Why Family Office Accounting is Broken and What Needs to Change

NEWSLETTER

Family office insights this week:

• How to solve family office accounting challenges

• The 10 wealthiest families in the US

• 6 Alternative investment themes for family offices

• Podcasts: family offices and AI

• 5 Family office jobs

Why Family Office Accounting is Broken and What Needs to Change

An outdated and incongruous approach is overdue for change.

It’s worrying how many family offices rely on a single accountant. 

Someone totally trusted by the principal after decades together, with critical knowledge locked in their head, and everything held together by a patchwork of spreadsheets and manual processes. 

It’s always worked in the past, so what could possibly go wrong in the future?

The simple answer: everything. 

Family offices are notoriously complex.

Much of this complexity stems from the need to coordinate across multiple entities and locations, from investments, tax, and compliance to estate planning, philanthropy, and beyond.

As a result, accurately recording, classifying, and reporting financial information is inherently complex — and always will be.

Some common challenges:

• Aggregation - varied asset classes, particularly illiquid assets: real estate, direct investments, private equity, art, wine etc. 

• Multi-entity complexities - individuals, companies and structures, different jurisdictions; entities where not everything is reliably booked 

• Internal controls - with small teams it’s challenging to ensure that adequate controls are in place

• Cybersecurity - a growing risk and consideration for any family office managing vast amounts of financial data

Technology has evolved and is starting to address the challenges.

We spoke with Dean Palmiter from Asseta AI, which he suggests is the only modern family office-dedicated platform to combine both accounting and investments.

“I have worked for more than a decade helping over 100 family offices to upgrade their technology between my time at both Oracle, Sage and now Asseta. Most families use antiquated technology, spreadsheets and paper-based processes.” 

This approach led to numerous problems, which Palmiter saw recurring time and again across the many family offices he worked with.

“They would use single-entity accounting software packages such as Quickbooks, which leads to unscalable manual processes and data silos. Or use a generic accounting/ERP software like Sage or NetSuite and hire a consulting firm to customize it to try to meet their needs.”

He notes that family offices underestimate the risks of continuing to rely on outdated systems.

“Spreadsheets are free and infinitely flexible - they can be customized to their hearts content, and they feel that spreadsheets are secure and private,” Palmiter said, “But besides being manual and error prone, they expose themselves to key man risk, because usually it’s only one person that knows how the spreadsheet was built.” 

He also highlights the lack of audit trails and document storage as key drawbacks of spreadsheets - shortfalls that lead to files being scattered rather than centralized in a secure, auditable system of record.

Seeing these issues motivated Palmiter to build a more effective solution.

“Asseta was designed for multi-entity financial management from day one. We have built partial ownership, multi-tiered hierarchies, with allocations, intercompany automation and multi-currency natively at the core of our system, whereas other accounting systems like Sage and NetSuite require bolt-on modules.” 

Palmiter knew Asseta had to address the core challenges he consistently saw family offices facing — the most common being:

• Understanding how much cash they have on hand right now, and where it is

• Account reconciliations and categorizing transactions with multiple dimensions e.g. entity, family member, vendor, etc.

• Intercompany activity tracking and eliminations automation for real-time consolidated reporting across many entities.

• Multi-entity bill pay with approval workflows

• Partial and minority ownership allocations and consolidations

Then there are the growing needs of the next generation, whom the older generation want to get more involved. 

But when these younger members engage with existing systems, they find antiquated chaos, not the iPhone-like experience they’re after to manage their wealth.

“They want to spend less time on busy work, more time to be spent with family, or explore investments,” Palmiter said, adding that they also specifically want to apply AI-driven automation and insights.

With Asseta, he has taken this vision forward, highlighting how it uses Agentic AI that’s ”trained in various mundane tasks such as transaction categorization, document scanning, data aggregation, bill pay, capital call management and more.”

While many tech solutions are experimenting with AI—often with mixed results—Palmiter believes that applying AI to accounting works, given the enduring nature of these challenges.

He also sees family offices exponentially growing their capabilities through AI, but stresses how they'll need to implement better technology now to stay aligned with a fast-evolving industry.

“Single family offices without strong modern technology foundations will not be able to harness AI to remain competitive. AI and Agentic solutions can fill in the need for entry level roles like controllers or accountants and enable strategic decision-making for the investment team and C-Suite.” 

𝕏 highlights

The top ten wealthiest families in the US.

Family office Alternative investment themes.

Real estate: what $1 million will buy you.

 💼 where to work

The April Family Office Jobs newsletter hit your inboxes this week. Jobs included:

Investment Associate (Dunai)
Real Estate Analyst (London/Gibraltar)
Private Estate Manager (Ohio)
Security Manager (LA)
Accountant (Texas)

+5 outstanding family office candidates.

📚 what to read

In Supremacy: AI, ChatGPT, and the Race That Will Change the World, Parmy Olson examines the fight between OpenAI and DeepMind. A look at how commercial pressures have overtaken the initial utopian world view of the early AI pioneers.

📻 what to listen to

This episode of Frazer Rice’s Wealth Actually explores Family Office AI. FOs are embracing AI, but without strong governance and structure, they risk reputational, operational, and compliance pitfalls. Tim Plunkett argues that high-end governance must guide AI integration in these informal environments.

📺 what to watch

Intelligence is about to decouple from us.

And finally…

On Wednesday, the April jobs newsletter hit your inboxes. An accountant position in a Fort Worth, TX family office was the most popular job.

Monday’s Family Office Buzz was a popular one. It featured a look at life in a MFO, the UBS Family Office Quarterly report and a primer on Alternative investments for family offices.

Until next week, Happy Easter, have fun, take care.

See you on 𝕏 or LinkedIn.

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