Why Your Family Office Needs a CRM
When family offices evaluate what they need in their tech stack, a CRM is often overlooked. That is completely understandable. After all, isn’t a Customer Relationship Management system used primarily for sales and marketing? Why would my family office need tools to help us with sales, which is irrelevant to our mission?
The answer is that a CRM can do much more than just help with sales. Within a family office, a CRM functions as a centralized operational platform for managing people, entities, documents, tasks, and workflows.
The right CRM can be the ideal central operating platform for managing ultra-high net worth (UHNW) family member relationships and their assets. It can knit together all the other pieces of the technology stack to provide a cohesive platform that efficiently serves both staff and family members.
The right CRM can be the tool that organizes all your information and allows you to automate many of the functions that are done today by manual processes using Excel and Word documents. And a bonus from having the right CRM is improved communication, including better insights into asset management and risk, better service levels for family members, and better reporting, compliance, and oversight for family office staff and management.
Rather than look at a CRM as an unnecessary sales tool, family offices should view a CRM as the one platform that can integrate, organize, automate, and communicate. Let’s look at each of these elements.
A CRM Can Serve as the Integration Hub
The technology stack for most family offices consists of a mixture or some or all of the following: email and calendar, document management system, portfolio management/reporting, and some type of accounting/general ledger system. It may also include a family portal, financial/estate planning tools, data aggregation services, OCR/AI statement ingestion, risk analytics, and rebalancing or other tools for liquid portfolio management.
Unfortunately, few, if any of these systems speak with each other or are able to share information. That disconnect results in information being entered twice or moving from system to system to perform workflows, and the complete inability to automate those workflows.
An alternative is to deploy a single system that attempts to cram all these functions together, resulting in having to settle for inferior functionality in many of those components.
The better alternative is to have a single platform that can efficiently integrate with the best-of-breed products for each of those functions. A CRM has the organizational structure and flexibility to accommodate these different information types and modern APIs that enable this type of integration.
Helping Organize Disparate Types of Information
One of the immediate benefits a family office can realize with an integrated CRM comes from improved organization. To visualize this, consider how easy it is for you now to see the following:
- All the family members by generation and immediate family with contact information or a family tree.
- All the entities, trusts, LLCs, foundations, etc., managed by the family office and the roles or positions filled by each family member or outside provider.
- All the documents related to each entity or asset.
- All the activity records, including emails, calls, and meetings, related to each of those entities, or assets, or family members.
- All the potential investments being followed in funds, private assets, or real estate.
- Loans and payments between trusts and family members.
This level of instant information access is easily available with a CRM that has been integrated with the primary sources of that information, eliminating information silos that trap key data in Excel spreadsheets, Word documents, or uncommunicative systems.
Integration and Organization Lead Directly to Automation
While the organization of these disparate information types in one system provides a first-level benefit, the real value comes from automation of common workflows and processes. Automation is simply not possible when data is tracked in Excel checklists or reports or systems that cannot share. Automation, however, can be built when that information is accessible in a single digital foundation, as with a CRM.
One example is the approval and processing of a distribution request. That typically involves emails going back and forth; the need to transition from system to system to access required information; a separate search for related documents; an involved process to obtain and document approvals; and a separate process to initiate that payment.
The automated version of that process with a CRM as operating platform would include the ability to collect the distribution request online with any related documentation and the inclusion of trust cash balances, market values, and past distribution totals as well as the distribution provision from the trust document. It would also have supporting documents available in the same interface, collect approvals electronically, provide compliance documentation of the approval process, and feed directly into payment initiation. One system. One process. No endless email chains.
Automation possibilities go far beyond distributions. Think about account opening, fund subscription documentation, family member meeting preparation, tax return prep and tracking, report production, bill payments, and other recurring processes that take up too much time and staffing due to lack of automation.
Better Communication Means Better Service and Less Risk
The byproduct of integration, organization, and automation is better communication. Family members benefit from improved service from faster turnaround on requests. Reporting becomes easier and is not reliant on pre-formatted reports that need to be programmed. Family office staff can easily see information on the assets they manage and track tasks that can be assigned to them or their team. Family office management gets better insights into what is happening across the organization.
Risk is reduced with the improved ability to set up assignment and record activities related to the fiduciary tasks surrounding each asset. It is further reduced with the ability to enforce and document compliance through workflows instead of Excel checklists.
The Final Word: A Smarter Way to Run the Family Office
A CRM is the central operating platform that ties together the systems, data, people, and processes required to manage complex, multi-generational wealth. By serving as the hub for integration, organization, automation, and communication, the right CRM enables family offices to work more efficiently, reduce risk, and deliver a higher standard of service to the families they support.
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WealthHub Solutions is a leading provider of CRM solutions for Family Offices, Trust Companies, and other Ultra-high Net Worth Fiduciaries. In addition to providing the ideal operating platform for Family Office administration, we pride ourselves on the level of customer service and ongoing support we provide to our clients, helping position WealthHub as a strategic partner for growth and continual process improvement over the long term. |