Family offices, responsible for managing the vast and complex financial affairs of high-net-worth individuals, face an ongoing challenge: how to efficiently report financials and net worth to their principals. For many, the current process of gathering, consolidating, and reporting financial data takes an inordinate amount of time, is done infrequently, and lacks the real-time insights needed to make informed, timely decisions.
The difficulties in reporting financials to principals aren’t just about the time it takes; it’s about the visibility and accuracy of the data. As financial portfolios become increasingly complex—spanning private investments, multiple bank accounts, real estate, art collections, and more—the process of reporting comprehensive financial data to the principal becomes cumbersome and prone to errors. Family offices often rely on disconnected systems, manual data entry, and static reports, which fall short of delivering the insights required to manage today’s complex wealth structures.
In this article, we’ll explore the key challenges family offices face when reporting financials and net worth, supported by real-life examples, and how solutions like Eleven Financial can address these issues, offering real-time, consolidated reporting that principals can access at any time.
Top Challenges in Financial Reporting for Family Offices
1. Time-Consuming Data Collection and Reporting Processes
A report by Deloitte found that 55% of family offices spend an average of 100+ hours per quarter manually consolidating financial reports across different systems and asset classes. This is no wonder as Campden Wealth reports that 40% of Family Office still rely on spreadsheets and manual aggregation of financial data.
One of the most prevalent challenges in family offices is the time it takes to gather, consolidate, and report financial data. Financial reports are typically generated only once a quarter, and the process of pulling together data from various sources—bank accounts, brokerage accounts, private investments, real estate holdings—can take days or even weeks.
Most Family Offices are only receiving a consolidated financial report once per quarter. These reports need to be manually created by compiling data into spreadsheets from various systems.
The manual nature of this process not only takes time but also introduces potential errors. For family offices that rely on spreadsheets and human input, the chances of overlooking an asset or misreporting data increase.
For large Family Offices, with over 200 credit cards and 400 invoices processed monthly, it becomes impossible to get a clear and comprehensive understanding of cash flow or budget adherence in real time.
2. Infrequent and Outdated Reporting
A report by EY shows that 64% of family offices only produce consolidated financial reports on a quarterly basis.
While receiving quarterly financial reports might seem sufficient on the surface, the lack of real-time insights poses a significant problem. When reports are only prepared every few months, they quickly become outdated and don’t provide an accurate reflection of the current financial situation.
Manually compiled quarterly reports, even if comprehensive, don’t come frequently enough to provide the confidence and transparency needed to optimize decision-making. By the time the quarterly report arrived, decisions about budgeting, cash flow, and investment performance were already delayed, reducing the opportunity to act proactively.
For many family offices, this infrequency of reporting is a common problem. Financial data is constantly evolving, and static quarterly reports often don’t account for significant fluctuations in market conditions or changes in investment performance. In today’s fast-moving environment, relying on outdated data can be costly, leading to missed opportunities or poorly timed financial decisions.
3. Lack of Real-Time Visibility
According to PwC, 76% of family offices cite data fragmentation as a major barrier to effective financial reporting and wealth management.
One of the major complaints from principals of family offices is the lack of real-time visibility into their finances. High-net-worth individuals and families have highly diversified portfolios, spanning everything from public equities to private equity, real estate, alternative assets like art and collectibles, and more. Tracking all of these in real-time is a significant challenge for traditional financial reporting systems.
In family offices, it’s common to use various systems like Addepar, Sage, and even spreadsheets, but these systems are often siloed and don’t provide a seamless way to integrate data for real-time reporting.
Without the ability to pull all financial information into a unified dashboard, principals are left with an incomplete picture of their net worth, leaving room for errors in decision-making.
4. Incomplete Financial Reporting
According to Campden Wealth, 39% of family offices say that alternative investments such as private equity and real estate are not included in their standard financial reports.
For family offices managing extensive portfolios, one of the biggest issues is the incompleteness of financial reports. Many existing financial systems are not built to handle the breadth and diversity of assets managed by a family office. Traditional reports might include bank and brokerage accounts, but they often miss key elements involving private investments, art collections, real estate assets, private jets and other real assets that contribute to the principal’s overall net worth.
According to Cerulli Associates, $68 trillion is expected to be passed between generations in the next 25 years, increasing the need for accurate, transparent financial reporting.
