As family offices grow, the management of their operations becomes more time consuming and complex – a roadblock for further growth. To reduce complexity, family offices need to simplify their processes with digital technology. Altoo’s Wealth Platform is designed to make it happen.
21st-century wealth management: layers of complexity
Today, family offices process large amounts of data and information. A typical family office is likely to have multiple custodian banks for each family member linked to the office – and that’s just the immediate money side of the family office’s assets. Add in private equity, real estate, and passion investments – a family office could easily have hundreds of information sources linked to their assets under management.
Many of these sources might be based in the family office’s home market, making them more easily accessible. However, in today’s globalized world, it has become common to have assets spread across multiple jurisdictions, adding another level of complexity.
On the operational side, there are always multiple communication points. These include the immediate family members, the family office staff, third parties like product and service providers and advisors.
Another level of complexity is the likelihood of information asymmetries, whereby decision-makers often don’t have direct access to all relevant information.
Information asymmetries may also create a key person risk, meaning only one person has access to critical information. If that key person leaves, vital information might get lost. Inefficient use of technology often aggravates key person risks, as family offices still store information in error-prone spreadsheets or paper files – and some even rely on old-fashioned brain memory.
Solving the challenge: Altoo’s platform approach
“Family wealth is distributed across a wide range of asset classes and custodians with multiple stakeholders providing specialized services,” says Martin Stadler, CEO of Altoo.
“For family offices, managing wealth is becoming increasingly complex. The solution is a comprehensive digital home for their total bankable and non-bankable wealth and a way to collaborate with their stakeholders securely.”
Consequently, Altoo, based in Switzerland, launched in 2017 a digital Wealth Platform designed to reduce complexity for family wealth.
Altoo offers a solution to family offices and other advisors which enables a comprehensive and interactive overview of their total wealth and the ability to securely collaborate and communicate with their network of family members, trusted partners, and third-party providers.
Stadler says: “The Altoo Wealth Platform provides wealthy families with the transparency and control over their entire wealth, whether that is multiple bank relationships or information related to private equity, real estate or alike.”
Using Altoo’s secure technology makes life easier not only for asset owners but also for the family office employees. In turn, smooth collaboration between family offices and their principals also improves the trusted relationship between them.
Inside Altoo: How does it work?
The platform provides consolidation of bankable assets via Application Programming Interfaces (APIs). By using APIs, Altoo updates bankable wealth data daily which is essential for monitoring more volatile asset classes like equities.
However, for most non-bankable assets, there are no APIs available. Instead, advisors or other experts need to feed updated information into the system. Altoo allows these informed stakeholders to directly access the platform, enabling regular updates without compromising on security or data privacy.
A user can, for instance, provide his real estate advisor with restricted access to only real estate assets on the platform. The advisor can then regularly update valuations and upload all relevant documents linked to the respective real estate items. An internal messaging system allows for secure communication without having to rely on third-party email services which are not secure but still used extensively for exchanging sensitive information until today.
“Information security is part of our DNA and we are fully aware that our users trust us with sensitive data. Starting from Altoo’s very first day, relentless emphasis on security was the main design and decision-making factor,” says Stadler. “We keep development fully in-house and operate our private cloud on our hardware in a secure data centre domiciled in Switzerland.”
Stadler says: “When we built the technology, we worked closely with families focusing on their needs rather than developing another standard financial reporting tool. We built a digital home for the family’s wealth, enabling users not only to view but also manage their wealth together with their trusted stakeholders. Our success proves that this approach is right, and we keep in close touch with our clients to make sure we further develop the platform for them.”
“What the platform effectively does is enabling better decision making, greater efficiencies, and higher security,” adds Stadler.
“In return, it provides peace of mind for decision-makers and frees up more time for family offices to provide other value-added services.”