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Top inefficiencies wealth management professionals face and the tech and tactics that can help

Top inefficiencies wealth management professionals face and the tech and tactics that can help

Michael Davis, Contributing writer, BILL
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Wealth management pros know better than anyone that real-time, accurate data is at the heart of a well-run and successful family office. And that means that the high-net-worth (HNW) landscape demands agility and efficiency. It’s a world where proper cash flow management and financial forecasting can’t wait for month-end reporting. Here, liquidity demands don’t defer to investment timelines. It’s a world where access to on-demand data—all day, every day—is a necessity.

Chirag Nanavati, Managing Director at Asset Vantage, a premier performance reporting and general ledger platform for HNW and UHNW clients, lives and breathes the needs, challenges, and demands of the wealth management world every day. Before founding Asset Vantage, both Sunil Dalal and Chirag Nanavati ran their family offices, where they realized the great need for an integrated accounting and investment platform to get the true picture of total family wealth for financial decision making.

“The global financial crisis of 2008/2009 quickly made us realize that we had to have access to data in real time. We could no longer operate using spreadsheets, reports, and the data in people’s heads. We needed a system that pulled all information together in one platform,” according to Nanavati.

Soon after starting their search for Family Office tech, both Dalal and Nanavati realized that there was no solution that solved this issue for the HNW and UHNW market. As a result, Asset Vantage was born.

With decades of experience under their belt, both Dalal and Nanavati deeply understand the inefficiencies that continue to plague family offices and multi-family offices. In this in-depth Q&A, Nanavati identifies these challenges, offers expert insight on technology that can help and tactics that work, and details the opportunity for family offices to enhance their service offerings (and bolster revenue) with bill pay.

Q: What is the most common cause of inefficiency?

A: Lack of process standardization is central to office-wide inefficiencies, according to Nanavati. This occurs when owners don’t think of the family office as a business, but rather as processes happening in the background.

He explained: “When you don’t run your family office like an organized business, processes become people-dependent. This means that processes are dictated by whoever is handling the work, instead of all staff following a defined and standardized workflow. Lack of standardization also feeds an ongoing need for manual work.”

When workflow is people-dependent, it causes immense disruption. For example, consider when people move to a new team, or a new employee is hired to fill a specific role. With no standardized processes in place, it leaves it up to the individual to reinvent the workflow wheel, meaning that everyone continues to process work in an undefined and personalized manner. This can be a vicious cycle to break.

The key to overcoming this pain point is to establish formalized processes for all areas of operations. This way, no matter who takes on the work, everyone adheres to the same standardized workflow. To achieve this, family offices must first change their mindset and make an intentional decision to function like a business.

“Standardization is the key to elevating efficiency across the office,” said Nanavati.

“When you don’t run your family office like an organized business, processes become people-dependent. This means that processes are dictated by whoever is handling the work, instead of all staff following a defined and standardized workflow.” - Chirag Nanavati, Managing Director, Asset Vantage
A portrait of Chirag Nanavati

Q: How does lack of technology integration affect efficiency?

A: Inefficiency is further fueled when family offices and multi-family offices have disparate solutions in place. For example, a system for accounting and another for investment.

“These systems are never in sync, so the challenge is always having to reconcile each to see the bigger financial picture and for taxation purposes,” said Nanavati. “This takes so much time, and you never really get an accurate, current picture because the process is bogged down with manual tasks.”

Ultimately, this translates to having no single source of truth. According to Nanavati, to get to this, you have to work within an integrated accounting and investment platform. An integrated system helps eliminate manual reconciliation of data across disparate systems, reduces the need for additional tools like spreadsheets, and ensures real-time views of clients’ financial health.

For all these reasons, Asset Vantage was built to offer a purpose-built solution that provides a consolidated view of a family’s entire net worth within a single application.

Q: What are common challenges family offices and multi-family offices are facing when it comes to bill pay?

A: Many family offices and multi-family offices still lean heavily on manual and paper-heavy processes to support bill pay. In large part, this is driven by how their clients work. You may have clients who aren’t comfortable working online or those that are online but still prefer to use paper checks. Then there are the clients who continue to do things the way they’ve always been done simply because no one has ever shown them a better way. Sound familiar?

“We have many long-term clients who don’t trust online banking, or even if they do, they still write checks. There’s a lot of manual work from the time the bill comes in, to posting it to the account, to approval and sign off and finally mailing out checks,” explained Nanavati.

You also have to consider that data then needs to be entered into the accounting system. So, when looking at the process end to end, you’ve got tons of manual work happening. This all adds up to extreme inefficiency and more opportunities for human errors.

