What You Should Know About Common Costs Associated with Family Office Fintech

“How much does your solution cost?”

This is typically one of the first questions we get asked by family offices and investment advisors evaluating family office accounting and reporting solutions.

When it comes down to it, pricing can be one of the most influential factors in choosing a family office fintech solution. And while most technology vendors wish that value alone dictated buying decisions, we’d be naïve to believe that budget constraints don’t play a role when it comes to selecting a technology solution.

But technology costs can be tricky. There’s certainly no industry standard and, in many cases, family office software providers may price their solution differently depending on what combination of technology and services you choose from their menu of offerings.

To help you prepare for family office software pricing discussions, we put together a crash course of sorts in family office software pricing. To do this, we identified several pricing structures that are common amongst family office fintech and service providers. Our goal is to help you understand the basic premise of each pricing model so that you can better anticipate costs based on your unique family office structure.

Types of Pricing Models

Flat Rate

One of the simplest pricing models is a flat rate fee. In this structure, the solution is sold at a predetermined price and offers a fixed set of features. Using a flat rate fee, the software provider does not take into account any additional information or detail about your family office like the number of users, entity count, investment types or add-on functionality. This type of pricing structure is typically employed by off-the-shelf software, meaning there’s limited room for customizations.

In short, what you see is what you get.

Per User

Largely self-explanatory, a per user fee is dependent on the number of users that will receive login credentials for the technology platform. This pricing structure is simple and enables your family office or advisory firm to control costs since you ultimately dictate how many users need access to the solution. This pricing structure is often incorporated into the tiered pricing structure described below.

Feature-based

Feature-based pricing allows firms to pick and choose pieces of software functionality to create a unique suite of capabilities. In this model, you have greater control over costs by only paying for what you need while retaining the ability to scale the product by adding additional functionality as your team’s bandwidth grows.

Per Account

Most family offices need to collect vast amounts of financial information – from portfolio transactions, cash movements and account balances to alternative investment activity and valuations. The per account pricing structure charges based on the number of accounts or portfolios within your investment profile. This fee is particularly common across data aggregation and reconciliation services, and can fluctuate depending on the type of asset and whether data is retrieved automatically or manually.

Similar to a per user fee, the per account fee typically fits into a tiered, or escalator, fee structure.

Per Transaction

Although a per transaction fee is a less common pricing model for family office software providers, it will occasionally enter the equation with transaction-based services. For instance, if you leverage ancillary services like cash management processing, bill payment or trade execution, you may see it as a line item in your pricing proposal. These costs are typically framed as processing fees for any cash movements between accounts or invoice payments.

More often than not, this type of fee is in addition to other software-based fees, like per user or per entity subscription fees.

Tiered

A tiered pricing model is fairly common amongst family office financial solutions. This pricing structure offers firms economies of scale. The tiers represent scalability and are designed to provide per unit cost savings as you increase your usage of the solution. Tiers might be based on the number of users, number of entities, number of accounts or assets under management. In a tiered pricing model, you can incrementally increase your subscription as your organization or assets grow.

Assets under Management (AUM)

AUM-based pricing can be one of the more volatile pricing models. Similar to AUM pricing models typically employed by investment advisors, this structure charges basis points, or a percentage of assets, based on the amount of money that’s being aggregated and reported on by your fintech solution. Since market conditions directly impact asset valuations, the amount you are charged on a monthly basis may change drastically.

For this reason, most AUM-based pricing structures also include minimums, or floors, that require a minimum amount to be paid should asset valuations drop noticeably.

Per Entity

No two family offices have the same infrastructure and their unique ownership structures can become very complex – from nested entities and family partnerships to creative investment strategies and esoteric holdings. To handle this degree of complexity and the associated system configuration, some family office fintech companies use the number and type of entities – among other relevant data points – to determine pricing of their solutions.

This type of fee is common amongst tailored family office solutions that require substantial solution configuration to meet the specific needs of each client.

