Aug 1, 2005 12:00 PM

By Jon Carroll, managing director, Family Office Metrics, LLC, New York

Management's highest priority is profitability¹ and profits depend mostly on pricing², according to two recent studies of the multi-family office industry. Good pricing is principally a function of the internal costs of labor, capital, and technology. Currently, many multi-family offices (MFOs) consider the short supply of qualified labor as their primary concern.³ Similarly, single-family office (SFO) executives have to contend with the short supply of qualified personnel while they must efficiently deliver quality service to keep their family owners satisfied. These labor concerns are long-term problems that need long-term solutions. One solution is to improve labor productivity by increasing technology use. By investing in back office technology, SFO's service quality increases, and MFOs improve their profitability.

The demand for back office technology to service high-net-worth clients is increasing⁴ as the number of high-net-worth families has grown.⁵ But many MFOs and financial institutions also are working to satisfy demand from less wealthy clients with a scaled down family office offering. Fortunately, there are a number of suppliers — some well known and some new entrants — that want to satisfy the need of family offices for back office delivery systems. At one end of the spectrum, some high-end providers are creating “lite” versions of their fully integrated back office solution in order to move downstream.⁶ At the other end, some mass-market providers are moving upstream by enhancing their offering to appeal to the high-end client.⁷

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Estate Tax	Donor Advised Funds
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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

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2011 Trust Glossary

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50 Years Ago This Month

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50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

Conrad Teitell's Guide to Tax Benefits For Charitable Gifts

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