As family offices handle diverse assets scattered across different locations and asset classes, collecting data from various sources and consolidating it into a comprehensive view can be challenging.
Dealing with multiple data sources
Data collection is one of the initial difficulties that family offices encounter during data aggregation. Accurately assessing the family’s assets requires gathering data from multiple sources. Different institutions have different methods of collecting and keeping records of data. In some instances, they are bound by regulatory obligations regarding data sharing.
For instance, all private banks have their unique authorisation processing. In addition, alternative and private markets investments, such as private equity, hedge funds and real estate, adhere to different reporting standards. Therefore, family offices must go through the rigamarole to collect all the necessary data.
We rounded up a few companies that you might find interesting.
Overlay Capital
Overlay Capital invests at the intersection of private markets and sustainability, offering investment products that... Learn more
Copia Wealth Studios
Copia is a financial intelligence platform that puts you and your family at the helm of their wealth. Learn more
WealthArc
WealthArc is a digital wealth platform that helps wealth managers and family offices to drive workflow automation and... Learn more
SEB Bank
Owned & controlled by the Swedish Wallenberg family since 1856, the bank has an operational presence throughout the... Learn more
FundCount
FundCount is a unified accounting and investment analysis solution that improves operational efficiency and brings... Learn more
Impact Partners
Impact Partners is Europe’s first impact investing platform. It aligns its portfolio with the United Nations’ SDG... Learn more
Ensuring data security
Once they have accessed the sensitive financial information from different financial advisors, wealth managers and institutions, family offices must prioritise data security and privacy. With cybercrime posing a significant threat to family businesses, family offices face even more pressure to implement robust cybersecurity protocols to protect data from breaches and unauthorised access. In addition, they need to comply with data privacy regulations.
Enhancing data quality
Since the data is extracted from different systems, it comes in different formats that do not correspond with one another. Capturing and storing it accurately can be a daunting process if done manually. However, various software solutions on the market help automate data capturing and storage. Their goal is to eliminate the need for manual processes, which can lead to inaccuracy, mistakes, and delays. These software automation solutions ensure that transactions are entered correctly and consistently, which can improve the efficiency, accuracy and overall quality of the data.
Why consider data aggregators
Although accounting software helps to get clean data, they are usually limited to traditional asset classes. Most are ill-equipped to handle alternative investments. With an increasing number of family offices diversifying into private markets for wealth preservation, many could be unwittingly adding more manual processes to their workflow. This can harm data accuracy, resulting in poor analysis and untimely reporting.
That is where data aggregators can be useful. They offer several user advantages, including the convenience of managing multiple accounts on a single platform:
- AI and Machine Learning: Advanced data aggregation platforms incorporate artificial intelligence (AI) and machine learning (ML) to enhance data recognition, categorisation, and predictive analytics. This enables them to take investment data – including alternatives – from multiple sources, validate it and standardise it into a uniform format.
- Cloud Computing: Cloud-based data aggregation solutions offer scalability and flexibility, allowing family offices to access their data securely from anywhere while reducing the need for on-premises infrastructure.
- API Integration: Data aggregators use Application Programming Interfaces (API) to integrate with wealth advisors, financial institutions and other custodians. That allows them to give family offices real-time data retrieval and updates, reducing the reliance on manual data entry and improving data accuracy.
Key considerations:
When choosing a data aggregation system, family offices should consider several factors. First, scalability is important as assets and investments may grow over time. The system should be able to handle increasing volumes of data.
It’s worth noting that family offices with significant alternative investment portfolios should consider seeking out specialised service providers. This is because the complex nature of alternative assets requires expert providers who can offer the expertise and resources needed by family offices to manage these investments effectively.
When distinguishing a good alternative data provider from a bad one, it often boils down to the technology used for data extraction. A reliable provider typically uses proprietary technology that can extract data from multiple sources. This enables it to consistently deliver high-quality, accurate, and up-to-date data to its clients.
In contrast, subpar providers rely on generic PDF scrapers or OCR tools, resulting in limited or outdated data. Consequently, firms resort to manual labour and hiring additional staff to process and extract client documents.
Additionally, cost is a crucial consideration, as data aggregation solutions can vary widely in price. Regulatory compliance is also vital, as different jurisdictions have varying data aggregation and reporting regulations. Family offices need to ensure they comply with these regulations. And finally, effective reporting and analysis capabilities are essential.