More often than not, fintech providers will use a blend of the aforementioned fees to create their own proprietary pricing model. It’s also common for vendors to package pricing into phases. For instance, they may charge a per account fee for upfront implementation – or setup – costs, while using a flat subscription fee for ongoing usage of the platform or service.

Keep in mind that you can control costs by changing variables and inputs within the cost models to help you ultimately find a solution that meets both your capability and budget requirements.

Although fintech software prices can vary dramatically, understanding the different family office software fee structures can help you anticipate the size of the investment and the degree of scalability in a family office software solution.

Interested in learning about how we price our technology and service solutions for family offices and financial institutions?

Connect with a member of our team to learn more about our award-winning accounting, investment data aggregation and client reporting tools.

An Inside Look into the Relentless Development Philosophy at Archway Family Office Services

This isn’t surprising: long-lasting technology companies, those that thrive amid changes and challenges, are the ones that meet the demands of their clients over and over again without disrupting the way they operate.

This obviously implies ongoing accessibility to the technology as changes take place, but it also alludes to the intentional design and development of features and functionality that build efficiencies and make a user’s job easier. Where’s the value in a change that doesn’t align with — or unnecessarily distracts from — the solution’s core mission?

As advocates of transparency, especially when it comes to product development, we know how compelling a unique and forward-looking strategic vision can be for family offices and financial institutions. But we also strongly believe that an organization’s strategic vision should seek to enhance, not clutter, the capabilities of a platform.

At Archway Family Office Services, our commitment to intentional innovation is embodied by our Relentless Development Philosophy. When you look back on the past two decades of the Archway Platform^SM, the evolution of the product has always been channeled through a long-term vision.

Our resolve to adhere to this vision and to avoid diversions along the way ultimately afforded us the staying power that we have today as an award-winning family office solution within the broader Archway solution suite.

As a part of this ongoing process, there are a few guiding principles that help us deliver meaningful, if not incremental, improvements to our clients.

User Feedback

Technology companies don’t withstand the test of time by making assumptions. Period. They use data, analytics and tangible user insights to establish and prioritize critical enhancements. Through focus groups, enhancement requests and everyday client service interactions, Archway Family Office Service has amassed a wealth of enhancement requests and leverages these requests internally to help drive our strategic roadmap for the Archway Platform.

Peer Dialogue

Many organizations believe that internal disagreements negatively impact a business. But we think a dose of healthy opposition leads to some of the greatest product outcomes.

We engage with internal stakeholders across the entire lifecycle of a client — from the sales and marketing teams that help them begin their buying journey to the client service personnel that deliver ongoing product and service support — to ultimately derive the right balance of function and flair when it comes to product enhancements. This is evident in our current effort to redesign the Archway Platform’s user interface scheduled to be released in December 2020.

The interplay of these dynamics puts our internal release committee in a position to design a product roadmap with input from advocates of system power users with complex problems as well as proponents of simple, easy-to-understand solutions. The result is well-rounded innovation.

Frequent Upgrades

Firms that can successfully combine constructive user feedback and the internal exchange of ideas are more likely to deliver effective product enhancements and upgrades that align with the solution’s core mission. And the frequency at which firms release these product upgrades is a key driver in letting users know the value their fintech provider places in product development.

At Archway Family Office Services, we upgrade the Archway Platform on a regular basis through both minor and major releases throughout the year, amounting to hundreds of enhancements on an annual basis. By delivering incremental enhancements seamlessly and often, clients gain access to better tools while not missing a beat in executing their daily operations.

To ensure our clients are aware and up-to-date on these major improvements, we provide complete release notes and documentation through our client support portal. By being transparent and thorough in explaining our upgrades, our clients are able to trust that each change is an intentional improvement to the solution.

So how does this all play out in real life?

Download our latest mini ebook, Our Perspectives: A Relentless Development Philosophy, to learn more about our future of innovation.

