Institutionalisation of Family Offices: is it worth it?

Date: 26 Feb 2015


Institutionalisation within the investment management space has been a key trend in recent years. And, according to Deloitte’s2015 Private Wealth Outlook* family offices are no exception.

Technology has a critical role to play in this institutionalisation. But as Deloitte’s report points out, adopting technology presents both challenges and opportunities.

From my conversations with industry participants I know that expense is frequently a concern. There is the upfront investment, the need for IT experts to run and maintain the platforms, the fear those investments will all-too-soon be made obsolete by the next generation of technology developments. The worries about the disruption and complications that may result from overhauling legacy systems (which in many cases are simply Excel spreadsheets) and long-standing ways of working.

Balanced against these concerns are the significant benefits that innovative solutions can offer: more streamlined and cost efficient operational processes, greater scalability, enhanced data access, improved financial and reputational risk management, faster and more sophisticated reporting. In short, a framework better able to safeguard the family’s wealth.

Ultimately, the question comes down to ‘will the ROI be worth it?’

The good news is there’s an ever more appealing answer to this dilemma: cloud-based solutions.

Because the systems are hosted and maintained remotely by the service provider, you don’t have the upfront implementation investment or ongoing IT staffing costs. You can be up and running much quicker and with less migration fuss than with an in-house installation. And, crucially, you don’t have to worry about the technology rapidly becoming outmoded, since you always have access to the latest software versions as they’re rolled out.

Flexibility, scalability and sophisticated capabilities all available at the click of a mouse. No wonder Deloitte expects to see family offices increasingly consider cloud applications over the coming year.

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