family office data
A Simple guide to: family office data management
Updated on May 12, 2023

Illustration: Lourenço Provencia

Table of Contents

Most companies can agree that data analysis should be a priority, and for family offices, technology has become incredibly important, particularly for those who acknowledge the role it can play in helping them evolve and keep up with a dynamic business landscape. Family offices recognise better than most that with the rise and fall of various industries, so too does wealth creation – and wealth loss. The by-product of this fluctuation is increased risk and volatility, which is where understanding data and its relevant management comes in. Here, we investigate the types of data that are most helpful for family offices and examine how technology can, and should, act as a tool to collect and analyse data successfully.

Data is a valuable asset to the modern world of business

Sherlock Holmes once said: “It is a capital mistake to theorise before one has data”. Most companies recognise this simple truth and place a high priority on data analysis to support accurate decision-making and informed risk management. In the family office context, the importance of data has grown exponentially over the last few years- in line with a business landscape that is evolving at an ever-increasing pace. As new industries rise and established industries falter, significant wealth is being created and lost in a shorter space of time than ever before. The impact of this is higher volatility and risk. Furthermore, the growing demand for transparency and sustainable business practices places further pressure on family offices to reshape their investment and reporting approach.

The reality is that old ways of working are no longer appropriate in this new world of business which is why family offices are turning their attention towards data, exploring more sophisticated methods of leveraging it to support improved accuracy, efficiency and agility.

Technology and data go hand in hand

Although most family offices recognise the value of data, the complexity associated with tracking significant wealth across diversified portfolios, multiple legal entities and geographies make it difficult for them to access, integrate and organise data in an efficient and timely manner. This is why many firms are now embracing fam-tech to assist with the data challenge, investing in platforms that can gather, display and interpret real-time data.

The truth is, however, that even the more advanced family offices are only scratching the surface of what data can potentially deliver to their firm and clients.

In this guide, we explore various types of data that family offices can access and utilise, including opportunities outside of the traditional investment and performance spaces. We also discuss the increasingly important role of technology as a tool to collect and analyse data and how it can be leveraged to its full potential.

Why data?

If you’re already embracing the move to family office technology, you’re on the right track to successful data management. Don’t be scared of the data, it’s here to help you and make business operations that much more efficient.

family office technology

Technology drives the data revolution

Immediate access to performance data has been the key driver behind a significant increase in fam-tech investment over the last few years. New technology allows family offices to replace spreadsheets and cumbersome manual processes with platforms that can gather and distil real-time data into customised performance dashboards. With live data so readily accessible, family offices can make swift, informed investment decisions and improve their management of risk. Additionally, reporting efficiency is significantly enhanced, not only in the performance space but also in other areas like impact reporting. When technology is leveraged effectively, repetitive data-capturing tasks can also be automated, freeing up time and resource towards crucial wealth management activities.

family office technology

The future of data

Being able to swiftly collect and organise data is just one component of what technology can deliver. Technological advancements like AI and machine learning can potentially revolutionise the way family offices work with data. AI and machine learning take business process automation to the next level by employing algorithms to instruct tasks and enabling that algorithm to continually learn and improve. Combined, these technologies can analyze enormous amounts of data in a very short space of time, predicting trends, identifying investment opportunities, highlighting risks and making recommendations. As an example, the due diligence process for a new investment can be cut down from months to hours, which is a massive benefit to family offices.

family office technology

Data is your friend

Data has always been at the heart of every good business decision and therefore has become a very valuable and essential commodity in the fast-evolving world of business. New risks and opportunities emerge quickly and modern family offices are confronted with the challenge of having to make faster and more accurate decisions whilst having to keep a much closer eye on current investments. Furthermore, the demand for greater transparency and responsible investment adds to the growing data requirements of family offices. New technology is being used effectively by many family offices as a tool to reduce the complexity and time associated with gathering and interpreting data. When used to its full potential, technology can answer questions that family offices didn’t even think of asking.

Five core types of data used by family offices

Further Reading
How to start a family office
How to start a family office

As wealthy families tackle the complex challenges of generational wealth preservation and succession planning, the family office concept has grown in popularity. However, setting up a family office is a time consuming and potentially costly exercise which needs to be carefully planned and executed.

A Simple guide to single family office structure
A Simple guide to single family office structure

The emergence of new wealth and an increasingly complex business environment have driven the recent growth of single family offices. Although costly, the single family office concept is a sophisticated and effective vehicle through which to professionalise the management of family wealth and protect it for generations to come, whilst also aligning all activities to a long-term purpose.

Understanding business continuity plans for family offices
Understanding business continuity plans for family offices

Ensuring the safety and continuity of your family office's operations during uncertain times is of utmost importance. Our latest guide highlights the importance of a comprehensive business continuity plan, detailing significant elements to ensure you safeguard your wealth and protect your legacy.

A Simple guide to asset allocation for family offices
A Simple guide to asset allocation for family offices

Asset allocation is crucial for family offices to manage their investments effectively and balance risk and reward. Our comprehensive guide on asset allocation for family offices covers key factors to consider, common strategies, and best practices.

Simple solutions for complex times.