A List of Capabilities to Look for in an Accounts Payable Solution

In a different blog post, we highlighted five reasons to use an outsourced bill pay provider. But what about the family offices and financial institutions that prefer to use internal staff to manage their client bill pay operations?

For those managing this function internally, it typically requires you to maintain lengthy vendor lists, process large numbers of transactions and produce time-consuming expense reports. Even with dedicated staff, these operations can be a huge drain on your team.

So with other tasks at hand, how do you save time and resources?

Accounts payable technology.

There are plenty of accounts payable solutions available to family offices, ranging from comprehensive software suites to function-specific online tools. In an ideal world, your accounts payable functions like cash management, bill payment, approval workflow and reporting should reside within your broader family office accounting software package. But, sometimes there are operational reasons why these functions are kept separate.

In these situations, your AP solution should, at the very least, integrate with your family office accounting and reporting platforms.

Whether you are evaluating a comprehensive family office fintech platform or a best-of-breed accounts payable tool, consider the following capabilities to help you create efficiencies and automate manual bill payment processes.

8 Must-Have Accounts Payable Features

1. Automated workflow

Paying bills on behalf of high-net-worth families and individuals requires rigorous controls and processes. Automated workflow around common AP tasks like invoice review, accounts payable data entry, invoice approval, payment settlement and cash flow reporting allows you to define complex processes and multi-level approval hierarchies to ensure that no review is overlooked.

2. Client portal with digital payment approval

Client portals are gaining popularity among family offices and advisors working with HNW clients. While they are primarily used for reporting purposes, some client portals also feature tools that allow end-clients to interact with their advisors. For example, the Archway Platform^SM features a client portal that allows family members to view invoices, approve vendor payments and monitor their expenses.

Users can also configure pre-approval rules or set dollar limit thresholds for specific vendors or recurring payments. Using these tools, you can digitize manual processes, like phone calls and signatures, and smooth otherwise clunky AP procedures.

3. E-signatures

The COVID-19 pandemic and ensuing physical distance has shed new light on the need for digital tools that allow family offices to ensure continuity across business processes, especially essential functions like bill payment. Leveraging an AP solution that securely stores e-signatures enables permissioned system users to immediately apply signatures to checks once approval criteria is met.

This creates a fluid digital process, and eliminates the need for family members or account holders to be physically present for check signing.

4. Audit trail

An audit trail offers a complete history of any system transaction, including bill payments. Since family offices and financial institutions have a legal and fiduciary obligation to protect client assets, audit trails help ensure that they are tracking who, when and where a payment was issued.

5. Document manager

For wealthy families, there is usually a high volume of vendor invoices and bank statements related to various accounts, credit cards, properties and assets. Combined with weekly expense reports and other AP documents, files accumulate quickly and risk getting misplaced in convoluted file structures. Through a centralized document vault, users can securely upload, categorize and share relevant AP-related documents.

6. Various payment methods

Depending on how your firm pays bills or moves cash on behalf of individual family members, finding an accounts payable solution that offers various payment methods is key. Whether you use paper checks or electronic payments like ACH files and wires, your solution should offer the right method for your bill payment process.

7. Accounts payable and cash flow reporting

Fintech platforms with integrated accounts payable tools tend to offer a greater selection of internal and end-client reporting options — from AP-specific reports to a broader suite of family office financial reporting.

Using the Archway Platform, you are able to produce investment and net worth reporting alongside expense reports by bill type or vendor, invoice aging and consolidated cash summaries to determine when payments are due, which accounts are affected and how it impacts your client’s expense trends for the reporting period. Meanwhile, end-clients can access a complete analysis of their financial health including their cash balances, expenses and spending habits.

8. Cash management straight-through-processing (STP)

Every family office has a different process for moving cash, whether it’s between internal accounts or to outside parties. Depending on your own process, it’s worth considering whether your AP solution offers straight-through-processing for seamless cash movements. If your firm deals with a high volume of transactions or a substantial number of international payments, the STP approach can eliminate several manual touchpoints throughout the payment process and speed up the delivery of cash.

