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BLOG. 2 min read

Private Market Operational Challenges for Family Offices

We recently sat down with several experts as part of our "Family Offices: A New Era of Growth" webinar to discuss family offices, the generational and technology challenges they face, and how they can use outsourcing to address those challenges. The family office industry has been impacted by numerous factors over the past several years—from the recent increase in private markets to the looming “Great Wealth Transfer” in which Millennials are positioned to inherit significant wealth from their boomer family members.

Historically, family offices have relied on public or liquid investments, which have their own processes and technology requirements. As family offices join the larger shift towards private markets, they will need to adjust how they handle data, reporting and other aspects of those asset classes. As small companies, family offices often do not have the resources to dedicate a department to a single asset class.

Outsourcing or co-sourcing is an effective way to bring in the type of expertise needed to enter new asset classes without increasing the overhead of the family office. But outsourcing can be so much more than asset classes. Legal is a common department to outsource, with 73% of family offices reporting they outsource their legal, while 60% report outsourcing their IT infrastructure and 47% report outsourcing risk.

Family offices must also consider generational preferences within the families they serve. While ESG has been increasingly popular across generations, it is even more popular among younger generations. Younger generations also expect faster reporting, having become accustomed to instantly having information available to them in other areas of their lives. As this younger generation gets more involved in the family’s wealth decisions, they want enhanced reporting. Outsourcing is an effective way to achieve the level of speed and detail of the reporting that younger family members expect.

Watch the full "Family Offices: A New Era of Growth" webinar to learn more about the family office shift toward private markets, the challenges that come with that shift and how outsourcing can help.

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