If your assets aren't visible, do they even exist?

One of my clients asked me to help them figure out how their assets were performing.

The problem was, they didn't know what their assets were.

Like, they never even wrote down what they bought in a word doc. Definitely not an Excel spreadsheet. So the project was combing through piles of sub docs and K-1s, logging into never used investor portals, emailing back office personnel.

Is was not pretty, and at the end of the day, there were probably some assets we never found, because they invested on a whim and were never or barely paid distributions.

I'm not talking a few hundred thousand dollars of assets either!

So, if a family wants to achieve visibility of assets, what can they do?

Luckily, now we have a lot of technology to help with this process.

The first product we tested was Addepar. It was interesting! The interface was slick, it broke things down by pro-rata ownership and trust structure, which is important for a family office. It was solid, and we almost signed up.

But then again, we realized we didn't have a proper general ledger/investment accounting solution either. So we investigated SEI Archway.

It was interesting, yet seemed a bit overwhelming, and maybe you needed an accountant to operate it (I am not sure that you do, but we got a bit nervous there, because we didn't have an accountant in house, nor a CPA that did books on the entire estate).

So, we looked at a reportant and accounting solution from a CPA firm geared toward family offices. It was solid enough, but it was so accounting focused that it stopped looking like a reporting solution, and was hard to track performance.

Next we investigated software created in house by some Wall Street wirehouse banks that we worked with. They demanded fees of AUM that were preposterous, so that was a non-starter.

All of these solutions required an employee to be constantly updating the data with cap calls, distributions, K-1 info, and new investment data. That's another $50K+ a year in salary, on top of the already very high software fees.

We ended up going with Tamarac and farming out the data entry and maintenance to a MFO, which was bundled with other services until it was almost free.

I'd love to hear any other success stories in the reporting world, but the solution is usually tough to make cost effective and user friendly. Please reach out if you have solved this problem yourself!