Gravitas Technology
Infinity Info Systems
Informa Solutions
Innovest Systems
Interactive Data
JobStream 8
Morgan Street
Morgan Street Secure Vault
Northern Trust
Northern Trust WealthPassport
Odyssey Financial Technologies
Pershing Advisor Services
PerTrac Analytical Platform
PerTrac CMS
PerTrac Portfolio Manager
Private Client Resources, LLC
Private i (the Burgiss Group)
Relevant Equity Systems
Rockit Solutions
Schwab Family Office Services
Schwab Institutional Portfolio Center
ScottTrade Advisor Services
Shareholder Services
Silver Bridge Advisors
SS&C Total Return
SS&C Zoologic Learning Solutions
State Street Bank & Trust
SunGard Investran
TD AMERITRADE Institutional
The Hackett Group
The NextRound Solution
Thomson Reuters
Trust Imaging
Wealth Touch
Windward Group



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