“The future doesn’t have to be dystopian,” Cole said. Recent years have seen a surge in the launch of “robo”-style wealth management houses. Technology has helped to drive the move in investment away from certain forms of active management towards more passive approaches, particularly in the more efficient and liquid market areas, he said.

But for clients with more complex wealth management needs, what's needed is a combination of highly qualified human advisors equipped with cutting-edge technology.

A challenge for clients is how to select the best digital offering, he said. The advisors and firms that will be most successful in the future are those that will do the heavy lifting for clients in identifying the technologies that will best benefit them and their unique situations. 

Another big shift that touches on how technology works in wealth management is what happens when business owners sell their firms and try to figure out how to invest that money. Cole describes this as a move from “entrepreneurs” to “capitalpreneurs”.

Cole’s colleague, Nimesh Patel, chief technology officer and chief operating officer at Cresset, showed the audience a bewildering array of fintech companies, illustrating the challenge for family offices and other wealth houses in making wise tech choices. There are two broad tests: efficiency in choosing good tech solutions and delivering a good client experience, he said. The firms that will win will do both. 

First panel
The first panel discussion focused on the theme of “lessons learned and best practices in making a business case, buying and implementation”. Panelists were Howard Geller, principal, strategic consultant at Hudson Peak Group; Stephanie Notarianni, managing director, operations and technology, at Pitcairn; Ted Argus, senior manager, technology implementation consulting at SEI Archway, and Sergei Bourlatskii, chief executive, Ananta Family Office.

“Single family offices may be small operationally but have substantial assets. If you are using Excel and QuickBooks, it’s time for an upgrade,” Geller said, kicking off the discussion about the approach that wealth managers should take in buying and assessing technology. 

“There are plenty of options out there…they are easy enough to use…even if you are a small office you can use software-as-a-service. If you can fix your process you move on to other things,” he said. 

“For some family offices it can pay for itself almost immediately,” he said. However, with some firms the conversation sometimes comes down to how large a check they have to write for a particular technology and not how this solves the reporting problems, he added.

Argus talked about technology use, how considerations change depending on whether the issue is operational or investment issues. On the investment side, for example, a family office will want to know what its overall investment exposures are.

“Family offices are spending more time on creating reports and that’s not a good thing….we should not always be populating reports,” he said. 

Notarianni pointed to the “opportunity costs” that arise when firms delay or bypass technology upgrades. “Consider the cost of not making an upgrade,” she said. She later urged the audience to over-estimate the time-frame for implementing a new technology to create wiggle room to deal with inevitable delays and hitches. Also, she said, while there will be difficult conversations with vendors at times, it’s best to avoid being antagonistic since you need to maintain a working relationship.”

Bourlatskii, asked about the “beauty parade” process in assessing vendors, and said that a wealth management must firm spend time defining what it wants. Then it can draw up shortlists and look for demos. It is also important in deciding on technology to manage expectations intelligently, he said. 

Second panel
In the next panel speakers addressed the theme of “The GDPR effect on US families, advisors and institutions”. They examined how European Union legislation about protecting individuals’ data could also affect US firms that interact with EU citizens in any way. Panelists were April Rudin, president, the Rudin Group; Bob Miller, chief executive of Private Client Resources; Thomas DeMayo, principal, cyber-risk management at PKF O’Connor Davies, and Ruth Calaman, general counsel and chief compliance officer, Evercore Wealth Management.

Panel moderator April Rudin asked whether developments such as GDPR and possible US versions could bring firms “closer to the client”. 

GDPR is “a wake-up call” for the wealth industry, DeMayo said, arguing that for a long time firms have collected client data and not considered what the implications are. He said that any US-based business that deals with European Union-based clients will be under the GDPR net and need to be aware of its provisions.  

“To me, GDPR means accountability,” Calaman said. The EU legislation shifts the focus around data from the institution to the individual, Calaman continued. “You have to take a deep dive into where the clients are,” she said.

Regardless of whether GDPR-style rules are enacted across the US, practitioners should adopt best-practice around handling client data in any event because it is both right and smart, Miller said. “Let’s start actually acting like we care about privacy,” he continued. 

A key point about GDPR and similar rules is that the organization only collects the data it needs for its business, and nothing more, Miller said. 

Calaman said that although we may be able to tell the computer not to track “cookies” while we travel the internet, there isn’t an “unshare” button we can press to redact all the potentially embarrassing or compromising material that has been put on social media and other places. “The idea about the `right to be forgotten’ is a new one for the US” she said.

