Family office services: Rising demand brings new opportunities

Many firms today are taking a closer look at family office-focused financial planning and management opportunities as demand for these services grows. According to Accounting Today’s 2023 Top 100 firms survey, 60% of respondents reported increased demand for “succession planning/family office.”

Family office services can cover a spectrum of financial planning and management needs starting with accounting, financial and tax services, and extending to areas such as estate planning, cash management, risk management and asset oversight or management. For client advisory services (CAS) practices seeking to evolve and expand through a verticalized approach, family office services present an excellent opportunity.

During CPA.com’s recent webinar on this topic, leaders from top firms and technology providers identified three primary trends contributing to this growing demand:

• Generational shifts: As baby boomers age and transfer more of their wealth to younger generations, demand for succession planning and family-oriented advisory services will continue to rise.
• Increasing financial complexity: The high-net-worth families that typically require family services are often engaging in more complex financial arrangements than they have in the past. From private equity and venture capital to real estate, cryptocurrencies and beyond, the diversity of investment vehicles expands the need for professional guidance.
• Talent crunch: Just like businesses across so many industries, including the accounting profession, families that have relied on their own trusted advisors for years are experiencing a shortage in qualified talent.

These trends show no signs of relenting any time soon – if anything, they are likely to grow stronger. That’s why now is a good time for firms to assess the family office opportunity.

CAS at the controls
Many firms are gearing up their CAS practices to deliver specialized services to more clients. In response to these trends, CAS practices are well positioned to pull together a wide range of firm capabilities, as well as coordinating with external providers, to support an equally wide range of client needs. For Irfan Dossani, CAAS Partner in Charge at Whitley Penn, that means “our family offices are driven more on the CAS side – we look at it as a kind of partnership between CAS and the client’s wealth managers, estate planning attorneys, banks, our own tax professionals and others.”

Although some of these professionals may come from outside the firm, all are focused on collaborating in support of the family’s overarching strategy, accounting for issues such as their investment values, legacy considerations and more. Meanwhile, the CAS practice provides supporting back-office capabilities and manages the data, working with other parties to use the data to inform strategy and planning. CAS provides the connective tissue – processes and technology in particular – to bring these parties together in an efficient and effective manner.

Creating new opportunities with technology advances
Even among family offices long accustomed to one-on-one, white glove service from a dedicated controller, there is a growing openness to a heavier reliance on technology. After all, as consumers, these clients experience the benefits of technology every day, in large and small ways. And as younger generations take the reins from older family members, they expect to see technology in every aspect of their financial lives. For them, it’s expected of a modern, sophisticated family office.

How automation and integration capabilities help family offices
Automation and integration (connecting disparate systems used by clients, firms and third parties) are some of the most compelling aspects of the latest accounting and finance technology used to support family offices, creating advantages not only for clients, but also for firms looking to do more with less.

• Centralized client communications and deliverables: One place for family offices to access all the information they need, when they need it.
• Uncover insights: Greater access to more data, combined with intentional and focused integration among systems, opens the door to advanced insights.
• Alleviate staffing challenges: Create more capacity for existing staff and gain a competitive advantage in recruiting new staff who are seeking a forward-thinking, technology-enabled practice.
• Eliminate manual data entry: When staff can automate routine tasks such as data entry, they can spend more time on higher value, advisory-level activities that clients increasingly expect.
• Expand client relationships and revenue potential: As firms apply new technologies in innovative ways, many will uncover ways to expand client relationships and revenue streams with their family office clients.

What does it look like to implement this type of technology in practice? Firms using Sage Intacct, for example, are able to integrate financial and non-financial data from many different sources to create insight-rich reporting dashboards for clients. And automation capabilities from BILL dramatically reduce the amount of manual work required in client bill pay services, while also increasing accuracy.

Take a deeper dive into this topic
For a deeper dive in how your CAS practice can add value to family office clients, watch the recent webinar: “Delivering more impact and value for family office clients through an integrated tech stack.”