By finding an accounts payable solution that checks the appropriate boxes for your firm’s unique bill payment and cash management processes, you can spend less time on manual AP processes while ensuring secure, timely management of the family’s bill payment needs.

Interested in finding a family office software solution with integrated accounts payable capabilities? Learn more about the Archway Platform and its purpose-built accounts payable tools.

Useful Tools to Help Simplify Partnership Accounting for Wealthy Families

Family limited partnerships are one of the most common organizational structures among family offices and wealthy families. Unlike trusts which are managed by outside trustees and fiduciaries, they allow the family to retain control over their investments, while reducing tax impacts, protecting assets and streamlining the transition of wealth.

Despite their appeal, the accounting behind family partnerships poses distinct challenges for family offices and advisors to high-net-worth families, especially when it comes to partner allocations, capital activity, changes in ownership and nested relationships.

Without the right partnership accounting solution in place, partnership accounting operations become increasingly manual, time-consuming and overwhelming.

As a family office fintech provider, we understand the common challenges associated with partnership accounting and have spent the past two decades refining the Archway Platform^SM to adeptly handle the most complex partnership accounting scenarios — from side pockets and sleeves to multi-layered ownership and sophisticated allocation structures.

Based on our experience delivering partnership accounting technology and outsourced partnership accounting solutions, we put together a short list of capabilities to be on the lookout for as you evaluate potential partnership accounting solutions for your family office or high-net-worth client.

1. Flexible Allocation Methods

Allocation methodologies can depend based on internal business rules and partnership agreements. Choose a partnership accounting solution that gives you a variety of options for income and gain allocations to accommodate your specific requirements.

For instance, Archway Platform users can choose from four unique income allocation methods including by capital account, by committed capital, by called capital and by units, and four unique gain allocation methods including the option to mirror the income allocation method, by full or partial netting and by tax layering.

2. Automated Ownership Calculations

Ownership oftentimes changes throughout the lifecycle of a partnership through investor contributions, withdrawals or holdings transfers. Rather than having to manually calculate and track changes in spreadsheets, a sophisticated partnership accounting solution will automatically calculate the changes in ownership based on activity entered into the system.

As a result, your family office can deliver reporting across the partnership and the underlying partners that accurately depicts each partner’s pro rata ownership of the partnership’s assets as of a point in time.

3. Multi-Layer Relationships

Keeping track of the relationships between partnerships and their owners can be a complex process, particularly when entities own other entities within master-feeder or partnership-investor structures. At Archway, we refer to these multi-layer relationships as nesting. Advanced partnership accounting technology like the Archway Platform helps you untangle the web of nested relationships, and all other ownership structures within the family office.

This functionality helps family offices allocate profit and loss from the top-level entities down to the individual partners and ultimately deliver clear, concise reporting for the partnerships and the underlying partners.

4. Advanced Partnership Reporting

Reporting on investment partnerships is a complicated task that is only compounded by a lack of advanced partnership accounting technology. As you evaluate partnership accounting solutions, look for a solution with integrated reporting tools that give you on-demand access to consolidated partnership and individual partner reporting.

We recommend asking for report samples to confirm the availability of financial statements, general ledger reports, investment performance analyses, partner statements and tax detail reports.

5. Outsourced Partnership Accounting Service

Family office partnership accounting solutions can be delivered in a variety of formats — from partnership accounting software to specialized outsourced service offerings. Even if you plan to implement an in-house partnership accounting software for your family office staff, ask if the provider offers an outsourced partnership accounting service option as well.

Outsourced partnership accounting services help provide accounting and reporting continuity in the event of a sudden or unplanned loss of staff, reassigned job responsibilities or simply not enough bandwidth across the family office. By selecting a provider that can deliver both technology and service solutions, you can ensure your partnership accounting needs will always be met.

Within Archway Family Office Services, we offer both. Our team of accounting and tax professionals are trained to serve as a seamless extension of our clients’ in-house staff to provide assistance with partnership accounting operations like capital activity processing, book and tax allocation management, tax reporting and 704(c) tracking.

