Trustees have a great opportunity to strengthen their relationships with their clients while enhancing their own competitiveness. Find out how.
In today’s unpredictable world, trustees must constantly adapt to change – whether that’s due to evolving market, industry and regulatory developments or the shifting expectations of their clients. Nevertheless, this changing environment creates an opportunity for them to deliver ever higher levels of service in a more efficient way. Building family office services, enabled by the latest technological solutions, is a good way for trustees to effectively cater to the needs of their ultra-high-net-worth clients and their families while enhancing their own competitiveness.
Trustees are increasingly building family office services for these four reasons:
In an increasingly competitive market, there is a business imperative for trustees to stand out. A good way to do this is by using technology as a scalable platform to build a family office service. This technology-enabled service is centred around the client and delivers on their expectations in terms of how they want their wealth to be managed and the service they expect to receive. By building family office services based on the latest technological solutions, trustees can differentiate themselves through the quality of support, insights and reporting they can provide to their clients. Thanks to time-saving tools like automated bookkeeping and reporting, they will also be able to do more with fewer resources – allowing them to protect their margins at a time of rising costs.
Trustees are rightly seen as trusted advisors by ultra-high-net-worth families. So, building family office services is a logical next step in terms of taking their existing client relationships to the next level. Trustees already act as custodians of their clients’ wealth data, which is likely to include investments and private assets that are held in trusts, along with cash. They also provide investment monitoring and consultancy services to their clients. By stepping up to offer a full complement of family office services, including consolidated asset reporting and greater transparency around the fees being charged to the trust by the likes of investment managers and custodians, trustees will be going a step beyond fiduciary duty and therefore exceed the expectations of their clients.
Trustees naturally want to find ways of making themselves indispensable – or ‘stickier’ – to their most valuable clients. At the same time, they know they must respond to the expectations of the emerging generation of clients, who are demanding higher levels of service than ever before. These clients want greater insights into their individual investments, as well as timely updates that give them a near-real-time perspective on the overall performance of their portfolio. Trustees that build technology-enabled family office services are equipped to deliver the information their clients want, at the time they want it, instead of having to manually collate and consolidate investment and asset data from multiple sources. They capitalise on automated software solutions that provide them with near-real-time oversight of their clients’ portfolios. This enables them to achieve the highest standards of investment analytics and reporting so that they can answer their clients’ questions clearly and decisively.
Trustees that build up family office services are well placed to set up superior governance and data management frameworks across their clients’ entire portfolios. Many clients will have complex ownership structures and portfolios that could include private equity, hedge funds and real estate, along with cash, bonds, equities and other investments. It is crucial that clients and family offices can monitor the performance, risk exposures and liquidity of all the investments in these portfolios, especially given today’s volatile markets. To do this, they must establish a strong investment governance framework using a secure system that enables daily limits monitoring, with alert notifications and pre-warning levels for any performance risk, liquidity and exposure metrics. Drawing on the rich information provided by the system, trustees can help all the stakeholders involved with a client’s wealth to better understand how that wealth is being preserved and increased – as well as what steps are being taken to anticipate and manage risk. They can also use these insights to better meet their clients’ future needs.
Building up family office services is a natural and logical progression for trustees. What’s more, by taking advantage of leading technology, trustees will be able to move away from onerous, time-consuming manual processes (including bookkeeping and reporting) and help clients gain control and visibility over their portfolios. Not only will this enable them to strengthen their relationships with their existing clients, it will also put them in a great position to win new clients. Overall, there are many compelling reasons why trustees should look to build family office services – and there’s no better time to start building them than now.