Family offices in Singapore play a crucial role in managing and preserving the wealth of high net worth individuals and their families. Because of this, they need to be able to provide accurate and timely information on accounting and performance reports, in order to establish transparency and build trust with their clients.
However, this is easier said than done – diversified portfolios, the limitations of traditional reporting methods, and stringent regulatory criteria within Singapore presents operational challenges that could hinder the efficiency and growth of family offices like yours.
In this blog post, we will explore four such operational challenges that are commonly faced by family offices in Singapore, and some reasons why they encounter such challenges so often.
We’ll also look at how a solution designed to help organisations consolidate and unify their data, such as an enterprise resource planning (ERP) software, can help family offices like yours address these challenges by improving data management, providing real-time reporting, ensure regulatory compliance, and achieve scalability.
1. Complexity in Data Management
The portfolios of family offices tend to be far more diversified than most typical wealth or asset management firms. This means that they have to manage and analyse a vast amount of financial data correspondingly.
This is a significant challenge for family offices, especially those that still rely on spreadsheets and calculators, or are reliant on proprietary financial management systems cannot be easily adapted to the proliferation of investment types or entities.
An ERP software is invaluable in enabling family office to consolidate and manage this vast amount of financial data in a unified system. This provides a single source of truth into your family office’s finances that can be accessed in real time, and delivers accurate and up-to-date information that simplifies your financial reporting and analysis.
2. Maintaining Compliance With Changing Regulations
Wealth and asset management firms have to contend with the robust regulatory framework of Singapore, and the same goes for family offices. As such, they have to comply with either the Securities and Futures Act 2011 (SFA), or the Financial Advisers Act 2001 (FAA).
In addition, single family offices (SFO) in Singapore are eligible for exemptions from the SFA, under either the Section 13U or the Section 13O tax incentive schemes.
In either case, although the tough regulations might actually attract more interest from high net worth (HNW) families, it does mean the family office that they set up here will have to ensure compliance with said regulations. This can be a daunting task without the proper software tools to handle it.
An ERP software is the ideal tool to help your family office adhere to regulations with its capacity to modernise the compliance function. This enables automated compliance monitoring, the creation of audit trails, and ensures the data security and privacy of both your family office and your clientele.
This helps you greatly reduce the risk of non-compliance, and can save you from incurring costly financial penalties as a result.
3. Limitations On Scalability And Growth
As your family office grows and expand upon its portfolio and services, the complexities of managing its financials and client data is only going to increase proportionately. As a result, you’ll need to increase your familly office’s capacity to manage them.
Unfortunately, family offices like yours also face pressure to keep its headcount low to save on costs, compelling it to focus on its core mission of managing the wealth of the family. Without an easy way to scale, this can be a hindrance to your family office’s ability to handle larger asset portfolios, and cater to the evolving needs of your clientele.
An introduction to NetSuite ERP; Source: NetSuite
An ERP software, particularly a cloud-based product like Oracle NetSuite, is designed to be easily scalable in line with the business growth and subsequent growing needs of your family office. This allows you to quickly scale up the capacity of your ERP software whenever necessary, and ensure your family office always has the resources it needs to best serve your clientele.
4. Difficulties With Multi-entity Consolidation
Many family offices are not solely based in Singapore alone, and might have subsidiaries operating in other countries around the world. If this is the case for your organisation, you may have to contend with each family office maintaining their own charts of accounts, jurisdictions, and tax structures.
This can make it difficult to achieve full visibility into your organisation’s processes, as each subsidiary have to manage their respective charts of accounts in the currency, language, taxation and regulatory regimes of the locales they each operate in.
To eliminate the data siloes this causes, you need a centralised platform that can give you real-time information and insights into your organisation as a whole, and drill down into the processes of each family office that comprises part of your organisation.
And an ERP software with the requisite multi-national/multi-subsidiary functionality, such as Oracle NetSuite OneWorld, is the right tool for the job.
Overview of NetSuite OneWorld; Source; NetSuite
OneWorld gives you the ability to obtain real time insight into data generated by the processes of each family office subsidiary, and comes with critical features such as multi-currency management, a configurable tax engine with pre-configured tax codes, and supports multiple languages.
The ERP Software Is The Right Tool To Address The Many Challenges Faced By Family Offices
Family offices in Singapore face various operational challenges that can hinder their efficiency and growth. But with an ERP software, your family office can address these challenges effectively.
An ERP software, and especially a true cloud ERP software like Oracle NetSuite, makes complex data management much easier by consolidating all data into a single source of truth, modernises your compliance function to keep your family office in line with local regulations, is easily scalable in line with its business growth, and can be upgraded to provide multi-national and multi-subsidiary capabilities as needed.
This enables your family office can improve its operational efficiency, achieve sustainable growth, and empower your decision-making to optimise the management of your clientele’s wealth and assets.
And that’s just some of the things implementing a cloud ERP software like NetSuite can do for your family office. If you’d like to know more about what else it can bring to the table, click on the link below for our solution brief on the world’s #1 cloud ERP software on the market today.