Transformative Trends Shaping Family Offices in 2023
October 19, 2023
In 2023, the landscape of family offices is undergoing transformative shifts, shaped by evolving demands and technological advancements, as thoroughly analyzed in Simple’s Family Office Software and Technology in 2023 report. At the forefront of these changes, four major trends stand out: technology integration, professionalization, outsourcing services, and customization, all weaved together against the backdrop of globalization.
Technology Integration and Professionalization: Building a Resilient Framework
Technology integration is playing a pivotal role in enhancing the efficiency and effectiveness of family offices and their operations. The adoption of digital platforms for functions like portfolio management, data analysis, and reporting has increased significantly. Integrated cloud-based technologies offer significant value, bringing standardization and avoiding the excessive costs of proprietary, home-grown systems. Once implemented, the technology is centralized and optimized for various functions, ensuring that essential information is accessible securely and efficiently across various devices, including the rising demand for mobile applications.
Simultaneously, an enhanced emphasis on professionalization is evident in the report, characterized by a focus on transparency and governance. Family offices are evolving, adopting formal governance structures that enhance operational clarity, conducting thorough audits, and adhering to best practices. These sophisticated approaches also facilitate seamless succession planning, underpinning an organizational ecosystem marked by enhanced transparency and streamlined operations.
Outsourcing Services and Customization - Crafting Strategic Efficacy
Outsourcing has carved a significant niche in the operational strategy of family offices. Strategic technological deployment is empowering family offices by outsourcing specific functions such as accounting and back-office tasks to specialized third-party providers, facilitating access to external expertise and leaving more time for the family office to focus on their stakeholders.
Customization also was revealed as a priority, reflecting the nuanced and diverse needs of different families. Tailored services and technologies, ranging from investment strategies to comprehensive wealth management solutions, are being curated to meet individual needs, preferences, and expectations.
Embracing a World of Opportunities
The overarching theme of globalization weaves through each trend as family offices continue to expand, operate, and invest internationally. Accommodating a spectrum of international markets and emerging economies, the necessity for evolved software and operational strategies is paramount to ensure compliance with varied legal jurisdictions, currencies, and nuanced data requirements.
Navigating the complexities of the global landscape, family offices are faced with the task of mastering international markets, juggling multi-currencies, and grasping varied data storage standards. Eton Solutions delivers a solution to these complexities with its AtlasFive platform—a cloud-based, holistic solution meticulously crafted by a family office. Designed with a deep understanding of family office intricacies, AtlasFive seamlessly incorporates multi-currency functionalities, sophisticated operations, and robust cybersecurity. Embedded best practices and workflows within the platform naturally foster transparency and governance, paving the way for streamlined succession planning. Eton Solutions also provides bespoke outsourcing services, empowering family offices to center their efforts on core objectives while benefiting from Eton's back-office expertise.
Further enhancing Eton’s offerings is an intuitive mobile application, ensuring secure and convenient access to information, like net worth and bill-pay, regardless of location. While AtlasFive can be used out-of-the-box, it also accommodates intricate customizations, catering to the diverse needs of the largest single family offices in the US.
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Family Office Cybersecurity
Across multiple surveys of family office software users, cybersecurity is consistently the single most important and commonly identified item of concern. The potential breach of the family office IT system and the loss of confidential data keep many family office personnel up at night.
Direct Investing by Family Offices: The Barbell Challenge
The direct investing process for family offices is an ever-increasing “barbell” challenge. Initially there is the process of evaluation and due diligence around the proposed investment, and then once the investment is made the perils revolve around data and maintaining the investment “reality”: IRR, ownership, reporting, etc. Investment on one side and operations on the other — this can be a big-lift for a family office.
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