Family offices that operationally stand out have designed and deployed strategy-aligned, flexible, scalable and ever-improving operating models. It enables them to drive superior performance, deliver consistent value and proactively manage risks. More than often, family offices’ ambitions to modernise and transform are constrained by available resources.
High performance, the burning platform for family office transformation
Rationales for improving family offices’ operating models range from keeping up with technology, complying with complex, ever-evolving regulations, fighting margin pressure, protecting against cyber threats, and attracting and retaining talents to operating a global ecosystem of partners and vendors. This reactive approach often leads to fragmented, loosely connected solutions that are ineffective and costly.
Furthermore, the rapid growth in family office numbers and assets often obstructs the intense competition behind the scenes and the growing consolidation amongst family offices and their wider ecosystem.
To embrace opportunities, deliver stellar customer service, and face current and future challenges, family offices need to operate at high standards in line with the wealth management industry leaders and fiduciary principles.
We rounded up a few companies that you might find interesting.
Canopy
Canopy, is a private & anonymous wealth account aggregation, portfolio analytics and client reporting platform for High... Learn more
SEI – Archway Platform℠
SEI Archway Platform℠ and outsourced services streamline the accounting, investment data aggregation and reporting... Learn more
Black Diamond Wealth Platform
SS&C’s Black Diamond® Wealth Platform offers family offices a fully-integrated cloud-native solution with... Learn more
Etops
Etops is active along the entire value chain of wealth managers and family offices. This includes services, technology... Learn more
Aleta
Aleta provides a truly holistic overview of the family wealth and unlocks valuable insights to elevate your wealth... Learn more
Landytech
Landytech is a financial technology company empowering family offices to make informed investment decisions. Learn more
Turning limited resources to your advantage
Besides cultural or confidence factors inhibiting their change appetite and ambitions, family offices are typically constrained by their limited resources, whether in terms of capacity, team size, time available beyond day-to-day activities, expertise depth, breadth, or available budget for change initiatives. These challenges usually manifest themselves as early as the target design and persist through implementation.
Eliciting your high-level and critical requirements early will narrow the universe of relevant solutions, focus your energy and thus reduce the strain on capacity. Subsequently, orchestrating your change efforts using a risk/reward approach will enable you to drive more impactful change.
Your organisation’s expertise consists of your team and a first circle of trusted advisors and providers. The wider family office ecosystem presents endless occasions to tap deep knowledge and experience at marginal or no cost. Many providers or consultants keenly engage early and share trends and best practices, assist you form and validate hypotheses, as well as surface and brainstorm complex issues.
You can address the budget issue, in part or in full, notably by shaping self-funding transformation roadmaps or by shifting fixed costs to variable ones.
Through the multi-faceted capability lens
It is critical to view and document your business, current and future, through the capability lens. This lens encompasses the multiple facets of people, experience, expertise, technology, processes, controls, partners, and the wider network. While implementing a new system is a great milestone, you will only reap the full benefits once it is properly used and the old habits and tools have been dismissed.
Capabilities are typically defined across two dimensions: functional/service and organisation-wide. When documenting functional capabilities, start from the highest level, for instance, Asset & Investment management. Then, iterate at the sub-service level, i.e. investment strategy, global multi-asset allocation, manager due diligence and selection, deal flow, etc. Identify core or strategic capabilities from those that are enabling or non-core. This will inform key discussions on potential solutions to enhance your capabilities, including the debates on in-house vs outsourced or leveraging vendors vs. building partnerships.
Organisation-wide capabilities usually set the family office apart from its competitors and are not limited to client-facing teams, e.g., driving relentless innovation or delivering extreme service customisation.
Fix tactically, better safe than sorry
Before setting the family office’s sights on the horizon and shaping its future state, ensure you build on sound, robust foundations. Considering the current business model and operating environment, diagnose whether minimum technical and organisational practices are both in place and effective. Ensure they address key risks and protect your most sensitive data and processes.
Do not underestimate the role of quick wins and tactical fixes to address major risks. Beyond the reputational and financial impact, a major breach or operational incident will consume unreasonable resources, affecting both business as usual and the transformation agenda.
Set the bar high when defining the future state
An effective and efficient family office operating model seamlessly supports both its strategy and business model including: value proposition, customer segments, products and services, marketing strategy, revenue model, and pricing. Best practices are a moving target, and achieving them necessitates continuously identifying issues, risks, and opportunities, measuring and benchmarking performance, assessing available options, selecting optimal solutions, and successfully deploying them.
Acknowledging that no one family office looks like the next one, some effort needs to be invested in designing a fit-for-purpose target operating model. Aim to define and build a cohesive, effective, and efficient model.
Stay high long enough
Spend sufficient time discussing, challenging, and refining the high-level target state. Do not conclude too early or rush into detailed requirements. This is even more relevant when exploring domains where your expertise is limited.
The high-level design phase brings tremendous value to all family office stakeholders. It is a unique opportunity to explore the many routes leading to your ambitions, get exposure to leading-edge solutions and best practices, firm up your critical requirements, articulate the relative importance of your decision-making criteria, understand both execution and business-as-usual risks and build confidence for future downstream decisions.
About Exult Consulting
Enabling single and multi-family offices to accelerate the design and deployment of strategy-aligned business and operating models aimed at delivering high performance and exceptional results. Exult Consulting has developed a set of family office-specific frameworks, questionnaires, and diagnostic tools to enable effective decision-making and successful strategy execution. Exult Consulting is recognised for its global business transformation expertise in the financial services industry, covering multinational banks, global consultancies, technology services, and rapidly scaling fintech, servicing the complex needs of 100+ FOs and independent financial advisors.
