An excellent article entitled Family Offices Face Growing Squeeze by Charles Paikert in Financial Planning magazine addresses the talent troubles, capital needs, profitability problems and competitive threats that loom among the biggest concerns for family offices in the coming year.
One paragraph in particular captured my attention:
Rising costs stem from the need to spend more on technology, operations, regulation—and, of course talent. That spending is eroding profit margins, as are downward pressure on fees and “service creep”—the perceived need to offer high-end clients additional services they aren’t billed for. “If your fees are 100 percent asset-based, it’s very difficult to limit service creep,” says Tom Livergood, founder and chief executive of the Wheaton, Ill.-based Family Wealth Alliance.
The way I see it, an excellent solution to service creep is offering clients an a la carte menu of specialty services by trusted providers such as Archival Property Solutions (APS). Outsourcing such services protects a Family Office from assuming the fixed staffing expenses related to fulfilling special requests. Outsourcing also ensures that a client’s needs can be satisfied with a quality result from a reliable, on-demand source in a timely and professional manner.
What’s more, an APS private, secure and confidential digital catalog that includes photo images of a client’s tangible assets along with associated digital copies of receipts, appraisals, provenance and other important details could be branded by the Family Office with their name and logo while APS remains quietly behind the scenes providing ongoing administrative support.
But don’t just take my word for it. Click here to read the impartial viewpoint of Russ Alan Prince, a founder and the Executive Director of Private Wealth magazine and author of the Serious Money column on Forbes.com. Prince also recommends that Family Offices strategically outsource certain functions.
Indeed, offering unique specialty services could be a true differentiator that could go a long way toward attracting additional clients while helping Family Offices cope with competitive threats to their existing client roster and meeting profitability challenges. Ultimately, outsourcing such specialty services may enhance revenues instead of taking a bite out of profits.
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About Archival Property Solutions, LLC
Archival Property Solutions documents and catalogs the tangible assets of high-net-worth owners for their personal viewing pleasure and support of crucial Family Office and wealth management activities. Clients who have substantial and complex holdings in multiple locations can now keep their catalog of non-financial assets stored securely for private, confidential access via computer, tablet or phone. When maintained with current information, this confidential digital catalog can keep owners and their trusted advisors better informed, enabling them to stay current with professional service objectives and to plan for, protect against, cope with and recover from life’s unexpected events.
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