While investment partnerships and the supporting partnership accounting operations vary from firm to firm, leveraging a purpose-built partnership accounting software or service can help you flexibly handle a wide variety of partnership accounting scenarios within a single, dedicated solution.

Interested in learning more about the Archway Platform's integrated partnership accounting capabilities?

Discover the platform's purpose-built partnership accounting tools.

4 Mini Case Studies Highlighting the Benefits of an Integrated Accounting and Investment Platform

Beginning in March 2020, tens of millions of American workers migrated to remote work environments as a result of the global pandemic. Several months later, as the country reopens and employers begin executing their back-to-office strategies, the idea of remote work is gaining traction as a part of a long-term strategy for employers who are acknowledging the benefits of working from home.

But operating in a remote work environment has its own set of challenges and requires, among many things, technology and systems that help employees perform their daily tasks.

For some family offices, the transition has exposed inefficiencies in their accounting, investment data aggregation and reporting processes as they’ve been forced to use read-only spreadsheets and found themselves locked out of accounting files in single-user accounting systems.

For other family offices — those with a fluid technology stack — the past few months have reinforced the importance of flexible, web-based technology platforms. Among these modern family offices, the accounting and investment teams have been able to seamlessly collaborate and deliver uninterrupted financial reporting to the family members and family office leaders.

At Archway Family Office Services, we felt that it was important to understand and demonstrate the value of an integrated family office software platform — both in the remote work environment of today and in its more general purpose of helping family offices become more efficient.

But we didn’t want this to be from our perspective. Rather, we wanted to present the value of the Archway Platform^SM from the perspective of one of our family office clients.

So we reached out to a prominent family office client located in Houston, TX to understand how the Archway Platform has helped them address key pain points and, more recently, helped them smooth their transition into a remote work environment.

Below, we outline four mini case studies based on their experience.

An Introduction to the Family Office

Archway Family Office Services is dedicated to the confidentiality and privacy of our clients. To ensure anonymity, we will refer to the client as Family Office, the Family Office Controller as Carrie and the Family Office Tax Manager as Elizabeth.

The client is a single family office providing investment, tax, financial reporting, estate planning and financial planning services to three generations consisting of 20 family members. The family office manages more than $400M in assets including equities, fixed income, private equity, hedge funds, real estate and personal assets.

Prior to running the Archway Platform in-house, the Family Office partnered with Archway Family Office Services to receive monthly financial reporting through our outsourced consolidated reporting service. As they added new resources to the internal Family Office team, they looked to expand their use of Archway’s family office solution.

They ultimately elected to license the Archway Platform for in-house use of its integrated general ledger, automated data feeds, investment data aggregation and reconciliation tools, partnership accounting and financial reporting functionality.

The Family Office has been successfully operating the Archway Platform for three years and its in-house team is currently comprised of five staff members, four of which use the system.

Mini Case Study #1: Automated Investment Data Aggregation

Problem: Prior to partnering with Archway Family Office Services, the Family Office staff was responsible for manually aggregating financial data. This required logging into each of the family member’s accounts to retrieve bank and brokerage statements, and manually preparing valuation statements for the Family Office’s tax manager, Elizabeth.

This process was time-consuming and required both the aggregated investment data and copies of the account statements to be stored on a shared network, which posed accessibility issues and limited the number of users that could modify the data at any one point in time.

Solution: The Archway Platform automatically receives position, trade and cash detail from custodians and banks on a nightly basis. The Archway Family Office Services team, not the client, is responsible for monitoring system integrations, ensuring that data is received on time and acting as an intermediary between the client and the data provider to address any errors or exceptions.

The platform also generates the underlying journal entries associated with each transaction type, which are automatically booked to the general ledger. As a result, Carrie and Elizabeth have immediate access to updated and complete financial information — aggregated across all of the family members and family office entities, including family limited partnerships, investment partnerships, trusts and the family foundation — every morning.