The Impact of These Challenges
The consequences of inefficient financial reporting processes can be significant:
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- Missed Opportunities: Delays in receiving financial reports can result in missed opportunities to reallocate assets, optimize cash flow, or take advantage of investment opportunities. Those family offices that adopted real-time financial reporting tools saw a significant increase in decision-making speed and the ability to seize new investment opportunities.
- Reduced Confidence: Without real-time visibility into financials, principals may lack the confidence they need to make timely decisions, which can lead to inefficiencies or lost capital. Moreover, a report by KPMG found that 53% of family offices are concerned about security risks associated with using spreadsheets and manual processes for financial reporting.
- Inefficient Budgeting and Cash Flow Management: Without a clear understanding of ongoing expenses, including invoices, credit card transactions, and recurring liabilities, family offices may struggle to manage budgets effectively. A survey by Campden Wealth indicates that 45% of family offices struggle with producing accurate consolidated financial reports, citing manual data entry as a key source of errors.
- Increased Operational Costs: The manual effort required to gather and consolidate financial data across various systems increases labor costs and reduces overall efficiency in the family office. Family offices using outdated financial systems experience an average 25% to 45% higher operational costs due to not eliminating all manual work, inefficiencies in reporting and data management challenges.
How Eleven Financial Solves These Challenges
Eleven Financial was designed to address the very challenges that Family Offices and their principals face. As part of the Eleven Family Office suite, Eleven Financial provides a consolidated, real-time financial dashboard that gives principals the transparency they need to make informed, timely decisions.
1. Consolidated, Real-Time Financial Dashboard
At the heart of Eleven Financial is a comprehensive dashboard that consolidates financial information across multiple accounts and asset types, including equities, fixed income, real estate, illiquid assets, and private investments. This dashboard is customizable, allowing principals to see exactly what they need at any given time. It eliminates the need to wait for quarterly reports, providing real-time updates on their net worth.
2. Integrated Reporting Across All Asset Types
Unlike many existing financial systems, Eleven Financial integrates all asset types—from private investments and real estate to art, collectibles, and more. By pulling data from multiple sources, including back-office systems, bank accounts, and alternative investment platforms, Eleven Financial ensures that every asset is accounted for in the financial report, giving principals a complete and accurate view of their financial health.
3. Seamless Integration with Existing Systems
Eleven Financial was designed to integrate seamlessly with existing financial systems like Addepar, Sage, and other accounting platforms. Rather than replacing these systems, Eleven Financial acts as a bridge, bringing together data from various sources into one unified platform. This approach minimizes disruption to existing processes while enhancing the transparency and accuracy of financial reporting.
4. Cash Flow Management and Budgeting
“We needed a better way to keep our principal up to date on his net worth and key movers across alternative investments, bank accounts, entities, properties, and over 20,000 assets”, says Jason Strubhar, SVP of Finance & Administration, Eleven Capital Management. “With Eleven Financial integrated into our accounting system, our principal receives real-time updates and drill-downs that eliminate time-consuming and inefficient ad-hoc requests, questions, and surprise phone calls. The Net Worth Movers widget on the financial dashboard provides him with real-time visibility into what’s affecting his net worth over a chosen period of time.”
For principals, understanding cash flow and budgeting is critical. Eleven Financial provides tools to track and manage invoices, credit card transactions, and recurring expenses in real-time, ensuring that budgets are adhered to and cash flow is optimized. Principals can drill down into individual transactions, giving them the ability to identify key financial movers and make adjustments as needed.
The Bottom-Line
Family offices face unique challenges in reporting financials and net worth to their principals. The time-consuming nature of data collection, the lack of real-time insights, and the incomplete reporting of alternative assets all contribute to inefficiencies and lost opportunities. However, solutions like Eleven Financial offer a way forward.
“Getting a financial report from my advisor once a month wasn’t frequent enough for me to make important decisions. Moreover, the reports didn’t include a complete picture of all of my assets, including real estate and alternative investments”, says Chad Pike, Founder of Eleven Systems “Now with Eleven Financial, all of the summaries, visualizations, drill-downs, and real-time reporting are available, and in my pocket.”
By providing a real-time, consolidated financial dashboard, Eleven Financial ensures that principals like Chad Pike have the transparency and control they need to manage their wealth effectively. With seamless integration into existing systems and comprehensive reporting across all asset types, Eleven Financial empowers family offices to move beyond quarterly reports and into a future of real-time financial clarity.
If you’re ready to transform the way your family office reports financials and net worth, visit Eleven Systems to learn more about how Eleven Financial can help.
