How can investments in operations help a family office operate more smoothly? Matthew Espinosa is a senior investment operations manager at Ford Estates, a single-family office based in Detroit that was established more than 65 years ago. He talks about what he has learned about technology for the family office:
What is your role at Ford Estates, and what led you to this work?
When I was recruited to Ford Estates back in 2018, I had overseen many significant technology implementations. The five-year strategic plan for the office included new implementations in portfolio accounting software, a custodian transition and a new general ledger system. They needed an operations manager who could successfully help lead these implementations.
Originally, my role started in investment operations. Now it has cascaded to firmwide operations: I’m working more across the whole firm, trying to bring the office technology platform to a single source of truth. We’ve made a lot of headway there. Information is more readily accessible to the team that works here and is more secure than what we had before. There was a lot of stuff on paper, and we are transforming it digitally.
What technology have you implemented?
We have implemented Black Diamond, Sage Intact and Salesforce. With Black Diamond, we had a lot of history we had to comb through — private investments and illiquid assets we had to bring into the system — and that took two years. Overall, the implementation went smoothly. I learned a lot about moving mass quantities of data, and it set me up to move 20-plus years of history here in a very data-dense environment.
How is the family office organized, and what services does it provide?
We are a full-service wealth management firm that serves a single family. In office, we have an investment team, a wealth advisory team, a client services team, an investment operations team and a tax team. The client services team provides concierge services such as handling bill payments. There are some services we deliver with the partnership of a third-party advisor.
What is the goal of your current work?
We are evaluating our work to see where we can connect different tasks into one workstream — so when one department gets handed the ball, they understand what work was done beforehand. This gives all the different departments insight into what’s going on. We’re training the different teams on the work that was done before and what comes after.
One example is the purchase or remodel of a house. The workstream begins when a family member submits a request. This initiates a series of coordinated workflows, including a portfolio review, notification to the investment team and outreach to various managers to raise the necessary cash. The process continues with monitoring trade settlements, managing post-trade cash movements and coordinating with third-party contractors or vendors. It culminates in executing payments to those contractors or vendors and ensuring all transactions are accurately recorded, particularly with regard to potential tax implications.
Initially, some teams focused primarily on completing individual tasks. But because each task is interconnected with others, we need a more integrated workflow.
What do family offices need to know about cleaning up data to make this type of system possible?
Having a single source of truth will make everything smoother. This means that each person or record is recognized on every system — even though they may be related to different entities, such as households or trusts, and even though their names may be listed differently, using a middle name in some cases and an initial in others — so that the systems can talk to each other. If naming conventions are consistent, it makes for less cleanup for ad-hoc requests.
Once the data is clean, you can start integrating systems. Then you can start building out workflow, looking at tasks, anticipating the next step.
In the example of remodeling a home, the tax team will know, when the project starts, that there will be an impact to them at some point and will try to forecast it. They need to understand how long it will take for the remodel to be complete.
How does having good data and up-to-date technology help the family office?
Our leaders need good summaries — for example, for a client meeting, they may need to sum up a year’s worth of activity on a one-pager. How do you get the information to put that together? How do you think through the problems and figure out if it could be done more efficiently? That’s what we have built internally here. Watching the workflow change is kind of amazing.
Internally, one of the tools we have found really helpful is Salesforce. It’s typically a sales tool, but I have been learning to use it for planning tasks.
We are also trying to give our leadership team the ability to forecast.
How are you using automation and AI?
We are at the forefront of AI and are starting to deploy digital workers, or bots, to do more of the manual stuff in batches overnight. We’re trying to get ahead of that curve. That’s important because we’re a family office, and family offices often seem to be a few miles behind in the race when it comes to technology.
We want to break down manual processes and get rid of them as much as we can. For example, one of our biggest struggles is multifactor authentication. The more secure accounts become, the harder it is for the family office to do work on the family’s behalf.
We are working to quantify all the invoices that come from each vendor, for example. For one telecommunications vendor, for example, we may have different clients and different account numbers, and different login credentials. It’s different from when they used to send an invoice in the mail. Having everything digitally go back to a single source of truth is allowing us to process more automatically. That’s what we have designed our digital workers to do: They extract information from these invoices so we have a database to refer to. Now we can pull information from the database and project when these invoices are coming rather than wait for an email.
Another reason this is helpful: It used to be that if a vendor had a data breach, our family office leadership would have to figure out what accounts we had with that provider and how serious a problem the breach was. It could take weeks to figure out a solution. Now, we have the ability for leadership to quickly identify who is affected — to immediately work on solving the problem without having to first work on figuring out who is involved in the problem.
What future projects are you planning?
We have a really good set of operations team members. I’ve been transferring a lot of the work I do down to them — it’s amazing to watch them blossom and run the systems. That has allowed me to start digging into other parts of the business and office, working behind the scenes, trying to make things better for the family.
The fact of the matter is that our family could go to any service provider outside of this family office. We need to be best in class — we have to provide them something that is better than they can get out in the marketplace.