And since the Archway Platform allows multiple users to work within the system at the same time, Carrie and Elizabeth are able to perform their job functions within the platform simultaneously.

Mini Case Study #2: Integrated Investment and Tax Data

Problem: Though Carrie and Elizabeth have unique roles within the Family Office, they both contribute to three primary family office functions: income tax compliance, financial management and reporting across all of the family’s legal entities. With a less sophisticated solution in place, the team was forced to plan and communicate who would be working inside each of the entities at any given time to avoid overlap and potential loss of data.

Further compounding the situation, the Family Office lacked integrated systems, making the process of capturing investment detail, including gains/losses, dividend and interest income and alternative investment cash flows, problematic. Carrie was spending time manually collecting and updating investment activity and market values in one place before feeding it to Elizabeth, who was manually recording and reconciling income statement and nested ownership activity in another place.

At some point, all of this information had to be shared and consolidated for compliance and reporting purposes — a tall order if Carrie and Elizabeth operated in the same office, but even more challenging when one or both worked remotely. All in all, it was a lackluster solution for fusing the investment and tax sides of the Family Office together.

Solution: Functioning as a single system of record for accounting and investment detail, the Archway Platform inherently allows multiple users to work in the software and use the same tools simultaneously without impeding other users’ activity in the system. More importantly, the prior day’s investment activity is available in the morning alongside the system-generated journal entries.

From there, the Family Office is able to seamlessly collaborate through a tag team approach of inputting and interpreting information in the system — whether through the searchable and filterable GL and portfolio transaction databases or through formatted reports. The family office is able to limit the number of back and forth exchanges related to sensitive financial information and, instead, focus on fulfilling their financial management, tax compliance and client reporting functions.

Mini Case Study #3: Comprehensive Financial and Net Worth Reporting

Problem: Consolidated financial reporting is one of the core — and most challenging — functions of the Family Office. With the family’s investments spanning multiple asset classes and three generations of deeply nested ownership, reporting was complex. Factor in manual investment tracking, clunky data input methods and convoluted Excel spreadsheets, and you’re looking at a burdensome — and largely inflexible — reporting process.

A process that could be unhinged if someone was out of the office, a file was corrupted or a step in any part of the procedure was missed. As reporting expectations among family members began to shift — specifically towards digital reporting tools — it became clear that the Family Office’s legacy reporting process would not be sustainable much longer.

Solution: The Archway Platform’s powerful reporting engine is designed to ease the burden of financial and net worth reporting for family offices. Using the platform’s database of accounting and investment detail, Carrie can produce net worth, holdings and asset allocation reporting for individual family members and households, while Elizabeth can produce financial statements, gain/loss reporting and partnership capital and tax account detail.

Since reporting can be generated at various levels, including position, individual and user-defined group, Carrie and Elizabeth are able to perform multi-level analysis. The Family Office has access to 200+ configurable parameter screens to customize reporting, making it easier to fulfill the requests of different households and generations.

The platform’s reporting tools also enable the Family Office to configure recurring monthly, quarterly or annual report packages that can be scheduled and delivered automatically. Given the web-based nature of the application, users with the proper permissions can access shared reports to avoid lapses in reporting that may occur in remote or out-of-office scenarios.

In short, using the Archway Platform, the Family Office was able to eliminate manual data collection, simplify the report creation process and establish uniform data access for the Family Office staff.

Mini Case Study #4: Web-Based Access to Consolidated Financial Information

Problem: The Family Office staff was located in multiple physical locations requiring secure access to the firm’s network files. Without an online solution, important financial documents were stored in file folders and aggregated financial data was stored in spreadsheets and shared via email. The Family Office recognized the need for a more secure solution that took advantage of the modern technologies available to family offices and other private wealth management firms.

