TECHNOLOGY TRAPS WEALTH MANAGERS MUST AVOID
BUILDING AN EFFECTIVE FAMILY OFFICE TECH STACK. A GUIDE FOR BUYING TECHNOLOGY PRODUCTS
Technology adoption varies greatly among family offices and institutions that work with them. Many organizations still rely on spreadsheets for pretty much everything they do; others have wholeheartedly embraced innovative tools to accomplish all manner of mission-critical tasks, including data reporting, investment analysis, and integrated planning. However, based on numerous conversations with organizations across the spectrum, many decision makers in the wealth management ecosystem face a common challenge when considering new technology: they often don’t have a clear understanding of the problems they’re solving for and how to go about the evaluation process. Unfortunately, this lack of clarity can be quite costly. In a Wall Street Journal report titled, “The Many Ways Companies Waste Money With Technology Spending”, James Anderson, a research vice president at Gartner, explained why the inefficient spending has only amplified in recent years: “With Covid, everyone’s seeing digital acceleration, but very few organizations are tracking what they’re getting in terms of business outcomes. They’re not using business metrics to influence investment. They’re doing what people tell them to do”. This article is designed to help you avoid the missteps that come from not understanding your organization’s problems and needs or using data points to inform your choices. Members of the Masttro team have sat on both sides of the table, having worked for family offices and related institutions before joining the leading provider of wealth data technology solutions. For this reason, we believe we are uniquely positioned to outline the smartest approach to building a tech stack. 1. STATUS ASSESSMENT Use the following questions to gain a genuine understanding of your current situation. You’re painting a broad sketch that you can subsequently fill in with more detail, with the intention of identifying what information you need to gather as you move forward: n What are your primary problems/needs/issues? n What are the secondary concerns? n What specific pain points is your organization experiencing
around these problems/issues/needs? n What technology are you currently using to handle the task(s)? n What type of service does the vendor provide? n What problem does the vendor not currently solve? n What do you want/need the new technology to do? n Who will the users be? n Who will use the new technology to perform their task? n Who will receive the work product? n What is your budget?
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n What is your go-to-market strategy across users and
stakeholders?
2. SCOPE DETERMINATION The purpose here is to clearly identify which elements of your business and operations you want the new technology to solve. Start with the pain points you identified in the first step, then use that list to guide conversations with various vendors. As you speak with different representatives, you’ll gain information about what is possible (perhaps there are products that address them all) and what is not (perhaps you will find that the best solution requires multiple products). In these conversations and others, you will want to include people in multiple roles throughout your organization, as they will each bring distinct knowledge of their area of interest. It is important to include, along with the decision makers, additional thought leaders such as accountants, investment