Virtual Family Offices: Six Tips for Success

Outside of my work with Cresset, I run our family’s single family office. With the world adapting to the “new normal” of working remotely in response to the COVID-19 pandemic, I’m often being asked how the transition is going for my family office.

The honest answer is: not much has changed.

You see, for the past 20 years, our family office has been operating virtually. With family members and staff scattered from coast to coast and all points in between, it’s rare that we are physically together.

That experience has taught us much about what works, and what doesn’t, in operating a virtual office. Family offices (and, frankly, businesses of all sorts) everywhere are suddenly working furiously to figure out what we’ve learned over the past two decades. Interestingly, as family offices quickly adapt, I am already hearing people say, “I’m not sure I want to go back to the office … even when it’s safe.”

While the appeal of working virtually can be compelling, to make it work well, you need the right people, the right attitude, and to take the time to establish the necessary processes, infrastructure, roles and responsibilities.

Below are six tips to do just that:

Tip 1:  Get in front of technology and have someone “own” it

In any virtual environment, technology is everything. The most sophisticated and the most mundane tasks will be done virtually, and every task will rely on a technology-based solution. What can you do?

  • Embrace technology. Commit to being a “fast-follower”. Research and implement the technology you need to be effective and efficient now and into the future.
  • Designate an “owner”. Designate someone to own the development of your technology roadmap and its implementation. This is a mission-critical role for a virtual family office.

Tip 2:  Secure buy-in from everyone … even the stragglers

The best technology is only as good as the weakest human link. Just one straggler on the team can present problems for the whole office. For me, that was a tax manager who couldn’t leave her paper world behind in favor of the virtual world, causing frustrations, delays, and inefficiencies throughout the organization. What can you do?

  • Require adoption. Everyone should be on board with technology adoption from the beginning. Participation is non-negotiable.
  • Be sensitive. Appreciate and adapt to different learning styles and make sure people get the training they need.
  • Empower a responsible party. Whether an employee or consultant, empower someone to help ensure adoption of technology across the team. Grant that person the authority needed.

Tip 3:  Align on processes – both digital and physical

Even with everyone on the same technological page, a dispersed family office will need to establish processes and protocols for sophisticated, as well as seemingly innocuous, matters. The list is long and different for every office, but think about:

  • Where will your data reside?
  • What are your security concerns?
  • Where will mail be sent and who is responsible for processing it?
  • Will physical checks be written and signed in the same place?
  • Where will the family office’s headquarters be? Do you need different business and mailing addresses?

Tip 4:  Compartmentalize your professional and personal lives

Working from home can seem great. No commute. No need for office attire (at least on the days you don’t have video meetings). However, working from home on a full-time basis takes training, discipline, and focus. Potential distractions lurk everywhere. Spouses. Kids. Pets. Netflix!  Be disciplined in carving out how, when, and where you will get your work done. What can you do?

  • Dedicate working space. Where possible, commit to a dedicated, “off-limits” workspace.
  • Prepare for the workday. Prepare yourself for a workday that is all about work, and only work. As traditional office workers are now learning, mental interruptions at home can be constant. Be vigilant about separating your work and personal lives.

Tip 5:  Build – and earn – trust

Trust between family members and colleagues is essential for any family office. When working virtually, it is even more so. Without being able to physically walk down the hall and see someone at his or her desk or pose a quick question, the team must trust that everyone is doing what they need to be doing. When suspicions arise that someone is not carrying his or her weight, the inability to physically check in can quickly create a toxic atmosphere. A missing email response to a simple question can suddenly become a reason to doubt a colleague’s work ethic. Those seeds of discontent can spread fast if you don’t get in front of them. What can you do?

  • Lean on technology. Use the technology at your fingertips to communicate with each other – even more than you would in a physical office. Launch a video chat or pick up the phone.
  • Over communicate. Don’t rely solely on email – there’s no substitute for video chats and phone calls when it comes to real-time communications, tone, and nuance. Overshare, don’t undershare. Communicate what you are working on, and others will likely do the same.
  • Address problems quickly. Start with trust, but look for cracks and address them fast.

Tip 6:  Don’t discount the physical world

Finally, be wary of virtual success. No matter how good you are at this, in-person meetings are irreplaceable within a family office. Zoom and other video-conferencing tools are great, but they are no substitute for the real thing. What can you do?

  • Get together. Make the effort to meet in-person at least annually, and quarterly if you can. The cost of those plane tickets and hotel rooms will be well worth it and are likely offset by the savings on physical office space.
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About Cresset

Cresset is an independent, award-winning multi-family office and private investment firm with more than $45 billion in assets under management (as of 04/01/2024). Cresset serves the unique needs of entrepreneurs, CEO founders, wealth creators, executives, and partners, as well as high-net-worth and multi-generational families. Our goal is to deliver a new paradigm for wealth management, giving you time to pursue what matters to you most.

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