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Financial Planning > UHNW Client Services

Don't Serve Your UHNW Clients Like It's 1985

By Daniel Burke

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When searching for a new solution, advisors hear a common pitch from software providers: “Our technology frees you to focus on what you do best, managing relationships and growing your business.”

Many players in the fintech ecosystem tout the ease, simplicity and scalability of their technologies, allowing advisors to spend less time wrangling data and more time serving existing clients and looking for new ones.

But for advisors serving ultra-high-net-worth families, the promise of an easy button to manage the complex needs of multi-generational, taxable investors rings hollow.

Despite the incredible growth of sophisticated fintech software-as-a-service solutions, advisors are still commonly doing complex and custom work for UHNW families in Microsoft Excel, which was released in 1985. 

When we launched Callan Family Office, which serves more than 40 multi-generational families with an average portfolio of $100 million, we recognized that we had an opportunity to bridge  the ultra-high-net-worth technology gap. 

From a tech perspective, ultra-high-net-worth families are different from affluent or high-net-worth investors in two important ways.

First, they have ownership structures that span multiple generations, multiple investment managers and multiple custodians.

Second, they require individualized advice and implementation to ensure that investment and financial plans are coordinated to maximize outcomes on an after-tax basis. 

Clients’ Struggle

Software firms struggle to build profitable technology when the requirements vary so widely for each client, especially when the number of ultra-high-net-worth-focused firms like Callan Family Office is modest compared with the number of firms serving affluent and high-net-worth investors. 

One consequence of the UHNW technology gap is that clients struggle to get a clear view of their total investment portfolio in the context of their estate plan. The families we serve own public and private market assets, but also operating companies with shared ownership.

Much of this data must be integrated from disparate sources, including from the client or their family office staff. This requires a maze of operational workflows to collect, clean and connect client data in a secure and compliant way.

Without holistic and timely data, advisors can’t coordinate investment advice with estate planning, risk management, philanthropy, banking, family governance and other client objectives. Assets end up being managed in silos, and highly taxed clients may experience wash sales, short-term capital gains and other sources of tax drag during implementation.

Finding Solutions

Once client data is fully integrated, specialized tools sit on top of this foundation to crunch numbers, glean insights, fuel recommendations and report outcomes.

Here, fintech innovations have put powerful tools within reach of advisors and family offices — if they know how to use an application programming interface. 

Building an integrated platform of specialized SaaS tools can be expensive and requires either in-house data engineers or vendors and consultants to manage the necessary APIs, cloud infrastructure and security.

A cheaper and more popular choice is to rent an all-in-one technology platform. But these turnkey solutions often lack the degree of customization that UHNW clients demand, and a closed technology ecosystem can limit access to niche tools — especially those Excel spreadsheets that for years have powered custom analysis and reporting. 

When my partners and I decided to launch our firm, we were fortunate to have decades of experience working in ultra-high-net-worth technology, a blank slate with no legacy systems and the resources to build an API-first cloud platform.

Early in the build, we committed to owning and solving the problem of complexity and customization for our clients. No easy buttons. No shortcuts. Leveraging experience, vision and investment, we have solved the UHNW technology gap for Callan Family Office clients.

What Your Firm Can Do

How can other wealth management firms solve their gaps? 

First, they need a plan.

The firm’s leadership should have a clear vision for how their data, infrastructure and software — custodial data, aggregation tools, performance systems, portfolio management tools, risk and compliance tools, investor profiles, financial plans, CRMs, market and alternative investment data, and all other information on client goals and objectives — work together to enhance the advice and implementation of client investment strategies.

Second, they need to make substantial investments in process and technology.

Our first hires were technology specialists because we knew how important it was to build our services and operations on a solid tech foundation. And our technology team has integrated internally developed solutions alongside third-party software to help it execute on behalf of our clients. 

 Robert Frost famously said: “The only way out is through.”

As advisors to ultra-high-net-worth investors, we must use our experience and tech stack to meet clients’ expectations. As with all obstacles, the challenge itself makes us better, and advisors who take the technology gap head on will be positioned to bring together high tech and high touch to best serve their clients. 

Daniel Burke is an investment management partner at Callan Family Office, an independent wealth management firm serving ultra-high-net-worth families, foundations and institutions.  

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