The time-consuming and complex nature of financial reporting is likely to trigger a "major exodus" in family offices outsourcing this duty - a move that would free up time and boost efficiency across the industry, Rob Fiore of Private Client Resources recently told Family Wealth Report.
According to a recent study by Family Office Exchange, an overwhelming 80 per cent of family offices provide their clients with a quarterly financial report, yet the task of doing so consumes almost a third of the average family office's time. Meanwhile, although paper remains as the preferred medium, as stated by 67 per cent of respondents, a growing number (21 per cent) are now sharing information electronically.
Speaking to this publication, Rob Fiore, president and chief executive of PCR, estimates that 80 per cent of wealth management businesses manage their own client reporting and associated aggregation internally, which he says is basically a "complex assemblage" of people, portfolio accounting software and third-party data providers.
Businesses are needlessly relying on Excel to generate reports which could be produced in a fraction of the time and at a lower cost via other methods, he says. But as outsourced private wealth providers continue to demonstrate their competitive advantages over in-house rivals, there will be a "rapid and significant" shift towards the use of specialists for client reporting and data aggregation, he says.
In recent years, the wealth management industry as a whole has faced an increase in compliance and related costs which also consume a hefty chunk of organizationsí time. And while various technologies claim to offer effective and cost-efficient solutions to address and comply with new standards, FOXís findings also demonstrated that offering "truly customized" reporting for each client remains a challenge.