Data aggregation solutions for family offices
As technology advances and cybersecurity becomes more important, offices are changing how they gather data. Family offices can gain valuable insights and simplify financial management by choosing the right data aggregation solutions. Here are some of the top data aggregation companies serving the family office market:
| Company | Arch | Canoe Intelligence | Flanks | Landytech |
|---|---|---|---|---|
| Overview | Arch leverages software and industry-leading insights to make private investment operations more secure, efficient, and standardised. | Canoe introduces purpose-built automation into the workflows of institutional investors, asset servicers, capital allocators and wealth managers. | Flanks is an aggregation tool that helps to optimise the user experience for both the investor and financial advisor. | Landytech created the Sesame platform to bring all asset information into one place and offer an intuitive user experience for both managers and owners. |
| Use cases | Tax automation Capital calls Distribution Investment updates | Alternative and private investment automation | Direct wealth aggregation | Data consolidation Performance and risk analysis Reporting |
| Type of assets | Bankable or financial assets & funds Lifestyle assets & rare collectibles Private equity & direct investments Real estate | Private equity & direct investments Bankable or financial assets & funds | Funds ETFs Variable income Fixed income CFDs Pension plans Cryptocurrencies | Bankable or financial assets & funds Foreign exchange Lifestyle assets & rare collectibles Private equity & direct investments Real Estate |
| Target clients | Single-family offices Individual wealth owners Multi-family offices Investment & Financial Advisors (RIAs/IFAs) Custodians Banks Accountants Fund of funds | Alternative investment managers Multi-family offices Single family offices Investment & financial advisors (RIAs/IFAs) Fund managers Banks | Multi-family offices Asset managers Financial advisors Banks | Multi-family offices Single family offices Fund managers |
| Cost structure | Pricing model based on line items, data points extracted, and documents collected. The total AUM/AUA supported is $5T and client base is around $250M. | Pricing model based on a number of factors including numbers of custodian feeds, portfolios, legal entities, and assets. |
Canoe Intelligence
Canoe Intelligence is an alternative investments technology company that offers cloud-based solutions that blend AI and machine learning for document collection, data extraction, and data management. The firm’s vision is to bring the transparency available in public markets to private markets. Key products include Canoe Connect, Canoe Intelligence, Canoe Tax, Canoe Asset Data, and Canoe Pro. The company also offers an open API for clients and partners who want to build custom integrations.
Canoe was developed in 2013 for Portage Partners, a private investment firm that originated as a family office. Canoe’s technologies have since evolved into the backbone of the firm’s operations. Over 275 family offices, institutional investors, capital allocators, and asset servicer clients are proof that Canoe has become a leading provider for the alternative investment industry.
Types of assets: Alternative assets
Type of data sources: Capital calls, distributions, financial statements and tax documents.
Other features: Canoe’s fund master currently has over 33,000 funds and counting. Through the firm’s unique shared intelligence, the data from every new fund document is mapped, speeding onboarding time, improving accuracy, and increasing overall operational efficiency.
Flanks
Flanks is a wealth tech platform that optimises operational efficiency by automating and scaling the connection with custodian entities. It allows family offices to receive all data on any financial product globally across any custodian entity.
Flanks optimises the relationship between family offices and their clients. It achieves this by providing a comprehensive overview of information through its reporting tool and streamlining operations with its aggregation tool. This enhances communication and eliminates errors, making the experience smoother and more efficient for all parties involved.
Types of assets: Alternative assets and custodial accounts
Type of data sources: Financial statements, capital calls, distributions and financial statements.
Other features: Flanks offers a banking API that provides family offices with a direct feed of information from their banking institution.
Landytech
Landytech is an investment reporting solution for asset managers, family offices, and fiduciaries. Its software platform, Sesame, acts as a single source of truth, bringing all asset information into one place with an intuitive user experience.
Since its founding in 2018, Landytech has been helping asset managers, family offices, and trustees focus on their primary goals: making informed investment decisions and strengthening client relationships.
Types of assets: Alternative assets and custodial accounts
Type of data sources: Bank feeds, custodians, PMS
Other features: Landytech uses MSCI BarraOne and RiskMetrics for enhanced performance and risk analytics. This allows family offices to view asset performance and exposures by allocation, geography, currency, and more.