Family office insights this week:

• The family office tech landscape at a glance

• The returns family offices are expecting

• Books: the extreme excess of success

• Jobs: three more senior family office roles

• Update on the Dealflow newsletter

The Family Office Technology Industry in 2024

Insights from the latest Simple Family Office Software & Technology Report.

Simple published their Family Office Software & Technology Report 2024 last week. We also spoke to Simple’s CEO and founder Francois Bortha to hear his thoughts on the latest data.

The report covers:

• the state of the industry

• the needs of family offices

• insights from various WealthTech companies

In its fifth edition the report provides intel on family offices and how they operate, but it’s the insights from polls with these family offices and software providers that offers the most value.

Reading the report does however surface an unanswered question.

Since family offices have had years to migrate onto purpose-built software that promises to increase their efficiencies, improve portfolio management and secure their data… why do most still rely on Excel? 

Perhaps it’s an ingrained resistance to technological change, but this report and the responses from both family offices and software providers thankfully suggest that’s (slowly) changing.

Key trends in report

Software industry growth

“In many ways, family offices today are like startups” says Francois Bortha “they’re assessing tech stacks, making crucial hires, and building out their infrastructure. For many, this is their first time building such foundations, creating both challenges and immense opportunities for innovation.”

All software providers surveyed reported growth, which isn’t surprising considering the growth of the overall family office industry. However, much of the growth is from established family offices, not new ones.

A key figure here: 89% of family offices surveyed admit to feeling “less- than-adequately” invested in their tech stack. 

And perhaps the tide is shifting (against Excel) finally: 49% of family office respondents indicated that they are developing a new digitization strategy.

“Drivers of industry growth include the rising number of UHNWIs, new family offices, and the often-discussed theme of next- generation wealth transition. Demand for better investment screening and decision-making tools, including ESG considerations, also contribute. The increasing complexity and diversity of investment portfolios lead investment managers to look for integrated, customizable, and digitized solutions.”

Data security a priority

There’s a growing concern amongst family offices here, not surprising considering 79% reported some form of cybersecurity attack in recent risk report earlier this year.

Cybersecurity Threats and Data Breaches is the number one technology challenge foreseen by family offices.

‘Ensuring Data Privacy and Compliance as the fourth biggest challenge - it’s clear that threats data privacy loom large for family offices.

Different users, different needs 

The report breaks down various family office archetypes which is useful to help understand how varying user needs are.

Single Family Office teams seek different value compared to Multi-Family Offices, whether private or commercial.

It’s helpful to know what matters to different groups: 

• Wealth owners want an overview, plus secure storage and means to communicate

• Family office professionals want reporting, process automation and practical integrations 

• Wealth Managers & MFOs want all these, plus white label capabilities to market to their clients

AI still a buzzword 

There’s much belief that artificial intelligence will make a difference in the next few years.

Francois Bortha has noted AI’s disruptive power, “AI has the potential to redefine roles within family offices, much like it has for developers, where it’s accelerated productivity tenfold. By harnessing AI’s power, family offices can significantly enhance decision-making and streamline operations, freeing people to focus on more strategic, value-adding tasks.” 

However most family offices don’t use it, and as the poll below reflects, it’s primarily for administrative and process automation purposes.

The report notes that 100% of software companies polled currently utilize or plan to utilize AI technology in their offering.

Borth has highlighted the opportunities for late adopters: “If AI’s promises hold, family offices that haven’t yet implemented portfolio management tools might find themselves in a leapfrog moment – bypassing traditional systems and using AI to manage portfolios directly, moving beyond deterministic databases to intelligent, adaptive solutions.”

Most beneficial software 

Investment reporting still ranks as the most valuable use case for family office software.

Security and risk management is gaining on it though.

A separate poll on family office trends ranked Education and Next-Gen Involvement highly, so expect these to grow in attention.

Family office demands 

Software providers shared that customization of their solutions was the most common demand from their family office clients.

More features and better integrations were next, followed by again, security.

Interestingly, Simple’s own survey of their family office users noted the top technology request as better integration between products.

Technology will need to solve the problems it causes

The report goes into further detail on a number of areas, notably Data Intelligence, AI and Security.

Family offices also highlight a few other big themes: the onboarding process, seamless integration with third-party ESG software, and how well solutions manage private markets data.

Family offices are calling for “better integration between products” and the “integration of disparate systems and technologies”. And while there doesn’t seem to be a seismic shift in the family office technology landscape this year, one thing clearly stood out:

New tech will solve many problems, but it will also create a whole lot more.  

Read the full report from Simple here.

𝕏 highlights

Family office expected returns.

Going back to basics.

More on family offices and private debt coming soon.

 💼 where to work

Three notable family office job opportunities currently open…

Director of Marketing - Element Pointe Family Office (Miami / Multi-Family Office)

Senior Financial Executive - Private Family Office (Chicago / Single Family Office)

Chief Financial Officer - Private Family Office (Miami / Single Family Office)

📚 what to read

Sometimes it’s fun to look at the excesses of success and Sidney Frank excelled at excess!

Frank ran a liquor empire from his bed, he fueled his days with martinis and cigars, kept a team of doctors and mobsters on call.

Selling Grey Goose for $2.5 billion, Sidney created his own decadent universe, where only a select few got a taste of his larger-than-life legacy.

📻 what to listen to

In this short episode of Making Wealth Meaningful, Richard Milroy and David Werdinger discuss What Wealthy Families Seek from Their Trusted Advisors.

📺 what to watch

Identity Crisis… why defining yourself by your career is a problem.

And finally…

Next Wednesday we will publish the first Dealflow newsletter. This will include a selection of deals seeking family office investors.

The jobs newsletter will also be back in November by popular demand!

Family Office Buzz will be back on Monday (here’s the last edition if you missed it) with more of the best content on family offices and beyond.

That’s all for today, happy Friday, here’s to an outstanding weekend and maybe a Martini! 🍸

Until next week, see you on 𝕏 or LinkedIn

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