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Tracking wealth for family offices has become complicated with an increase in the number of asset types and the geographies it is spread across. Therefore, to keep a tab on your performance, it’s extremely important to focus on three key areas: the assets you have full knowledge about (known knowns), the uncertainties you haven’t fully explored (known unknowns), and the risks you can’t even predict (unknown unknowns). Having a clear view of all your assets, liabilities, and cash flow is super important for making smart decisions. This is where a family office software plays an important role. It tracks wealth across multiple assets and creates actionable reports that provide a detailed drill-down of portfolio performance, allowing family offices to get a simplified view of their complex wealth.
Challenges Family Offices face and how Asset Vantage solves them across Known Knowns, Known Unknowns, and Unknown Unknowns
1. Complexity of Illiquid Assets
The Challenge:
Known Known: Families have complete knowledge about the illiquid assets that make up their portfolio, such as private equity, real estate, and art.
Known Unknown: What’s tricky is figuring out how to properly track and value these illiquid assets, understand how they impact liquidity, and what their long-term financial impact will be.
Unknown Unknown: Unexpected situations can pop up, like urgent capital calls or sudden cash needs. These can create a big problem if your illiquid assets can’t be quickly converted into cash.
How Asset Vantage enables family offices to solve the complexity of illiquid assets:
Asset Vantage family office software helps simplify this by pulling together both liquid and illiquid assets into one easy-to-use platform. It helps generate performance reports, tracks valuations for illiquid assets, and allows family offices to attach important documents for valuation, tax, and insurance purposes. This helps them to get a much clearer view of where they stand financially, making those tricky known unknowns easier to handle. By pulling all the assets into one general ledger, the platform makes it simpler to forecast liquidity and plan ahead, so that family offices are less likely to be surprised by sudden liquidity needs.
2. Tracking Wealth from Multiple Sources
The Challenge:
Known Known: Families know that their wealth is distributed across different types of assets, such as bank accounts, stocks, real estate, and private investments.
Known Unknown: It’s often unclear how to combine and consolidate data from these multiple sources into a unified view of total wealth, which increases the risk of missing crucial information.
Unknown Unknown: Without an integrated view of all assets, unexpected financial obligations or missed opportunities for optimizing investments may arise.
How Asset Vantage enables family offices to track wealth from multiple sources:
Asset Vantage family office software simplifies things by bringing all financial data, including bank data feeds, checking account and credit card account, vendor payments, equity, alternative assets, and many more—into one central platform. This way, families don’t have to guess how each type of asset affects their overall wealth. The easy-to-use dashboard gives families a clear, interactive view of their net worth, ensuring nothing gets missed. This way, families can feel more in control, avoid any surprises, and spot new ways to strengthen their financial plans.
Check out the case study below to see how AV helped a Houston-based family office get a complete view of their net worth. With features tailored to their needs, like bank reconciliation and custom report books, they gained a clear and organized picture of their wealth at one place.
Read More: How AV enables MFOs drive business growth and cost efficiencies
3. Lack of Transparency in Investment Performance
The Challenge:
Known Known: Families understand the need to keep an eye on how their investments—from stocks to real estate and private equity—are performing.
Known Unknown: However, it can be challenging to track the performance of each investment, especially with complex setups like partnerships or holdings spread across different countries.
Unknown Unknown: Without clear performance data, there’s a risk of missing underperforming investments or hidden risks that could affect overall wealth management strategies.
How Asset Vantage enables family offices to ensure transparency in investment performance:
Asset Vantage family office software provides comprehensive performance reporting integrated with its accounting system. This makes it easier to track how individual investments perform across all asset classes. The platform offers a look-through reporting feature for partnerships and multi-entity structures, which increases transparency in performance tracking. By giving families the data they need to make informed decisions, Asset Vantage helps family offices for family wealth tracking and helps to uncover any underperforming investments, turning known unknowns into actionable insights while mitigating unknown unknowns like hidden risks or depreciating assets.
4. Ensuring Data Security and Privacy
The Challenge:
Known Known: Families know how crucial it is to keep sensitive financial data safe, especially when multiple people—like accountants, advisors, and wealth custodians—need access to it.
Known Unknown: Families might not be aware of the vulnerabilities in their data management practices or the specific risks of someone gaining unauthorized access.
Unknown Unknown: A breach in data or unauthorized access to sensitive financial data could unexpectedly lead to major financial losses or damage their reputation without any warning.
How Asset Vantage enables family offices to ensure data security and privacy:
The Asset Vantage family office software addresses security concerns by protecting financial data of families. With customizable user permissions, families can decide exactly who has access to sensitive information, so only trusted people can view or make changes. Data is encrypted, and the platform keeps an audit trail that shows who accessed what and when, adding an extra layer of transparency and security. By safeguarding financial data, Asset Vantage helps families in family wealth tracking and reduces the risk of unexpected issues like data breaches or privacy violations.
Bringing together wealth data distributed across various asset classes requires a strategic approach to handle known knowns, anticipate known unknowns, and become ready for unknown unknowns. The Asset Vantage family office software consists of numerous features that will help in family wealth tracking and will enable families to simplify illiquid assets, track wealth across multiple sources, provide a transparent view of your investment performance, and ensure a high-level of data privacy.
If you want to learn more about our product, you can schedule a one-to-one session by clicking the below link. One of our sales representatives will get in touch with you shortly to give you a complete walkthrough of our family asset management software.
