Transparency is often spoken about as a necessity in organising and monitoring family wealth. However, this can be harder than expected, especially if a complex array of investments are involved, where data might not be readily available, or presentable in wealth reports.
The Altoo wealth aggregation platform has been designed to overcome this challenge to help improve decision-making by providing an intuitive digital overview of one’s wealth. Using a range of technology tools, Altoo goes beyond merely aggregating and reporting data, instead offering a unique digital family office experience for UHNW individuals and small family offices.
If they were using a multi-family office, they would need to wait for that information to be sent. It doesn’t allow for fast decision-making, which we are trying to solve.
“Our platform sits at the crossroad between fully fledged enterprise software (“portfolio management systems”) and ready-to-go plug-and-play solutions,” says Cosimo Violati, Head of Business Development at the Zug-based firm, founded in 2017. Indeed, its ease of use is central to supporting beneficial owners – the principals making investment decisions – in creating a wealth legacy.
Of course, there is nothing to stop someone establishing an institutional-quality family office, which comes with headcount and operational costs and is therefore expensive. Or, for that matter, using a multi-family office. The problem, then, is accessing a personalised system that provides a clear picture of one’s wealth.
“With Altoo, we are trying to provide a good compromise,” explains Violati. “Our average client has CHF100 million – it ranges from CHF20 million to more than CHF1 billion – and they want to have a full picture, within a click of a button, of what’s going on in their wealth portfolio. On Altoo, you can look at all of your fund positions and all of your custodians and compare expenses over the return of that fund. How much exposure do you have to specific banks, and within those banks, what assets do you own? Is it a lot of cash, securities etc?
“If they were using a multi-family office, they would need to wait for that information to be sent. It doesn’t allow for fast decision-making, which we are trying to solve.”
Bespoke wealth reports
Everything from realised and unrealised P&L, income, expenses, and inflows is presented to the user via a personalised dashboard. Users can build their own reports by slicing and dicing investments – for example, to determine one’s exposure to tech stocks within a broader equity portfolio. As well, look at bank expenses; how are they being charged over the course of the year, compared to other banking relationships used by the family?
“You can look at your wealth from different angles,” states Violati. He confirms that a new private equity module has recently been added to the platform to enable clients to view fund IRRs, fund distributions, J-curves, exits etc.
“Liquidity management is vital, so we’ve also added a future liquidity cash flow reporting function. You can add any investments onto the platform to monitor your liquidity over time; this is useful for monitoring capital calls, for instance. We also cover art, cars…pretty much any collectables or types of assets you can imagine.
“The aim is to help clients manage their lifestyle and their investments by always having a clear view of their wealth.”
Altoo users can also conduct transaction cost analysis on their portfolios to better understand the impact of transaction fees. This is achieved by considering all of the expenses to present a more accurate view of performance, with Violati noting: “Fees might be a small percentage (of the total investment), but over time they accrue and erode performance margins.”
Another important dashboard element allows users to track and monitor their asset class exposure over time easily. Having an immediate visual indicator on, say, real estate, which shows how much over or under-allocated one is, relative to a prescribed target allocation, is a further way of improving the speed of decision-making, something that any HNW individual is likely to welcome in today’s uncertain economic climate.
“If you go below or above that target, you’ll get notified on your phone (using our mobile app) and issued with a call to action. You can also set investment rules to receive alerts, i.e. maybe you want to be notified when a specific drawdown from an investment account has occurred,” states Violati.
A transparent wealth legacy
Whenever someone buys or sells stocks, bonds, fund commitments, property etc., all of the data sits within the platform’s private cloud environment. Users can easily review historical performance and build a digital wealth legacy for the family, incorporating every element of its investment portfolio.
A series of collaboration tools allow access rights to be given to third parties working with the family – i.e. lawyers and other external advisors – to support further the functional operation, including an internal communication tool. This helps avoid reliance on public email servers and other open communication channels where privacy is hard to control.
From a cost perspective, Altoo does not consider the size of the client in terms of net worth, but rather the number of banking relationships it has. The software comes with a yearly license fee, which can vary depending on the modules selected.
If the client has bank relationships, this implies an additional annual fee, the range of which is determined by factors like transaction frequency and the complexity of the client’s assets, such as standard cash accounts, stocks, and derivatives. The higher cost involved is down to the level of data that Altoo needs to reconcile and cleanse, something Violati refers to as “data hygiene”.
To ensure the highest data security standards are upheld, Altoo uses its own room in a secure data centre in Switzerland, and the platform operates within its own private cloud.
“We also use our own encryption modules and maintain everything. We don’t outsource anything. From client servicing to development, everything is done in-house,” concludes Violati.
With growing awareness of the importance of data-driven wealth insights, solutions such as Altoo offer an attractive alternative for small family offices standing at the crossroads of choice.