Solution: The Archway Platform’s web-based delivery model ensures that Elizabeth and Carrie can access the platform from anywhere, regardless of their physical location. Available via any web browser, the Archway Platform satisfies a need for a digital tool that can be accessed on-demand. In the wake of the COVID-19 crisis, this became more important than ever as the entire Family Office team transitioned to remote work environments.

Carrie, Elizabeth and the broader Family Office team are able to securely share documents and financial data via the system and, more importantly, perform their day-to-day operations in tandem with one another. Both Carrie and Elizabeth agree that the Family Office’s financial data aggregation and reporting operations were unaffected throughout the transition because of their prior implementation of the Archway Platform.

Watch a demo of the Archway Platform to find out how the technology can help you integrate your accounting, investment data aggregation and financial reporting operations to establish efficiency and flexibility in an ever-changing family office environment.

DISCLAIMER: These case studies describe the attributes of a specific Archway Group client based on objective criteria, including organizational goals, product offering and asset size. Discussion of results is intended to help clients understand Archway Group’s customized approach and capabilities and should not be regarded as representative of the experience of other clients nor indicative of future results.

How Family Offices and Financial Institutions Can Create Effective Financial Reporting for High-Net-Worth Families

As a financial caretaker for high-net-worth families and individuals, you face a lot of pressure to not only manage and preserve your clients’ wealth but also communicate and deliver on it at any given time.

With an abundance of tools and solutions available to help your team manage the workload, it’s easy to get pulled down the path of delivering too much of the wrong information that ultimately fails to engage your end-client. Avoiding this mistake is crucial.

After all, the purpose of client reporting is to translate complex investment data into clear, concise reporting that meets your clients at their level.

There’s a lot to consider to make client reporting effective, but a few of the most important questions to answer include:

• Who will be reading the reports? What level of reporting detail are they comfortable with?
• Is the reporting easy to consume? Does it meet their expectations?
• Are you including the right types of reporting? For instance, is the client interested in a monthly review of cash inflows and outflows or would they prefer to look at investment performance and exposure?
• Are you able to access all of the data you need to completely represent the client’s financial holdings? Are you able to easily slice and dice the data in a way that makes sense to the reader?
• Does the report layout help the reader visually move through the data? Do ancillary charts and graphs add value or are they a distraction?
• How will you get reporting to your end-client? Digitally? In person?

Below we’ve compiled a list of tips for reporting on high-net-worth wealth – a set of client reporting dos and don’ts – to help your family office or financial institution produce effective personal financial reporting.

The Dos and Don'ts of Client Reporting

DO: Ask family office staff and family members what financial reports they wish they had

In a world where financial reporting options are endless, how do you know what reports the client wants if you don’t ask? Invite them to share their opinion, learn their preferences and listen to their questions – at the end of the day, personal financial reports should represent the client’s complete net worth in a way that makes sense to them.

To start, meet with individual family members or households to get a better understanding of their financial knowledge and reporting expectations.

Questions you could consider asking your clients:

• How do you measure financial success?
• How do you want to categorize your holdings?
• How do you want to view investment performance? In a table or a graph?
• What level of detail do you like to see on your personal financial reports? Do you prefer to see a summary of your holdings or the underlying position detail?
• Are you interested in traditional financial statements like balance sheets, income statements and cash flow reports?

Similarly, be sure to meet with internal family office staff and advisors to define what operational reports can be produced to improve financial insight and decision-making.

DON’T: Implement a “one size fits all” reporting style

This suggestion is simple, but often overlooked – if your family office or financial institution is looking to stay competitive in a growing and evolving industry, forgo the cookie-cutter style reporting and focus on delivering reports that speak to each individual client’s needs, goals and preferences.

DO: Offer report flexibility and customization

Report customization is the obvious next step once you understand your end-clients’ reporting preferences.

That said, starting with a blank canvas can prove to be challenging. We recommend taking a controlled customization approach. For example, family office software can provide a library of accounting and investment reports, each with their own unique set of parameters. Using the parameters as guide posts, family office staff can run a single report in a variety of different ways to help them align reporting with each of their end-client’s unique expectations.

