Why Family Offices Move Slowly on Technology

A $2B family office was still using Excel 2010.

Not because of cost. Not because they couldn't afford better.

Because "it works, and we don't want to break anything."

This is the family office paradox: managing billions with sophisticated strategies, but running operations on 15-year-old tools.

Why?

More to Lose Than Gain

Corporate mindset:

• New technology = competitive advantage
• ROI measured in growth and efficiency
• Failure is survivable ("we'll pivot")

Family office mindset:

• New technology = risk of disruption
• Success measured in avoided disasters
• Failure affects family wealth directly

When you're managing 3 generations of family wealth, your primary goal isn't growth—it's not screwing up.

New technology = risk of screwing up.

Therefore: Avoid new technology.

Quote from a family office CIO:

"In my corporate job, I got bonuses for innovation. Here, I get fired for taking risks. My job is to be boring and reliable."

Trust is Personal, Not Institutional

Corporate procurement:

1. Evaluate 3 vendors
2. Check references
3. Review contract
4. Buy

Family office procurement:

1. Who do we know that uses it?
2. If nobody: Probably not trustworthy
3. If somebody: Call them personally
4. If they say "it's fine": Consider it
5. If they say "love it": Maybe try it
6. If ANY concern raised: Don't buy

Family offices trust personal relationships more than marketing or certifications.

If your peer's family office got hacked using a tool, you're not touching that tool. Ever.

"If It's Not Broken, Don't Fix It"

The scenario:

• Current process: Analyst spends 2 weeks per quarter on reports
• New tool: Could do it in 2 hours
• Family office reaction: "2 weeks is fine. We have the time."

Why they think this way:

1. Opportunity cost isn't obvious (what would analyst do instead?)
2. Current cost is sunk ("We're already paying them")
3. Switching cost is visible (migration, training, risk)
4. Status quo bias (known process vs unknown)

When they change their mind:

• Key employee quits ("Only she knew how the model works")
• Auditor flags issues ("Excel isn't audit-ready")
• Crisis happens ("We missed a capital call")
• Family demands better ("I want real-time access")

Pain must exceed fear of change.

Small Team, No IT Department

Corporate environment:

• IT department handles evaluation
• Dedicated implementation team
• Training programs
• Help desk support

Family office environment:

• CIO evaluates (plus 10 other responsibilities)
• Implementation = CIO and analyst, nights and weekends
• Training = "figure it out"
• Support = "call vendor, hope they answer"

Everyone wears multiple hats. Technology migration requires focused time that nobody has.

Quote from a family office CFO:

"We bought portfolio management software 2 years ago. Still haven't finished implementing it. Not because it's bad—we just don't have time for the data migration."

The Data Migration Fear

The problem:

• 10 years of data in Excel
• Complex formulas and macros
• Inconsistent formats over time
• "Only Jerry knows how this cell calculates"

The fear: "If we migrate to new system and get different numbers, which one is right?"

Can't trust new system if you can't validate it.

Can't validate it if you can't understand how your old system works.

The solution (that requires time nobody has): Run both systems in parallel for 2-3 quarters. Compare results. Build confidence gradually.

How to Actually Make Progress

If you're a family office considering technology:

Start with Real Pain

Don't adopt technology because it's "better." Adopt it because your current process is causing problems.

Examples of pain:

• Key person risk ("Only she knows the Excel model")
• Error rate ("We made a currency conversion mistake")
• Audit issues ("Spreadsheet isn't compliant")
• Family frustration ("Why can't I see portfolio online?")

Start Small

Don't try to replace everything at once.

Phase 1: Document storage (upload GP reports) Phase 2: Data extraction (read documents automatically) Phase 3: Basic dashboards Phase 4: Scenario modeling Phase 5: Full migration

Build confidence incrementally.

Get Buy-In from All Stakeholders

• Family: What do they actually want to see?
• CIO/CFO: What keeps them up at night?
• Analysts: What do they hate about current process?

Technology that solves all three = high probability of adoption.

Plan for Parallel Running

• Month 1-2: Setup
• Month 3-4: Data migration and validation
• Month 5-7: Run both systems in parallel
• Month 8: Trust enough to shut down old system

Yes, this is extra work. But it's the only way to build trust.

The Generational Shift

What's changing:

Older generation (60+): Comfortable with Excel, skeptical of cloud

Younger generation (30-50): Expects modern tools, frustrated by Excel

The handoff:

As next generation takes over family office operations, technology adoption is accelerating.

We're seeing this now:

• 40-year-old taking over from retiring CIO
• First question: "Why are we still using Excel?"
• Second question: "What tools do professional investors use?"

Next 5 years will see significant technology adoption in family offices—driven by generational change.

Family offices who modernize now will have multi-year advantage over peers.

The Bottom Line

Family office technology resistance isn't irrational. It's the rational response to managing risk when you have more to lose than gain.

But the world is changing:

• GPs send data digitally
• Regulators expect audit trails
• Families want transparency
• Cybersecurity matters

The question isn't WHETHER to adopt modern tools. It's HOW to adopt them carefully and with appropriate risk management.

Start small. Build trust. Prove value. Expand gradually.

Technology should reduce risk, not increase it.

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Thinking about portfolio management technology? See how other family offices are making the transition →