Why an AI-powered CRM is vital for a Family Office

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Family offices are arguably the fastest growing investment vehicles globally today. According to EY, there are at least 10,000 single family offices today—at least half of which have been established in the last 15 years! 

The Family Offices that are thriving today are the ones that are capitalizing on technology to fuel their growth. There are several reasons why few technologies are more essential to Family Offices than CRMs.

Managing cross-generational relationships 

By definition, Family Offices grow progressively. And so too do their networks of relationships. As in-laws, children, grandchildren, and great-grandchildren are added, a Family Office’s relationship network expands—both in number and in complexity. 

Adding further complexity, Family Offices typically span a wide range of services, including advisor services (such as tax and legal advisory services), financial planning (such as investment management services), strategy (such as estate and wealth transfer), and governance (such as reporting and record-keeping). Keeping tabs on the multitude of relationships that span these services can be overwhelming, especially for a time and resource-strapped Family Office.   

CRMs enable Family Offices to take a lot of the friction out of managing relationships. As a single source of truth, CRMs house information related to customers, partners, and opportunities. The most effective CRMs view CRM entries as human relationships, rather than transactions. Affinity, for example, helps maximize the value of a Family Office’s relationships by identifying its most important people, in context. Affinity syncs with your communication streams and displays actionable insights, as well as the real-time strength of your connections. Affinity’s Smart Reminders also alert you when it’s time to follow-up with important contacts, helping to ensure that you’re building and maintaining trust. 

Understanding how to strengthen and broaden relationships 

Relationships are at the heart of all successful Family Offices. CRMs can help Family Offices understand how they can strengthen and broaden relationships. The most effective CRMs show you the—often hidden—paths to unlock your next opportunity. Affinity’s Alliances feature is especially valuable in empowering Family Offices to leverage each other’s deal flow. Writing in Forbes, strategy consultant Francois Botha, has highlighted the value of an Alliance-like feature: 

Stronger, more diverse connections facilitate networking and information-sharing amongst larger numbers of family offices. This, in turn, helps those involved to diversify their investments and leverage each other's deal flow.

Alliances can also prove powerful in helping Family Offices enter successful cooperative investments or "club deals", which have become increasingly common. As Botha explains, “this form of collaborative investing not only enables greater diversification but also reduces risk and leverages the expertise of close family networks in industries where these families already hold a significant strategic advantage.” 

Josh Roach, chief investment officer at Lloyd Capital Partners, a US-based Family Office investment vehicle for direct private investments, has also highlighted the value of co-investing and investing with like-minded peers. He’s explained: 

We have always done co-investing because we found that the best deals come from other families and I think that other families are discovering this…It is a very attractive concept—why do it by yourself? Get other people in there to examine it, share the risk, and share the work and contacts.

Affinity Enterprise feature, Teams, also facilitates successful co-investing by allowing different teams to proactively share their relationship strengths and networks, while also ensuring that private and confidential information is not shared beyond individual teams. 

Taking the friction out of due diligence

In recent years, Family Offices have been increasingly moving due diligence processes in-house. However, Family Offices often struggle to conduct due diligence effectively and efficiently. Nearly 70% of Family Offices identify deal due diligence as a key issue. 

The most effective CRMs facilitate effective due diligence. Affinity, for example, helps Family Offices identity which connections can help move the due diligence process along more quickly. As well, Affinity’s note-taking capabilities allow Family Offices to take detailed notes related to multiple aspects of a prospective investment, including the management team, the business model, the market, and any legal documentation, and seamlessly share these notes with others involved in the due diligence process. 

Family offices have been around since the sixth century. But that doesn’t mean they can’t reap huge benefits from a AI-Powered CRM. It’s not surprising that EY considers the CRM “vital for a family office”.


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