Why wealth management tech should be on your family office’s radar (and what to look for)

Welcome back to part two of this wealth management-focused blog series! Let’s start with a quick refresher of our previous post—Top inefficiencies wealth management professionals face and the tech and tactics that can help.

Previously, our expert, Chirag Nanavati, Managing Director at Asset Vantage, dug into the causes of common inefficiencies in family offices—offering insight and tips on how to solve them and why technology is key.

The fact remains that the high-net-worth (HNW) and ultra-high-net-worth (UHNW) landscapes demand agility and efficiency. To be successful, wealth management professionals need to adopt integrated solutions that deliver unprecedented time savings, on-demand access to data, and full visibility into financial activity.

Being part of his family office for years, and now leading the charge to deliver a premier performance reporting and general ledger platform, Nanavati has even more knowledge to share. Read on for his expert insights on why technology needs to be on your radar and what it takes to build a modern, automated technology ecosystem.

In this in-depth Q&A, Nanavati delves into timely topics such as technology integrations, APIs, and what to look for as you search for new technologies.

Q: What’s the relationship between family offices and technology?

A: It really depends on which generation is running things, according to Nanavati. Many legacy owners know that they need to transition to technology but are slow to move. If the next generation is starting to take over, however, the appetite to adopt is much stronger.

“The biggest (and most complex) wealth transfer in history, from Baby Boomers to the next generation, is about to happen and this will speed up the rate of adoption. The next gen doesn't want to do anything manually and they want mobile capabilities,” said Nanavati.

With the big wealth transfer beginning, the profession as a whole is in the early stages of adoption. This is why family office advisors need to put in the time to educate families on the immense value of using advanced, integrated technologies.

Q: What’s the current technology landscape in family offices?

A: In a few words: disjointed and misunderstood.

Many family offices and multi-family offices continue to operate within a non-integrated tech stack. When systems don’t “talk” to each other, it bars data synchronization and requires time-consuming manual work to reconcile accounts—a vast amount that often relies on spreadsheets, emails, physical documents, phone calls, and more.

Nanavati strongly advocates implementing a modern tech stack—one where systems integrate.

He stated that when apps don’t sync, “... the challenge is always having to reconcile each to see the bigger financial picture. This takes so much time, and you never really get an accurate, current picture because the process is bogged down with manual tasks. Ultimately, this means family offices don’t have a single source of truth especially during making major financial decisions.”

That’s a sizable issue when clients require real-time financial insight to make informed decisions about current and future investments.

“The goal is to integrate solutions so data syncs across systems and you can streamline such activity as tracking investments,” said Nanavati. “Modern wealth management solutions make it far easier to integrate.”

There is also a lack of clarity around what family offices need in terms of tech.

“Many offices think they need a big complicated system that is custom-built to solve efficiency problems,” explained Nanavati. “But it’s actually much easier. Asset Vantage created an integrated accounting and performance management solution and then opened up our APIs to plug into other common solutions. We are living within an off-the-shelf-solution, API-driven world.”

Integration is much simpler when vendors offer API integrations, which leads us to our next burning question.

Q. What’s an API and what does it mean to family offices?

A: In simple terms, an API (Application Programming Interface) serves as a software intermediary, allowing two applications to “talk” to each other. For example, BILL offers an API that supports integration with Asset Vantage—enabling accounts payable data from BILL to automatically sync with Asset Vantage.

Nanavati continues: “Asset Vantage is a post-transaction recordkeeping and analytics platform, meaning we don’t initiate transactions. With our API, BILL receives the invoices, moves them through the approval process, posts them, and then syncs that data with Asset Vantage within the correct entity and GL.”

As always, security is important.

“Asset Vantage offers end-to-end encrypted data flow,” Nanavati explains. “This, along with our additional layers of privacy and the strong API security offered by BILL, helps to protect the valuable information entrusted to family offices.

So then, what does this mean for family offices and multi-family offices? It means that full system automation, from invoice to performance metrics, can now be a reality. This can solve the issue of managing and reconciling data across disparate systems and offer peace of mind that data is accurate and in real time.

Q. What level of manual tasks still exist in family offices?

A: Despite advances in technology, family offices and multi-family offices are still fairly mired down in manual work. Not only does this require a lot of time, but it also consigns talented, top-notch employees to highly administrative tasks like tracking and monitoring manual tasks—a source of frustration for employees and the family offices that want to retain their talent.

“Liquid assets are still booked manually through PDF statements, one by one,” explained Nanavati. “From a taxation perspective, they also have to send a lot of data and statements out to tax attorneys. There’s a lot of manual bill pay still happening as well.”

According to Nanavati, the first step is adopting an integrated accounting and performance metrics solution. The next step is adopting and integrating a bill pay solution. Both can significantly boost efficiency by streamlining manual processes. Instead of juggling multiple spreadsheets, you have automated, synced systems.

The level of manual work that still exists in family offices most certainly needs to be addressed. Integrating technologies is the key to making progress—promising such outcomes as improved efficiency firm wide, decreased labor costs across roles and responsibilities, and the ability to deliver a rich client experience.

According to Nanavati, the first step is adopting an integrated accounting and performance metrics solution. The next step is adopting and integrating a bill pay solution. Both will significantly reduce manual work right out of the gate and help families and their advisors make better financial decisions.

- Chirag Nanavati, Managing Director, Asset Vantage


Q. What tech should be on the radar?

A: Looking to the future, technology upgrades should always be on your radar. Technology is the primary driver of enhanced workflows and productivity.

But what should you be looking out for?

As Nanavati stated earlier, there is no need for complex, customized systems. There are numerous off-the-shelf cloud-based solutions available complete with open APIs that support easy integration with many popular cloud solutions.

For firms that have not yet adopted an integrated accounting and performance management system, this should be on your radar. Having all this data in one system and in sync will save hours (even days) of time and significantly reduce manual tasks.

Also on your radar should be a bill pay app that offers an API to integrate with your core ecosystem. When these solutions are in place, what you have is a modern tech stack that supports real-time data access and automatic data synchronization. Your family office will run like a well-oiled machine.

“Keeping cash and investments in sync is very important. That’s why automating AP is a good place to start,” said Nanavati.

And let’s not forget the importance of security as you research technologies.

“Security must also be on the radar,” said Nanavati. “As you identify solutions, the level of security should be high on the list of questions asked.”

For example, solutions that offer the ability to set controls and restrict who can do what provide much-needed checks and balances that help combat fraud.

“Keeping cash and investments in sync is very important. That’s why automating AP is a good place to start.”

- Chirag Nanavati, Managing Director, Asset Vantage


How to Start with Tech Evaluations

Advancements in technology are continually changing the landscape of wealth management. Integrated solutions bolster time savings, accelerate service delivery, provide real-time access to data, and support a modern way of doing business.

With the next-generation of families coming up, it’s even more important to get the right technology in place to support the soon-to-come demand for convenience, mobility, and automation.

Take the next steps by learning more about the solutions discussed in this article. The more you know, the easier the transition will be. We recommend the following steps:

Originally published on the BILL blog

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Top inefficiencies wealth management professionals face and the tech and tactics that can help
Top inefficiencies wealth management professionals face and the tech and tactics that can help