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Warren Buffett, the iconic chairman and CEO of Berkshire Hathaway, once said, “Only when the tide goes out, do you discover who’s been swimming naked.” Essentially, what he meant is that strong markets can make even poor investments look good. But, let’s face it, when the market turns volatile, the true risks of these investments come to light, revealing hidden pitfalls like poor liquidity, exit fees, correlated assets, and more. Managing wealth is complex, and it’s especially challenging for family offices. Clients trust their advisors with their wealth, but they also want to be kept aware and prepared.
The rise of multi-single family offices
A new breed of family offices is emerging, known as multi-single family offices. Think of these as a hybrid. They bring together the structure of multi-family offices (MFOs) with the deeply personal service of single-family offices (SFOs). Like MFOs, they offer bespoke, conflict-free advice based on a deep understanding of each family’s full financial picture. However, multi-single family offices work with small, dedicated teams, preserving the privacy and exclusivity that traditional SFOs are known for.
After working with over 300 family offices around the world and learning from accountants, investment professionals, and family principals everywhere, Asset Vantage has gathered some key insights for managing family wealth effectively. The five points mentioned below highlight these learnings in a compressed manner, which we believe every family office should know about:
1. Avoid the “Titanic” mistake
Imagine navigating a ship in open waters but relying only on what’s visible above the waterline. That’s essentially what happens when family offices focus solely on the performance of liquid investments—the “tip of the iceberg”—while neglecting the bigger financial picture. A family’s true financial health depends on tracking the entire net worth, which includes all family entities, assets, liabilities, and cash flows. Without a comprehensive and up-to-date view of a family’s total financial picture, there’s a real risk of steering clients into dangerous financial waters.
Asset Vantage provides a powerful private cloud-based platform that pulls together both liquid and illiquid portfolio data, combined with general ledger accounting. Equipped with these extremely potent features, advisors can gain a full picture of a family’s wealth, allowing them to make smarter financial decisions.
Learn how Asset Vantage Family Office Software helped a Houston-based MFO to get a complete picture of their complex wealth.
2.Cut down on manual work
Using separate systems for general ledger accounting and investment reporting creates extra work for the team. Not only does this waste valuable time, but it also makes it harder to maintain a cohesive and accurate picture of family wealth. Manual data entry across multiple platforms also increases the chance of inconsistent or missing information—the very details needed to make informed decisions.
Asset Vantage significantly reduces manual work by consolidating the entire balance sheet into one streamlined platform. With AV’s integrated tech, plus onboarding and data reconciliation services, family offices can save time and reduce errors, letting teams focus on what truly matters: serving the family’s needs.
3.Delays can mean missed opportunities
Good timing plays the most important role in wealth management. When decisions are delayed, valuable investment opportunities can slip away. Yet, for many family offices, putting together a complete report often takes days or even weeks, mainly due to manual work and waiting for statements from multiple sources.
Asset Vantage makes this process faster by letting family offices create different types of reports and see financial insights in minutes. With quick access to clear information, advisors can make smart and timely investment choices, helping them take advantage of opportunities as and when they show up.
Click here to learn how an asset tracking software can take care of all your investment accounting and reporting requirements.
4.Manage wealth like a business
Many families don’t approach managing their wealth with the same rigor and discipline that helped them build it in the first place. The right tools can make all the difference here. Family offices can use these tools to instil the kind of discipline and establish effective practices that make wealth management smooth. It’s about ensuring families have true control over each part of their financial journey, setting up a system that’s not only structured and scalable but also efficient.
Asset Vantage takes full advantage of digital technology and the power of cloud computing to offer a suite of standard operating procedures. These procedures bring uniformity and discipline to the process, ensuring consistency at every step. With AV- an asset tracking software, family offices gain total financial visibility and control, all within a secure, personalized environment that’s tailored to meet their unique needs.
Learn how the Asset Vantage platform can enable you to build a virtual family ecosystem at a fraction of a cost.
5.Outdated tools bring bigger risks
It’s easy to keep using old systems, but relying on outdated tools can drive up costs and add serious risks. If these older systems fail, valuable client data could be lost. An asset tracking software, however, gives family offices a real advantage. It helps them aggregate data from multiple sources at a lightning-fast speed, create actionable and configurable performance reports, and keep client data confidential and secure.
Asset Vantage provides a secure, modern cloud-based platform with built-in reporting and access to global data feeds. It’s designed to meet the specific needs of family offices and is always improving based on client feedback to stay up-to-date. Families gain full control over their data, enjoy seamless integration with other systems, experience smooth data transfers, and benefit from a reduced workload.
Conclusion
By following these principles and using the Asset Vantage platform, family offices can take a proactive approach to track wealth. They’ll be ready to handle market changes confidently, protect clients from unexpected risks, and safeguard wealth for future generations.
