A flood of data — some historical, some the result of expanding options in areas like investments — is leading to increased complexity for family offices. The result is not only data management challenges, but also complications in areas like technology integration and talent management. Managing these layers of complexity is an increasing pain point for family offices.
Legacy records and a ‘ghost trust’
Over time, families create new financial entities and investments, and historical documents and stale records can accumulate.
“As families grow and technology evolves, the complexity of managing a family office increases exponentially,” says Matthew Espinosa, senior investment operations manager at Ford Estates, LLC. “One of the biggest challenges we’ve faced is not just the volume of data, but the way records compound over time. Each new piece of information has the potential to connect with both historical and future records — reshaping how we understand the family’s structure and assets.”
Espinosa recently faced a question about a trust that he and his colleagues had never heard of.
“Our database is relatively new, but because we had begun systematically harvesting key data from family-related invoices at the start of 2024, I decided to search the ‘ghost’ trust’s name. To my surprise, the trust appeared,” Espinosa says. That led him to the trust’s current name, ownership details and full history. “The time saved, and the clarity gained, underscored just how powerful good data practices can be.”
Unstructured investment data
Another source of complexity: the growth of alternative investments.
“The accessibility of alternatives has increased. Accessibility, the patience of the single-family office and the returns have made it a very attractive asset class,” says Mike Selfridge, head of client and family office solutions at Bessemer Trust.
These can lead to challenges managing capital calls, filing tax returns and providing consolidated reporting on a variety of investments.
“We have clients with assets all over the world, and they want to have a consolidated view of that. Alternatives can represent as much as 40% of the allocation of a family, and the reporting on that alone is complex,” Selfridge says. “You get K1s, and K1s can take until August to get finalized, and you can’t file your tax returns until you get all the K1s in place. So, that’s an added level of complexity.”
Turning data that comes in a variety of formats into clear, useful reports is another challenge.
“A lot of times, as a limited partner, your reports come in a PDF. Now you’ve got to take unstructured data and structure it into something that is more tech-enabled. There are platforms that will help you do this, but can the family find the right technology resources to eliminate some of that complexity?” Selfridge says.
Seeking to reduce complexity
As each new system creates new layers of integration and migration, family offices may need to reassess the complexity of their solutions.
“Everything gets more complex by the decade, though we also take a periodic view of reducing complexity where we can,” says Josh Kanter, president of Chicago Financial, Inc., a single-family office. “Without a doubt, technology helps, but so does reviewing and revising that technology over time, as new solutions unwind what prior solutions did to ultimately create inadvertent complexity.”
For example, Kanter says new technologies like cloud-based document management have made things easier for a time, but they also added new layers of complexity. Now, newer systems are aiming to make information management and workflow management more integrated and efficient.
“I look at complexity as a pendulum that will swing over the years,” Kanter says.
Espinosa says his office, too, reassesses their technology frequently.
“Managing complexity today requires more than simply capturing data. It requires rethinking how past work connects to present needs and how workflows adapt for the future,” Espinosa says. “Strategically, we’re leaning into more frequent data audits, revisiting workflows and assigning leads responsible for critical data points across departments. By elevating data stewardship and making it a shared responsibility, we’re better equipped to manage the growing complexity of the family office and unlock long-term efficiencies.”
Attracting the talent to turn data into decisions
To handle the flood of new and historical data, family offices need the right talent, in areas ranging from technology to investments.
“Family offices are being pressed to professionalize and bring in a higher level of sophistication in running an operation,” Selfridge says.
This includes, for example, making sure that the office has access to people with the expertise to handle complex investments.
“It’s one thing to invest in alternatives — it’s another thing to invest in the right alternatives. In an asset class like venture capital, the difference in returns between the top quartile and the bottom quartile can be in excess of 20%. So you can be invested and not do well, and you can be in venture and do extremely well,” Selfridge says. “You have to attract talent as a single-family office to really understand what’s being presented to you as an alternative investment.”