BEST PRACTICES: DISTINGUISHING BETWEEN A TRUE FAMILY OFFICE SERVICE PROVIDER AND A MASS AFFLUENT/HNW/UHNW OPTION
Rockit® Solutions is a technology-enabled Global Family Office (GFO) solution provider focused on single and multi-family offices with unique needs. Given our DNA originated out of servicing the complex needs of the Rockefeller family office, we are one of the most experienced providers bringing together the diverse service and reporting needs of a family office.
We are frequently introduced to family office prospects looking for some “simple” combination of reporting, aggregation, and analysis. Often times, they indicate that they had already discounted other vendors due to a missing core functionality. Family offices are, by nature, bespoke operating entities, and anything but “simple”. This begs the question - shouldn’t providers share the same flexibility and attention to detail as their family office clients?
At present, there are dozens of vendors offering services in the greater “reporting” space and many do excellent work. Although reporting, aggregation, and analysis are definitely components of a true family office service offering, we like to tell our prospects that we are, in fact, in the business of insight, oversight, and control. While the difference might seem like a matter of semantics, by asking a series of questions, we can better understand the distinction between “simple” reporting, aggregation and analysis best suited for the mass affluent/HNW/UHNW investor and the inherently more comprehensive insight, oversight, and control.
- Analysis vs Insight – Analysis can be viewed as data points within a vacuum. Insight provides more granular information and provides context for decision-making.
ANALYSIS | INSIGHT | |
Intended client? | Mass Affluent/HNW/UHNW | Family Office |
Are investment decisions being made on a daily basis using the data provided? | Unlikely | Yes |
Do you require advanced analytics like IRR or MOIC for illiquid investments/specialty assets or metrics like volatility and Standard Deviation? | No | Yes |
Are you able to integrate the offering with other platforms within your tech stack to help with decision-making? | No | Yes |
- Aggregation vs Oversight – Basic aggregation can provide a consolidated summary of transactions, accounts, and holdings. Multi-bank, Multi-shore clients with substantial wealth require full transparency into their holdings at both a micro and macro level.
Aggregation | Oversight | |
Intended client? | Mass Affluent/HNW/UHNW | Family Office |
Do you work with multiple banks/custodians (both US and non-US)? | No | Yes |
Are any of your accounts denominated/do they settle in foreign currency? | Unlikely | Yes |
Are there quality controls involving human intervention in place to ensure data quality? | No | Yes |
- Reporting vs Control – Reporting can provide clients with a limited, basic output. Full control over a service offering allows for owners and their family office staff to view wealth exactly the way they wish to see it.
Reporting | Control | |
Intended client? | Mass Affluent/HNW/UHNW | Family Office |
Do you require the ability to track illiquid holding (real estate, PE, HF) beyond a line item with market value? | No | Yes |
Do you have control over how the relationship can be viewed (i.e. consolidate by beneficial owner, asset category, or at security level) | No | Yes |
Can you represent partnerships with a look through directly to the partners? | No | Yes |
True family offices, as bespoke operating entities, require built-out and fully customizable offerings. By being transparent about the level of complexity they require and asking simple screening questions, family office staff and wealth owners can save a great deal of time and effort in vetting potential vendors. Rockit Solutions was created within one of the first modern family offices 20+ years ago to solve for these challenges. To this day, we remain focused exclusively on insight, oversight, and control for family offices.