Now consider the multiple tax entities that operate within a family and the number of bank accounts. This leads family members to maintain multiple spreadsheets in an effort to manage bill paying—which only further complicates processes.

How can you overcome this issue?

The answer is pretty simple: Adopt a cloud-based bill pay solution that integrates with your accounting and investment platform. For example, BILL supports a fully automated, streamlined bill pay workflow and integrates with Asset Vantage.

“When you look at a fully integrated solution that handles both wealth management and bill pay activities, you start to see how easy it can be to automate processes from start to finish. Technology is such a critical component of running a highly efficient office,” said Nanavati.

“When you look at a fully integrated solution that handles both wealth management and bill pay activities, you start to see how easy it can be to automate processes from start to finish.” - Chirag Nanavati, Managing Director, Asset Vantage

Q: Are you seeing more family offices move to automation for bill pay?

A: Yes. And the pace of adoption is picking up steadily.

“In our customer base, we still have a lot of customers who are working manually or directly online through their banks, but we are starting to see customers adopt automated bill pay solutions like BILL,” explained Nanavati. “They’re quickly seeing the benefits for both their offices and their clients. Multi-family offices often see it as a competitive differentiator since it provides transparency, reporting, and automated reminders.”

To increase adoption among clients, it’s important to introduce a new and modern way of working—one that is automated, streamlined, and online—while also expressing the value. As your client’s trusted wealth management advisor, take the time to educate your client base on the value of automating bill pay and how it can make their lives easier.

Q: What results are your clients (and their UHNW clients) seeing?

A: The value of automating bill pay extends to both clients and family offices.

Automation removes the headache of manual tasks (like signing paper checks) and the need to maintain and manage complex data in spreadsheets. It also helps reduce the risk of error—such as making payments from the wrong account.

“For families with complex wealth, there are often multiple accounts like trusts or investment companies that own the assets. Bills can get paid out of any one of these entities. Without automation, it’s hard to reconcile which account bills get paid out of or if a bill was paid from the correct account. It becomes a massively time-consuming exercise for the client to keep all this straight,” Nanavati stated.

Within an automated bill pay solution, once payments are approved, clients have a clear audit trail of activity. This helps ensure that payments are booked in the accounting system properly and paid from the right account. Visibility into the books is a big plus for clients—especially when it comes without all the manual work.

There’s also the value of timely data. An automated system is far more agile, allowing wealth management professionals to provide clients with just-in-time financial information that informs better investment decisions and can improve their financial standing.

For the family office, the same benefits apply: elimination of manual tasks, immense time savings, and full visibility into the data. It also frees professionals to work on higher-value services and the firm to grow its bill pay offering without adding more staff.

Nanavati also believes that bill pay increases the sticky factor.Bill pay is a very sticky service because once you're in the personal data to that level, it makes the family office that much tighter with the client.”

Working within an advanced system elevates security as well.

Nanavati explained: “Within BILL, you can set controls so that only the right people have access to move money. Each activity in the system is tracked and auditable. Plus, the money is paid from a BILL clearing account, which can lower the potential for fraud.”

“Within BILL, you can set controls so that only the right people have access to move money. Each activity in the system is tracked and auditable. Plus, the money is paid from a BILL clearing account, which can lower the potential for fraud.” - Chirag Nanavati, Managing Director, Asset Vantage

The time is now …

For years, wealth management offices have followed traditional approaches to operations—approaches that come with manual tasks. And with manual tasks comes great inefficiency.

With integrated solutions like Asset Vantage and BILL, the HNW and UHNW world can start to transition away from time-draining, complicated workflows to automated satisfaction. This also enables family offices and multi-family offices to enhance client service offerings with bill pay—while enjoying a lucrative new revenue stream and increasing client adherence.

As new generations of families come up, moving to advanced technology is critical. The next generation demands convenience via online workflows and mobile options. So, the time is now. Making the move to fully automated systems provides a long list of benefits as well as prepares you for the demands of a growing tech-savvy client base.

Be sure to look for part two of this blog series, where Nanavati digs deeper into the expanding role of technology and why tech upgrades need to be on your radar.

To learn more about how BILL can help your wealth management practice and clients:

Michael Davis, Contributing writer, BILL

Michael specializes in helping businesses optimize financial operations by staying up-to-date with industry trends and translating insights into real-world applications. With expertise in AP, cash flow, and fintech, Michael breaks down complex topics to help businesses continue to grow.

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