15 Mistakes That Family Offices Should Avoid in 2020

Here, we’ll focus on operational mistakes, office procedures, workflow, reporting, tools, staffing.

As we all know, running a family office requires careful management and daily portfolio oversight with an eye toward protecting privacy and ensuring account security. Office teams make quick decisions and work diligently to maintain updated records and reports while supporting the needs and priorities of each family.

Since 2008, we have worked closely with many family offices to help them streamline their operations, supplement their teams, and move financial data error-free from their portfolio accounting systems to their general ledgers.

When first working with a family office, we go through a checklist to help them identify where bottlenecks might exist in their office, and where simple changes might deliver the biggest positive impact to their daily operations. This checklist ends up being a useful tool to quickly gauge the scalability and resilience of the office to changing market conditions and pending growth.

We offer a version of this checklist below to help you potentially detect and correct internal issues that are an excessive demand on your resources (chiefly, team and time), and which might represent an opportunity for improved operations for the coming year.



Office disruptions happen, and they’ll continue to happen in an unpredictable manner. They cause delays and interruptions that can impact your service quality and even your reputation. Take steps to defend against staffing disruptions by implementing a safety cushion of experienced staff that can be brought in to get up and running quickly without breaking stride. This could take the form of 1099s that could be ramped up on demand—if they’re available at the time you need which is not always the case. 

But here, “outsourcing” is the preferred solution, which firms who’ve been impacted will swear by. Outsourcing provides access to a built-in experienced staff that can quickly step into your process and take over some of the workload to help you avoid true disruption. The experience and availability of this approach is your insurance policy against the unexpected.


Why are these checklist items? Because they’re indicators that the underlying technologies helping to drive your office are not up to the task of supporting your current needs—let alone your projected needs for the coming years. These are typical situations that we encounter in both small and (surprisingly) large family office firms. AUM size does not correlate here. It’s a measure of office tech maturity—and often the result of teams becoming familiar with certain ways to accomplish data management, then sticking with those ways far longer than they should. Almost every office goes through this at some level.

To speak specifically to these points, you would be right to be concerned about data quality. Unless you have systems that can continuously audit health and continuity, you run the risk of reporting on, and making decisions on, incomplete snapshots of account positions, investments, etc.

Relying on technologies that give full exposure to data, like Microsoft Excel, is a step in the right direction in terms of gaining full visibility, but a definite step in the wrong direction in terms of data management as it is too tolerant of user-error being introduced to the data. It takes unique engineering to produce robust spreadsheets with real-time data verification and cross-referencing—something not typically found in most family office workflows.

Exchanging private, sensitive family investment information via email is so completely wrong that it alone should prompt you to action. The risks here are far too great to avoid. If your family office is sharing files via email, please stop immediately and seek secure alternatives such as encrypted email providers, Office 365, Box, and Dropbox.

For larger system evaluations—due diligence is a must, but before signing on with a new vendor, it’s important to take a critical look at costs and benefits.  ROI isn’t always a guarantee and the cost savings may not be there when you factor in time and effort to implement a new system.  If you’re not ready for a one to two year implementation and the project fatigue that will be inflicted on your staff, consider other alternatives.  Often a supplemental tool can overlay within your existing environment, achieving improvements in operational efficiency at a fraction of the cost.  No one system is a silver bullet and we’ve yet to see a client walk away happy after changing systems.  Do your homework, talk to folks in your network or call us for references.  Make sure to research all available options before embarking on a systems overhaul.


A few of our family office clients must produce an array of unique reports for the family at period-end, each requiring custom data management, processing, calculation, filtering, etc. Depending on the number and complexity of these “special reports”, this can be quite time-consuming and error-prone. Managing it takes the key staff off-topic while they transform themselves each month from strategic accountants into tactical data processors. This white glove service for clients can become a dreaded monthly headache that drains energy from your team. 

Consider tools/technology here that can be configured to handle much of this type of unique data processing. Talk to firms that specialize in family office reporting requests who can point you toward solutions that can take over this effort.

Another point centers on unbalanced workflow and processes which can result in having to spend too much time in the wrong areas of reporting. Yes, it’s work that your key team members should be doing, but some minor efficiencies in workflow can reduce the amount of time required here. 