DON’T: Feel like you need to write your own reports

Although report writers allow you to create wholly unique reports, they can be cumbersome to use and often require a certain degree of technical skill. In lieu of a standalone report writer, look for a family office fintech solution that offers built-in reporting capabilities with plenty of room for customization.

By using a software solution with an integrated reporting engine, you can eliminate the need for in-house technical support and reduce the amount of time spent maintaining the reports.

DO: Seek ways to improve your family office reporting speed, efficiency and efficacy

“How can I speed up my family office reporting process?” is a question we hear regularly from family offices evaluating the reporting tools within the Archway Platform^SM.

One of the ways our family office clients accomplish this is by leveraging the automated report preparation and delivery tools within the Archway Platform. These built-in features eliminate manual data collection, report creation and delivery processes. Using these tools, family offices create a consistent, repeatable reporting process and provide a predictable reporting experience for their end-clients.

DON’T: Stick with your current family office reporting process for fear of change

We understand it can be difficult to shift away from your existing reporting processes – after all, they’re comfortable and familiar. But they can also be frustrating and, more consequently, time-consuming. If your family office has an aversion to change, consider a few “what if” scenarios.

What if I could aggregate data more efficiently and quickly? What if I could set up and schedule recurring report runs? What if I could save my report settings instead of recreating them every time I have to run a report?

Innovative technology for family offices is at your doorstep, it’s just a matter of embracing it.

DO: Implement a family office client portal

One of the biggest trends we’re seeing in family office fintech – and a key differentiator for private wealth firms – is the use of client portals. With benefits like on-demand access to personal financial reporting and availability from any location, it’s no surprise that client portals are at the top of the wish list for family offices and financial institutions.

By implementing a family office client portal, your end-clients have self-service access to their financial data via interactive dashboards and intuitive charts, graphs and tables. With clients viewing their aggregated financial information on their own schedule, you can reduce the amount of time you spend fielding questions and delivering reports.

DON’T: Assume that every family member will use modern reporting technology immediately

It’s likely that you’re producing reports for family members across several generations, each with their own level of comfort when it comes to technology. Knowing your audience – and respecting their technology preferences – is key to engaging your clients.

If you’re working with a tech-savvy family member, they’re likely already demanding digital access to their personal financial reporting. But if you’re working with a family member who is less interested in digital reporting, take your time warming them up to the technology by introducing it slowly and purposefully. It’s important to be patient and thorough in your training to help mitigate the risk of overwhelming your clients and potentially disenchanting them with the client portal altogether.

DO: Leverage automated reporting software and outsourced financial reporting services for help

In an age where everything and everyone moves at rapid speed, it’s essential that your family office moves at a similar pace.

Designed to adapt to your clients’ evolving interests and needs, family office reporting software offers purpose-built features and functionality like advanced data aggregation and reconciliation tools, user-defined classifications and groupings, integrated performance reporting and extensive report libraries.

Likewise, many firms employ teams of accounting and finance professionals that can operate the software on your behalf to ultimately deliver consolidated financial reporting to you and your end-clients.

Whether you’re looking to produce financial reporting in-house or leverage an outsourced service provider, a fintech solution designed specifically for family offices will help you deliver internal and end-client reporting with greater accuracy, speed and clarity.

DON’T: Rely on manual, time-consuming reporting processes

If your family office is still sifting through clunky spreadsheets and stacks of paper statements or manually maintaining classifications for grouping data, you could be saving time and closing the gap on human error.

Although familiar and easy to use, generic reporting solutions – including spreadsheets – are prone to error and aren’t intended to be a reporting tool for complex family offices. Adopting family office-specific reporting software can eliminate these antiquated means of reporting and provide system-wide functionality that is built for the management of complex wealth.

Ready to find out how you can take your personal financial reporting operations to the next level?

Learn how the Archway Platform can help your family office or financial institution handle complex reporting requirements and produce insightful, relevant reporting for your high-net-worth clients.