The role of tech

Family offices are looking to both technological and human solutions to bolster their risk management processes. Nealy half (48%) plan to upgrade technology to strengthen risk capabilities over the next 12 months. Furthermore, a fifth (19%) rank this as their number one priority. 

The emphasis on technology upgrades suggests that current risk management technologies are obsolete. It also implies that some family offices see technology as a quick fix or magic bullet to address a variety of risk management issues, instead of focusing on human capital development and process improvement. Rather than serving as a one-size-fits-all solution, technology is best used to fill specific gaps.

Most family offices recognize the need to seek external human assistance. More than two in five (43%) plan to strengthen capabilities by conferring with peers, while 38% are looking to use vendors/consultants and other external solutions. About a third (35%) intend to bring in outside professionals to cover gaps and evaluate risks.

In addition, there is less emphasis on refining internal skillsets. Less than three in 10 plan to strengthen training programs for staff (28%) or implement regular risk assessments and audits (28%). Alarmingly, only about a fifth intend to build incident response plans (23%) and conduct comprehensive family risk audits (20%).

Family offices established more than a decade ago are more likely to use vendors/consultants and other external solutions than offices established in the last decade (39% vs. 33%). This indicates a greater willingness among mature offices to seek outside assistance.

Looking at organization type, more SFOs than MFOs plan to confer with peers and bring in outside professionals (46% vs. 36% and 36% vs. 29%, respectively).