With the significant growth of family offices globally, they will require more sophisticated and talented human capital, more advanced technology, revised investment strategies, better financial analysis and reporting and more transparency. In addition, governance and succession planning are two areas that should be reassessed.
One area of our concern, is the software being used by many substantial family offices ($1B plus in assets) and smaller family offices. With cyber-security and ransomware issues, it is imperative that family offices utilize the most effective technology to prevent attacks that may compromise their data. According to the SEC, small and medium size businesses are the main targets for data theft. Many criminals use the small businesses as a gateway into larger firms.
Family offices are continuing to increase direct investments and therefore should use the most effective investment strategies for their portfolio. While some SFOs have an outstanding internal team of investment professionals, others are utilizing a wealth manager to allocate the family’s assets. Today many single family offices are also invested in “club deals”, as they pool their capital with other SFOs.
One of the most significant issues that doesn’t seem to be addressed properly is “succession planning”. Many families believe that they have an effective plan for preserving their wealth and passing it on to other family members, however after evaluating numerous plans, we have found that over 50% of the plans are not going to work.
For additional information on how to establish an effective succession plan, a better cybersecurity platform, improve governance and inter-generational relationships, or how to improve your infrastructure and hire the best talent available, please contact Michael Rosenblatt at: Michael@questorg.com or via telephone 212-971-0033.
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