Technology: September 2016
MarketCurrents Wealth Management focuses on a topic that some families may find daunting but neglect at their risk: technology.
One of the most immediate and obvious problems is complexity of investments. Many of our interviewees said they have gradually branched into a wider range of investments including hedge funds, private equity, real estate, and other difficult-to-value assets such as fine art.
In response, family offices have found themselves forced to commit very large amounts of time and resources to simply create a complete picture of their wealth to the point that professionals can become overwhelmed.
Fortunately, there are a number of platforms available that seamlessly consolidate assets into a single snapshot. These platforms also take data from vendors and banks so there is almost no time required of professionals.
Another challenge that technology can address is the increasingly-complex task of risk management. With family offices invested in a wide range of securities and assets with frequent purchases and sales, it can be very difficult to assess total exposure on a continuous basis.
Several technology providers specialize in real-time risk analysis by receiving data feeds and generating frequentreports. Such robust compliance systems have also become more critical as banks and broker-dealers face tighter regulations and therefore expect more from their customers.
Finally, the looming threat of cyber-attacks and security breaches creates an imperative to adopt up-to-date technology. Professionals using retail cloud services like Dropbox may face more danger than they realize and should also consider customized mobile phones that are designed to eliminate the risk of hacks.