This past spring, as the new Trump administration began a global trade war, causing worry over volatile markets and their long-term economic impact, family offices were fixated on markets and their investment portfolios. But in recent months, a defiant, A.I.-enthused stock market helped reduce those anxieties. The S&P 500 climbed steadily back to a new all-time high and the index is up 13% this year.
And since family offices were less consumed by their portfolios, they seemed to repay attention to their technology and operations.
Family offices say their top operational risks are the volume of their manual processes and their overreliance on spreadsheets, according to an annual report released Thursday by RBC and Campden Wealth. More than one-third of offices said they were “concerned” about those risks and characterized their controls or processes as “weak.” Only 4% of offices reported being “unconcerned” and having strong processes in place.
Campden, a membership, events and research company focused on family offices, surveyed 317 offices globally from April through August for the report. The average wealth of the offices was $2 billion and their collective wealth was $285 billion. About half of the respondents were based in North America.
Spencer Weaver, who works for Campden and spoke with many of the respondents for the report, said that offices were clearly looking more inward and reevaluating themselves compared to last year.
“It goes beyond just seeing their investment expectations drop [compared to last year’s returns]. They were much more cautious than last year, possibly due to the timing of the survey coming during the tariff discussions and the market pullback there in April. But I think people were taking that more as an opportunity, not just to look at ‘how do I want to restructure my portfolio or de-risk that,’ but they were starting…to look at the general structure and the high-level topics,” Weaver told Modus.
To address the risks that come with reams of data being typed into Excel or Google Sheets, the report found that the most sought-after software was automated investment reporting and wealth aggregation platforms. The adoption rate of that software by offices had jumped to 69%, up from 46% last year.
That’s “a pretty sizable jump for a group that generally I would say is not the most tech savvy out there,” Weaver said. But some offices Weaver spoke to described a painful, routine task of gathering information — sometimes arriving in the mail — organizing it and then having to repackage and present it differently to various family members. Offices were “all-in” for something that could make that part of their lives easier, Weaver said.
At some large offices, money doesn’t seem to be a barrier to better operations. Technology and software are accounting for almost a quarter of their operating costs, Weaver said. “I think 10 years ago that would've been almost unheard of,” he said.
While there appears to be an uptick in the adoption of better technology, especially performance reporting and aggregation software, many family offices continue to operate with a combination of manual and automated systems because financial data can vary considerably, according to the RBC and Campden report.
Ethan Bonar, founder and CEO of CFO Family, a back-office services company, says offices have continued to update their technology and operations, but there is still much room for improvement.
“Family offices are making progress with technology adoption, but the real challenge is achieving true integration across disparate systems," Bonar said. "The desire to control what can be controlled — especially in uncertain markets — has pushed more groups to modernize, but there’s still a gap between adoption and fully realized efficiency.”
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Jobs
- Walton Enterprises is hiring an investment analyst in Bentonville, Arkansas. This investment office manages both family investments and foundation portfolios. Salary is $86,000 to $107,000, which sounds low, but they are looking for someone with 0-2 years of experience and the cost of living in Bentonville is lower than average.
- Contradict Capital, a family office in New York City, is hiring an investment analyst for its growing team. “This is a unique opportunity to gain exposure to both private-equity-style investing and hands-on operating work in small and mid-sized businesses,” according to the job post. Ideally, the analyst will have 1-3 years of investment banking or PE experience. It pays a $150,000 salary, plus bonus and equity opportunities.
- The OCIO Partners Capital is hiring a senior investment principal to join its team in Boston. The job pays $250,000 and the right person could be eligible for performance-based incentives and the profit share program.
- Northern Trust Wealth Management is still looking for a CIO.
- Crewe Advisors, a wealth management firm in Salt Lake City that also provides services to single-family offices, is hiring a CIO.
- Robinhood Ventures, the new venture capital firm within the trading company, is hiring a portfolio manager. The first fund will invest in a concentrated portfolio of companies across sectors and intends to hold them through an IPO and beyond. They want the PM to be based in Menlo Park, California, but are open to candidates based in New York City. This hire will be expected at one of the Robinhood offices four days per week. The job pays a salary of $345,000. The company will explain additional compensation and benefits to candidates it considers and engages with.
Other Stuff
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I'll be in...
- N.Y.C.
- Chicago, the week of October 27, for IceMiller’s Family Office Private Capital Forum. I'm doing a fireside chat with Noelle Laing, CIO of Builders Initiative. If you work for a family office and would like to attend, apply here.
- Atlanta on November 6 for Armanino’s Ignition: Family Office Innovation Summit. It’s a one-day, invite-only conference at the Porsche Experience Center, where a bunch of single-family offices are gathering for an A.I. workshop, some tech demonstrations by various companies, and to drive some sweet cars. I attended a similar Armanino event in L.A. last year, and it was great. If you have, or work for, a family office, apply to attend here.
