When Should Your Family Office Invest in Technology?

How to Make the Case for Buying Family Office Software at Any Stage

Long regarded as being overly complex and costly, family office software is more affordable and accessible than ever. Yet, reservations around technology implementations still plague most family offices.

Over the course of hundreds of conferences, meetings and dinners, we have frequently heard family office professionals express a thematic concern when it comes to implementing a new wealthtech solution: timing.

What if we don’t have enough resources right now to handle the implementation project?

How many hours per week should I plan to set aside for implementation-related tasks?

How will I carve out time to collect the data for the new system while continuing to perform my day job in the old system?

How long will my implementation take?

But perhaps the most salient question around timing goes something like this: When is it the right time to implement wealth management technology in my family office?

Like many things, the answer isn’t nearly as straightforward as the question. And while there’s no magic timeframe during which implementing a technology solution is better or worse, there are benefits to purchasing a technology solution at various stages of your family office’s growth.

Here are a few strategic considerations to help you make the right decision for your firm, your staff and the family members you serve.

New Family Office

Whether the family recently experienced a liquidity event or a late generation beneficiary decided to branch off to form their own shop, the early days of a family office can present a great opportunity to invest in technology for the future.

[Check out our blog on Building a Family Office WealthTech Stack for tips and a downloadable wealthtech evaluation checklist]

Technology selections are almost always daunting, especially when you have a fresh set of entities, a new chart of accounts and an evolving investment strategy to manage. But a worthy technology partner will be able to offer your firm a right-sized offering to start that can seamlessly grow into your long-term, multi-generational solution as your strategy develops.

By implementing a technology solution that will carry you through the years and, more importantly, the generations, your financial data will already be in place as you add entities and family members to the mix. More importantly, your flagship staff will have experience using the software to manage accounting, investment and reporting processes so that they can propagate their knowledge of the technology to newly hired staff.

Family Office with Limited Staffing

Very few family offices have the luxury of a large headcount. In our experience, it’s not uncommon for family offices to operate with one, three or five core staff members, especially as the family office just getting started. With limited resources, it can be hard to justify a technology implementation that will consume even more of your team’s valuable time.

But a small staff shouldn’t deter you from investing in state-of-the-art financial technology.

In fact, it’s perfectly reasonable to own the technology while leveraging the vendor’s supplemental outsourced services to help operate the platform, or a subset of its tools. In these scenarios, you are the owner of both the technology and the relationship inside of one solution, which lets your team focus on strategic activities while enjoying the benefits of cutting-edge software for management and client reporting.

As your headcount grows, you can begin to absorb those outsourced functions into your daily operations. Since your data is already residing on your chosen wealthtech solution, you’ll be able to avoid the process of migrating historical data from the vendor’s application of choice into your preferred solution.

Established Family Office with Rudimentary Systems

You’ve used spreadsheets and QuickBooks files for as long as you can remember. Your data has become a mess and you wouldn’t know where to begin. You can’t imagine trying to source and implement a new family office accounting and investment software.

These are all very real, and very valid, concerns—and they are why so many family offices continue to use outdated technology. But relying on outdated, clunky or non-specialized systems within a family office breaks down efficiency and introduces a greater margin of error.

A modern technology solution presents a blank slate for you to clean up and organize your data so that you can improve the efficiency and speed of your processes and the quality of your reporting. So regardless of where you’re at on the technology spectrum, it’s important to recognize the value of investing in technology that can automate and simplify how you do your work today, for a better, exceedingly less painful, tomorrow.

Established Family Office with Existing Technology

Sometimes your technology doesn’t grow with you—or stops growing altogether—and you’re put in the position of having to find a technology partner that understands the importance of innovation and forward motion.

[Read our mini ebook Our Perspective: A Relentless Development Philosophy to learn more about our product development strategy, and how this models the future of innovation for the Archway Platform^SM.]

In other cases, sometimes things just don’t go to plan. Perhaps a less proven tech firm over-promised and under-delivered, or you got lost in the data and mismanaged deadlines. Whatever the reason, it’s important to remember that it’s never too late to start over with a better suited technology partner.

Although outgrowing or failing to get off the ground with a technology solution can be costly and frustrating, noting how it fell short, where things went wrong and how to avoid making the same mistakes again puts you in a better position for a successful technology implementation moving forward.

By building on your prior experience, you have a better grasp on what works for your organization and what hinders it. Using this knowledge, you can select a solution that provides the right combination of people, process and technology for your family office.

At SEI Family Office Services, we know that each family office faces its own challenges when it comes to selecting and implementing a technology solution. As a long-term strategic partner to family offices and high-net-worth advisory firms of all shapes, sizes and strategies, we’re prepared to understand where you’re at today, where you want to be in the future and how the Archway Platform℠ can help you get there.

Schedule a call with a member of our team to learn more about our technology and outsourced service solutions for family offices and financial institutions serving wealthy families.