Third panel
The third panel discussion looked at the theme of “The Holy Grail: Is a truly integrated technology platform possible”

Speakers at this were Tania Neild, chief executive of InfoGrate; Carol Kaufman, founder and chief executive, Alternatives TLC; Deb Bailey, consultant, technology coordinator and project manager, Gresham Partners; Paul Hoffman, principal of the St Louis Trust Company, and Jennifer Moore, family office controller, HoltCat Family Office.

Asked if a perfect solution exists for implementing technology, there is some worth in adopting a sort of “Meyers Briggs” personality test, Neild suggested to her fellow panellists. Two sample questions to ask, she said, is how much trust over control are you willing to take with the different types of vendors or would you like a more flexible, but complex platform over a simpler, but more standardized, one.  It is all trade-offs, and you are looking for the trade-offs that work for you. Even if an SFO is structured as a non-profit entity, it should also consider what the returns on its technology investments are.

Several of the panelists joked that they shared the common experience of acquiring technology, made mistakes and ended up asking for Neild’s help in making smarter decisions. 

Moore discussed about how family offices crave being able to get past the chore of manually entering data; she was struck by the complexity of her family office during her transition away from QuickBooks with the number of intercompany items that had to be reconciled and identified to integrate to a new platform. The amount of time it took to prepare the data to move was a surprise so that the end result of combined reporting could be easily achieved on the new platform.

Bailey also reflected on the sheer complexity of her business and how technology must be used to cope with that. She said that balancing control and flexibility weighed against standard solutions, and that at the time she implemented their solution, standard systems did not meet the requirements.

On a positive line, “data is a lot more accessible….that is a huge thing”, Hoffman said. 

Outsourcing functions is essential because “we don’t have the scale and resources to do what they do,” Hoffman continued. 

“The theme here,” Kaufman said in summing up, “Is don’t try to do it yourself.” There are many things to think about, incorporate and then integrate to get to the right solution for a company.  It takes an expert to determine the best approach and steer the effort, navigating the team toward a successful implementation, she said.

Following the presentation of the FundCount report, produced in conjunction with Family Wealth Report , there was a fourth and final panel discussion on the question of “How the next generation of family offices will win on technology.

Panellists were Seth Brotman, chief executive of Canoe Intelligence; Tricia Haskins, VP, digital strategy and platform consulting at Fidelity Institutional; Darren Berkowicz, MD, SS&C GlobalOp Fund Services at SS&C GlobeOp, and Jonathan Hudacko, chief executive at Just Invest. This panel was moderated by Douglas Fritz, founder and president, F2 Strategy.

Brotman talked of how SFOs want technology for functions such as handling investment and also to help families stay on track with their values. Technology should also be used to deal with some of the pain points in running such entities. There can be some issues that come with the availability of instant information, however, such as for illiquid asset classes, he said. “I think the ability to pick up your phone and get wealth information instantaneously has made us all a bit spoiled,” he said. 

Some single family offices are using technology in order to achieve the range and scale of operations that are usually more associated with multi-family offices, Berkowicz said. 

A big use and advantage of a positive technology system is delivering information to family offices and clients “on the fly” via mobile and related channels, Berkowicz. 

“We are also constantly looking at ways to make paper exchanges paperless,” he said.

Haskins addressed the constraints that family offices must recognize when understanding the kind of information they can reasonably expect to get. “Single family offices investing in alternative investments may have certain challenges streamlining processes when the data is delayed or manually updated she said. 

A member of the audience suggested that the supposed problem of frictional costs in wealth management can be seen more positively as there is a need for people to check information and decisions. 

Hudacko talked about issues such as the trend towards impact investing and adjusting systems to take account of this phenomenon. “”In the political world there is a lot of angst right now…there are not a lot of good outcomes and one solution to that is through investment.”

He challenged the choice that is often presented that impact investing requires sacrificing returns. “You don’t have to do so,” he said. 

On other current and future trends, Hudacko said: “If you want to stay viable then prepare for the next generation.”

Haskins added: “Have a curious culture and be open to what is new.”

The following sponsors and exhibitors supported the event: AltaReturn; Datafaction; F2 Strategy; IR First Rate; FundCount; Just Invest; PKF O’Connor Davies; PCR; Private Wealth Systems; RedBlack; SEI Archway; SS&C, and the Rudin Group.