This is the first in a series of articles in our special report on technology in family offices.
Since the development of the first word processor in the 1970s, we’ve been promised that technology would make paper go the way of the dinosaurs and that we’d all work in a more streamlined, clutter-free environment.
More than 50 years later, however, the paperless promise has struggled to gain traction in some quarters, especially among single-family offices, where paper and Excel spreadsheets are often still the primary modes of data analysis, management and storage.
These firms handle complex financial portfolios and vast sums of money, yet many remain stubbornly analog. According to a 2024 report from Deloitte, 72 per cent of family offices are underinvested in operational technology. Some are moderately invested—34 per cent—but many still use paper.
“A lot of people still feel like spreadsheets are their safe way of doing things,” says Amrit Kang, head of marketing for MyFO, a Vancouver-based maker of software for family offices. “I think there hasn’t been a technology that’s easy to implement, cost effective, simple to understand and use daily. So I think a lot of family offices just use spreadsheets.”
While there’s nothing inherently wrong with relying on paper, the Deloitte report points out that family offices are facing internal and external pressures to upgrade their technology. External pressures include evolving tax and regulatory issues and the need for detailed documentation. These firms also must keep up-to-date on new investment opportunities.
Internal pressure comes from families looking for personalized reporting, insights and analysis so they can make informed decisions. They want a holistic view of their entire portfolio and they want it now.
Pressure from within the family
Sometimes, however, the pressure to modernize is familial, says James Dunne, founder and family office advisor with Markdale Financial Management in Toronto.
“I sat down with somebody recently in their 70s with a paper-based process, with a bank of filing cabinets in their office and $250 million that they’re responsible for. I told them about how we operate and the tools we use, like Google Drive and QuickBooks Online,” he says.
The father was concerned about not having access to information if the internet went down, but the secret to moving toward a more paperless office is not to throw out all the historical documentation but to build on it and bring the next generation into the conversation.
Younger family members also are encouraging a shift to cloud-based platforms, Kang says.
Dunne says the person was visibly uncomfortable. “You could tell he’s thinking, ‘That sounds scary to me.’ I glanced at his son, who was also in the conversation, and his son, in his 40s, who was nodding the whole time, is thinking, ‘Oh, dad, you totally have to do this.”
Implementation efforts and costs also play a role in the hesitation. CEOs fear that adopting a new system will be intimidating and disruptive, Kang says.
“Millennials and Gen-Z who are taking on ownership or bigger roles within the family office space is the trend,” she says. “When we see people who are booking demos, it’s usually those newer family offices or advisors who are looking for something that would kind of simplify their jobs.”
Benefits of upgrading technology
One of the big benefits of going digital is cost savings, Dunne says.
“They are significant. Just getting rid of a rented office could be a few thousand dollars a month,” he says. “We’ve gone digital, and I work from my home office, and when we meet with the families, we just go to their living room, or go to their office.”
Another benefit is transparency. Some people who have “a few $100 million or more in investments” don’t actually know their net worth, Dunne says. “They kind of have an idea, but they haven’t really tallied it up in a process-oriented way.”
Then there’s the intergenerational transfer of wealth and information. Dunne says that founders often have no sense of urgency.
“When you’re in your early 70s, you might be in okay health still, doing your regular walks, playing golf, visiting your grandkids,” he adds. “And then all of a sudden it gets to a point where you can’t do that.” That’s when families might need to scramble to prepare for the safe and immediate transfer of responsibilities.
Having your information digitized can help ease the transition, especially in the case of illness or death, says Nicole Kotyk, the chief vault master of Toronto-based FutureVault, which provides secure digital storage and other services to family offices. Their vaults can hold anything from key financial data to estate-planning documents to your auto insurance information, all available via an app.
“Most people are collaborating online now, and it’s easier to do that by email and online. You don’t have paper lying around,” Kotyk says. “And also, if they were to die tomorrow, someone such as a beneficiary would be able to process their estate will and trust.”
The concept of a “vault” is key. It’s not a workspace—like SharePoint or OneDrive, which, while based in the cloud, may not be that private and owned by big tech companies—but a secure home for critical records. “It’s sort of like ‘it’s done, and it goes here, and that’s where it lives now’,” says Simon Tipler, chief product officer at FutureVault.
The value of easily sharing secure, private information inter-generationally and with advisers is clear, he explains, but going digital has given family offices another advantage. They can tap into any value that’s “locked” in the documents themselves. FutureVault uses AI to extract what Tipler calls “alpha content,” which is the high-value information already embedded in context-rich docs.
“Now that we have artificial intelligence, we can get data out of the records,” he says. This can help families make rapid, informed decisions about their investments, donations, businesses and foundations.
Still, even family office executives who like the idea of a digital vault might hesitate to commit, Tipler says. It takes time and effort to find and move the information from an analog to digital state, after all.
Yet, as Kotyk says, digitization is the future, and the era when all our information is online and readily available is here.
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