For this piece, we talk to April Rudin, CEO of The Rudin Group, who says family offices are popular because they deliver on being a personalised one-stop shop for the complex affairs of wealthy families. But successful delivery of that service relies heavily on the right technology, particularly when it comes to digital tools and data analytics to provide personalisation.

Please introduce yourself.
I founded my business, the Rudin Group, 15 years ago with the belief that technology was rapidly becoming the means to effect change within the wealth management industry.

Traditional wealth management brands did not embrace emerging trends in the industry and with changing client preferences, those brands were at risk of losing their appeal. It was clear they needed to do more to remain relevant for multiple generations and across multiple wealth brackets.

I felt that technology was one way in which wealth managers could change their operating model and appeal to the huge number of entrepreneurs. Millennials and Gen Z investors prefer to have more control over their own money and want to be involved in the decisions about how it is invested and managed. Many of these people have created their own wealth, and they want to manage it actively.

We are hearing a lot about the benefits of the family office model at the moment. Why is that?
Wealthy families have complex needs that span multiple jurisdictions and generations. Some family offices look after more than 100 people, and each of those clients have different wants and needs. The central benefit is that the family office can serve as a one-stop shop to help manage all the personal and business affairs of each family member, at all stages of their lives.

The concept of the family office has traditionally been most popular in Asia, but it is growing quickly elsewhere in the world. Centres like New York, London, and Switzerland have growing numbers of family offices. Post-pandemic, people want something that is mobile and global so that every family member can be reached, no matter where they are geographically.

If there has been a gap between what customers are looking for and what they are getting, how can wealth managers remedy that?
The family office model is all about service and the delivery of that service. It is so much more than the mechanics of financial advice and investing. Those wealthy enough to have a single-family office or to be part of a multi-family office have diverse needs and want help with issues like tax management, legal considerations, philanthropy, or multigenerational needs, as well as personal matters like managing holiday homes, yachts, or stays at luxury hotels.

In other words, they are looking for bespoke and personalised services to meet lifestyle needs in addition to their financial and legal matters. The job of the family office is to offer a whole-of-life service in a concierge package so that the family feels looked after in every area of their life.

How does technology come into that?
Traditionally, family offices have not been known for their technological prowess. Many of their operational needs have been run on a spreadsheet. But to deliver on the level of service and personalisation high-net-worth families expect today, the family offices must invest in the technology that is necessary to support it.

Digital tools and communication at the front end are one component, but equally important is the analytics and portfolio management in the middle and back office. They make sure that the family office can present a unified and cohesive picture to the client and pivot quickly, whenever the family requires. From an investment viewpoint, there is also the need to be able to access and record more esoteric investments like art, private markets, real estate, fine wine, and other things that are not always liquid. Direct investing and co-investing are also coming to the fore.

What about personalisation for each family member?
Personalisation is where good data use and management become critical because every service needs to be delivered in a high-touch way and with a high level of personalisation. The client interface is very dependent on the right information being fed to it.

 There needs to be a means to record and then interrogate data, so that the family office can deliver the very best recommendations. It is also important to know the best contact method and time to approach each family member with information and support services. The adviser needs to know what is likely to be of most interest to each family member in regard to investing, travelling, education, and so on. All of that is informed by what data can tell us and the patterns and preferences that analysis of the data can reveal.

The result is that the service can be tailored to each and every family member with an approach that is capable of being omni-channel and opti-channel so that each family member can choose which channel they want to receive the service or support through, for any need and at any given time.

How will all this look in five years’ time?
At the moment, we are seeing this sector develop. I do not see the popularity of the family office model slowing down. I do think that the multi-family office will gain increased traction as it is more accessible from a cost viewpoint. In addition, wealthy families are using the multi-family office model to get both the one-stop-shop element of the family office and the economies of scale and critical mass of expertise across many areas that a multi-family office affords. It is a double win.

If you would like to take part in our ‘TWM talks to…’ series, please get in touch with us at office@thewealthmosaic.com