December, 2024
Family offices today are juggling an increasingly complex set of systems to meet the evolving demands of multi-generational wealth holders. At FOTechHub 2024, a panel of experienced professionals from single family offices gathered to discuss the nuances of performance reporting, partnership accounting, client portals, and the promise (and pitfalls) of system integration.
The discussion was moderated by Theresa Clarkson, Solutions Architect at InfoGrate Wealth, who guided the conversation with insights from her dual role supporting both content management and systems design for complex family office environments.
Among the panelists was Danielle Klimek, Controller at Marron Capital, who brought a hands-on perspective from a "tiny but mighty" single family office managing robust performance, tax, and expense reporting across multiple systems. Brad Sacks, President of BS Global Investments, shared his experience building a family office from the ground up after a long entrepreneurial career. And Jake Beinecke, Vice President at Antaeus Enterprises, Inc., offered a second-generation family member's take on investment program oversight and technology strategy.
Transparency vs. Simplicity: Should You Surface Data to Family Members?
One of the most debated topics was whether to provide live dashboards and client-facing portals to family members.
Brad Sacks emphasized the importance of giving family members access to data: “I think transparency creates trust among everyone involved and allows not just family members but also financial managers and custodians to have access to our system and see what we’re seeing.” His team uses Private Wealth Systems and builds in safeguards like custodian access and reconciliation to ensure data accuracy.
Danielle Klimek explained that Marron Capital provides access to Addepar dashboards for both internal staff and clients: “We have clients logging into our Addepar portal every day. Some are literally multiple times a day.” To maintain trust in the numbers, the finance team performs input validation and high-level reviews: “Our CIO is great... he can spot things that look really weird, and we clean it up quickly.”
Jake Beinecke offered a contrasting view, citing a long-term, generational approach: “We don’t provide live data to our clients. We don’t use the Addepar client portal. We share quarterly statements... with a different portal—SharePoint.” He explained that high-frequency data doesn’t fit their mission to protect and grow purchasing power across generations, especially with a large allocation to private assets where valuations lag significantly.
Partnership Accounting: The Achilles' Heel of Integration
Partnership accounting proved to be a shared pain point.
Danielle discussed the layered challenges of side pockets and dynamic ownership: “We have entities with side pockets which essentially are mini partnerships all within the same legal entity. And then we have entities that are pro rata... the ownership is constantly changing.” She noted that Archway still plays a role, feeding ownership into Addepar to enable look-through capabilities.
Jake shared how Antaeus handles complexity through structure and policy: “We open up the partnerships once a year—you can put money in or take it out. So there’s one kind of break period where we have to change all these allocations.” This deliberate limitation allows his team to avoid the most error-prone situations.
Brad appreciated the flexibility in Private Wealth Systems for visualizing partnerships: “You can create the partnerships and then it maintains the slices over time. So as things change... that’s reflected and they see their pro rata share of whatever given fund.” However, like the others, he acknowledged that tax-level accounting still happens offline.
The Mirage of Integration: Proceed with Caution
All panelists agreed that integration is often oversold.
Danielle was clear: “I love integrations, but... you have to be 100% sure that they’re set up and functioning the way you expect them to function.” She described how early missteps with Bill.com and Sage taught her team to push vendors hard and validate everything: “You don’t want to be working in system two and then realize that nothing is going into system one.”
Brad added: “We’re not doing a ton of integration... most of the time we’re having to export the data and manipulate it in some form.” He stressed that the lack of real-time sync across systems limits the benefit of advertised integrations.
Jake admitted that integrations weren’t in play for his team: “We don’t generally use integrations... we’ve sort of solved that problem by just having clear delineations between what each system does.”
Key Takeaways
- Software gets you 80% there. Implementation and data discipline matter more than the platform.
- Know your team. A best-of-breed system only works if your team can manage multiple tools and integrations.
- Push vendors hard. Insist on seeing your real use cases—not demo data—before buying.
- Simplicity is a strategy. Avoid complexity in ownership structures where possible.
- Start small. Run new systems in one part of the office before expanding firmwide.
Final Word
There is no silver bullet for performance reporting or integration. As Danielle put it, “Software is another magic term, and people love to think that it’s going to revolutionize your lives... but you have to be that much more diligent that the data you’re putting into your software is good data.”
What unites high-performing offices is not the tech stack but the clarity of their operating philosophy and the discipline of their execution.
This article is based on a panel discussion at the FOTechHub 2024 Virtual Conference.