The Evolution of Family Office Reporting

The Past to Present of Aggregating, Creating, and Analyzing Family Office Financial Reports

Once relegated to the world of spreadsheets, PowerPoint presentations, printed commentaries and plastic coil bindings, family office reporting has taken an entirely new shape in the 21^st century.

Over the past two decades, firms like SEI have made tremendous advancements in the areas of data aggregation, analysis and visualization, enabling family offices and the families they support to access more consumable, interactive and sophisticated wealth insights.

And while family office reporting has made substantial strides to date, SEI Family Office Services believes reporting will continue to evolve and expand as new technologies and innovations emerge.

Here’s a look at family office reporting: past, present and future.

Family Office Reporting: Past

Prior to the introduction of dedicated family office software, family office accountants and investment professionals were tasked with cobbling together fragmented, multi-source data. Beyond the multiple general ledgers, brokerage and bank account statements and staff-maintained spreadsheets that needed combing through, family office staff had to manually consolidate entities and accounts, which were routinely tracked independent of one another. This challenging, time-consuming data collection process often took days, weeks or more to complete.

Moreover, any family member-specific customizations were documented in network files, notebooks or the institutional knowledge of tenured staff members, making the reporting process difficult to replicate period over period.

While some family offices set out to create their own databases and enlisted enterprise business intelligence tools to build reports, Excel was often the reporting tool of choice. If a workbook was a single report such as a balance sheet, each worksheet (or tab) was a single entity or individual. Data would be parsed together, tab by tab, to create a patchwork financial picture.

Once the data was amassed, normalized and reconciled—typically by hand—family offices were able to go about the business of formatting worksheets and inserting generic charts and graphs. Staff could then save images of formatted data or copy over tables into PowerPoint presentations or Word documents, which would ultimately become the collated client report pack.

For years, the level of effort was high and the quality of reporting was low.

Family Office Reporting: Present

Fast forward to today. While some family offices still rely on industry-agnostic tools like spreadsheets and non-specialized accounting systems, others have migrated to one of the many reporting tools designed specifically for family offices.

Integrated solutions enable family offices to comingle their accounting and investment data, allowing them to report across various facets of wealth. Ranging from asset allocation and investment performance to realized gains/losses, cash flows and investor-level holdings, family offices can tailor reports with eye-catching graphics and consolidated data views quicker than ever before.

Reporting tools today feature report libraries, plentiful data options, custom filters and automated report creation and distribution mechanisms.

Additionally, advancements in secure file sharing have introduced new ways of distributing traditional report packs through client portals, FTP sites and other collaboration-style software.

But beyond the progress of traditional, paper-inspired reporting, family offices can now choose from a variety of complementary digital reporting tools. Client portals specifically have become increasingly popular amongst family offices as new generations have demanded enhanced ways to access their wealth information online.

Tools often feature interactive dashboards, configurable widgets and private messaging capabilities. Family offices can create an on-demand reporting experience that family members can consume anywhere, anytime, on any device—in a manner that uniquely appeals to their preferences.

Family Office Reporting: Future

Although family office reporting has seen enhancements far and wide, providers in this space will continue to push the bounds of reporting technology. As machine learning and automation create opportunities to extract a growing number of data points, family office reporting software will continue to become more intertwined with business intelligence, data visualization and advanced analytics tools.

Whether using sophisticated reporting packages, online dashboards or digital reporting apps, family offices are harnessing the power of reporting technology—taking lessons learned and best practices from the past and applying them to the future of family office reporting.

Originally authored by SEI for publication on Family Office Exchange: https://www.familyoffice.com/insights/evolution-family-office-reporting.