At The 2019 Family Wealth Alliance WealthTech Symposium I was asked to provide my insights on the future of WealthTech and ten years of experience using advanced technology that enhances the human touch of professional family office services. For the next three weeks,we’ll be sharing our perspective on the questions posed at the event..

The most significant change I have observed is the new operating model for wealth management firms as they have shifted their core focus from asset management to holistic family office services platform. We’ve seen the significant advancements and challenges from this shift. Previously those holistic services were only available to those with a net worth of $100 million and above. Now, many teams have found a way to deliver these specialized services at the 5-10 million net worth level. Technology has certainly played a role in that advancement. The challenges that we are now facing are also technology related. Here’s why:

  • The NIS side of this holistic client model has, in many circumstances, negatively impacted profitability, particularly for firms still using a pure assets under management client fee model.
  • Underlying the drag on profitability is the direct correlation of inefficiency and the growing volume of information relevant to the management of those NIS. This inefficiency isn’t at the workflow level, its biggest impact is at the senior client services level; Sr Advisors are spending 20-30% of their day on complex information – not complex wealth.
  • Clients are also experiencing the access problem. While portals seemed like a good idea, in reality they’ve just become another disparate system that the service teams need to manage.

Family Offices today are like a city that has experienced significant population growth. In its early days, basic roads and services were sufficient to meet the needs of its citizens. As the population grew, the city realized it must build better infrastructure or its systems would collapse under the weight of the growth. The next stage of technology infrastructure is available for family office firms experiencing the same type of growth.

So, I think wealth technology and client demands have, in a sense, grown up together. Growing firms can now leverage their experience and build out advanced technology infrastructures as innovative as the holistic service model they have evolved.

Check back next week for more insights from the 2019 Family Wealth Alliance WealthTech Symposium.