For example, changing reconciliations from month-end to weekly, or daily, can drastically reduce period-end workload. It also helps your team fix errors and discrepancies early and often which makes period-end reconciliation a breeze by comparison, as you’re almost continuously up-to-date. 

When working with our family office clients, we infuse a more constant/frequent reconciliation—mirroring our observation of the accounting world moving toward a continuous close process—potentially toward a day where there will be no official close to the books, just a continuous roll. 

Here, consider leaning on technology and services which can easily manage data transfer, management and reconciliation so your GL stays up-to-date.


When your accountants have turned into data entry specialists, it’s an indication that things might be out of balance. It’s important to make efficient use of your key staff—to use them for the skills and education they bring to the table, to take away tedious, time-consuming work and let them get back to focusing on strategic decision-making. If this sounds like your office, a warning—your team might be getting a bit burned out. Consider alternatives like additional hires or outsourcing.

These checklist items represent bottlenecks and poor use of your accountants’ time. These situations often surface when a data feed is not available, for example, and the only choice is to have your team update information manually. 

The obvious problem here is that you’re using expensive staff for work that a junior staff member could help do. This is not only costing you money, but it’s almost certainly wearing out your team. Simply ask around and you’ll likely hear the familiar groan when the topic of data processing or statement rekeying comes up. 

These can seem like complex issues to address, but there are solutions in the market, and companies who specialize in these areas, who can help. 

Inaction here may result in staff burnout, and ultimately turnover, which will introduce a new—and very unwanted—staffing emergency.


These checklist items, too, are very commonly found in family offices—large and small. In many cases, procedures exist as high-level workflows or notes that do not properly represent actions to take for all eventualities. In other words, they’re not comprehensive and do not accurately and completely represent a procedure to follow. Also, if they’re written at all, it’s in the vein of being a finished process going forward. 

This is a mistake. No procedure here should ever be thought of as “done”. They are fluid—living documents—and should therefore always evolve with the changing conditions. 

A procedure file that hasn’t been updated in a long time is a good indicator that it is likely not accurate, or the team is not pushing for efficiency and are doing things “the way it’s always been done”. 

If these checklist items sound familiar, there is a meeting you should hold as soon as possible to discuss this internally with your team and establish a process to update—and maintain updates to—your procedures and workflows. 

As an alternate, bring in a specialist company that can help you audit your procedures and make informed suggestions on how to strengthen them and maintain them as living documents going forward.


If at least a third of the above checklist items sound familiar to you—and could describe your firm—then you have an opportunity to explore some changes to your operations that could make a big impact to your team’s daily workload and period-end processing challenges. While things might not look broken because things are getting done, clients are getting their reports, details are being managed—we’ve found that under the surface, these things are happening at the expense of your own team’s employee satisfaction and frustration levels. An experienced team with knowledgeable, educated, capable staff members can accomplish quite a lot. But when they’re routinely tasked to do work that is more tactical, tedious, repetitive, and not up to the level of strategic thinking and decision-making of which they’re capable—burnout can set in.

The checklist above singles out areas of potential staff burnout and operational inefficiency that results in offices having larger workloads than necessary. In these situations, implementing new workflows, evaluating supporting technologies, and exploring potential outsourced partnerships can lead you to a dramatically-different workplace environment, with better morale and higher productivity.


No two family offices are alike. But they do share common challenges. To summarize the ones above, we’d choose operational efficiency. Making the best use of your staff, your resources, your technologies and your time are key initiatives that will be must-haves for 2020. With external pressures around pricing, speed of reporting, flexibility, expanding landscape of custodians, etc. family offices must respond by taking steps to implement new procedures and partner with strategic resources to step in quickly and deliver efficiency and uninterrupted expertise that allows the office to operate lean and stress free.

We’d like to hear from you. What issues are you dealing with that might offer some improved operations into 2020? We’d welcome a few minutes of your time to discuss and share detail on some of the ways we’re seeing family offices overcome these types of challenges. We can also introduce you to our services and discuss how we’re helping family offices restructure quickly to avoid the impact of these types of challenges. Let us know if you’re interested. And we wish you good luck with your office operational improvements into 2020 and beyond.