Family offices are in the early stages of feeling out how artificial intelligence can help in their operations, but they see great potential.
“The use of AI in the operation of a family office is clearly in the early stage. At this point we view AI as a tool to improve efficiency in a limited set of activities with the potential for enormous benefit in the future,” says Michael Salerno of AUA Capital Management.
Family offices describe their current use of AI as a way to increase efficiency and augment the work of a small team – something that can be especially helpful for lean family office teams.
One way for family offices to integrate AI into their workflow is to use it as part of a tool they already have.
“In the near term, much of our effort is focused on leveraging capabilities already being built into the systems we use,” Salerno says. “Many of our core providers are integrating AI into their platforms, which allows us to enhance workflows without introducing unnecessary complexity.”
Improving productivity and client experience
As family offices dig deeper into AI use, they are finding real productivity gains.
Briar Hall LLC views AI in three horizons, says John Benevides, president and CEO: for improving productivity, for improving the client experience, and ultimately, for improving decision making.
In the productivity arena, Briar Hall used AI to help manage all the documents connected to their private equity investments: distributions, call letters, correspondence from general partners.
“At the scale and volume of our activity, just navigating that inbox, processing correspondence, getting it where it needs to go, making sure we were acting on it was a full-time job,” Benevides says, “With growth, we were preparing to add a second full-time person just to manage it.”
They found AI could automate most of this process: It can access private equity portals, pull down the necessary information, route it to the appropriate person or place, and even prioritize it. Briar Hall deployed this technology about a year and a half ago and was able to reassign the existing staff and didn’t need to hire the second person.
“That’s a really visible gain in productivity,” Benevides says.
AI has also helped Briar Hall improve reporting.
“We have hundreds of thousands of transactions, and people who were doing very basic tasks of reconciling: Does this match that? Did this come through? AI can do that, and if it’s not reconciling, can do troubleshooting,” Benevides says.
AI has also produced productivity gains in notetaking, Benevides says: “Now, when we have meetings, we have a tool in the background that is actively taking notes. The early versions were simply transcripts. Today, the notetakers produce summaries that are well synthesized and list all the actions to take, with due dates and names of those responsible. We save time because we’re not using expensive resources to recap the minutes and then to consume time from everybody who attended to validate them. Not only is it more efficient, it’s much more effective.”
Briar Hall is in the early days of using AI to improve the client experience.
“We are using AI to better understand who we’re interacting with as clients, how they’re using the office and how engaged they are with the office and broader family. It’s allowing us to focus resources in areas that bring higher impact and value to the client experience,” Benevides says.
Notetaking tools are helpful in client work as well as in internal meetings.
“The ability to focus advice and to use a notetaker in meetings with clients will elevate the advice clients receive and allow us to deepen the conversations. It allows the human advisors to be more present in the conversation versus being there for recording and writing things down,” Benevides says. “Looking forward, we think that there is likely going to be an advantage in using AI to create deliverables for clients.” This could include creating easy-to-understand visuals from complex legal documents, for example.
Supporting decision making
Briar Hall is also in beginning to explore using AI to aid in decision making, primarily regarding investment activity.
“We have a few prominent investments in public companies, and we have used AI to create ways to analyze risks and opportunities for those companies in the next 12 months, and to project forward to a five-year horizon,” Benevides says. “Traditionally, it would require seasoned and expensive human investment resources to do that, and with AI, we can produce a deep, high-quality analysis, quickly, every month.”
The investment team develops the prompts that AI uses, both to generate the analysis and to create a presentation of the analysis, including graphics and charts, for the clients. Importantly, the investment team reviews and signs off on all final work product before it is distributed.
On the private equity side, AI is helping review limited partner agreements for each investment. Typically, Briar Hall’s general counsel and outside counsel review these agreements to be sure the clauses Briar Hall wants are present and to flag anything that needs further negotiation. Now, AI does the first steps in this analysis.
“That has allowed us to dramatically improve our analysis and expand our capacity,” Benevides says. “We can do complete reviews across more investing activity without having to add staff.”
It has also dramatically reduced the cost of these reviews. Briar Hall is now working with an outside law firm that specializes in using AI to review LPA documents and then adds a human attorney review before it goes back to the client.
Briar Hall is embarking on a new project: putting all of the office’s historical LPA agreements into AI to analyze the entire portfolio.
“We want to see what our portfolio looks like at the aggregate level — see if there has been any change over time in the kinds of things we agree to or don’t agree to, or in what the general partners are putting in their initial agreements,” Benevides says.
Preserving the human touch
As family offices explore how they can free up staff from low-value tasks using AI, they are also taking care to be sure their data remains secure.
“As we expand our use of these tools, we are doing so in a measured way, with a clear focus on data security and client confidentiality,” Salerno says. “Any adoption is evaluated through that lens, particularly with respect to the handling of sensitive information.”
They are also making sure humans remain part of the workflow.
“Much of our work is inherently nuanced and relationship driven,” Salerno says. “These tools can support the process, but they do not replace the experience and judgment required for investment and advisory decisions.”