Josh Miller is the non-family CEO of Acadia Management, a multigenerational single-family office based in Boston that focuses primarily on investment management oversight, trust administration and tax. An attorney by background, Miller was brought on board to modernize and build the office, which serves over 100 family members in four generations. He discusses what it means to modernize a family office:
What are the challenges involved in modernizing a family office?
This issue is very technology-focused. I start with: What are the needs of the family? What are we trying to accomplish, and what are going to be the best tools to keep us very efficient that are also cost-effective and not overly burdensome from an implementation perspective? There are some tools out there that are probably great, but I would need to spend the next year-plus implementing them. If you are a new family office, then implementation is not as big of a challenge, because you do not have 50 years of data built up.
The other big challenge is that everything talks to something, but nothing talks to everything. Sometimes we have systems where, if I have a family member that gets married, changes their name, just changes their email, or moves, we've got to update that in about four different systems, because not all of them talk to one another. So, we need to think about all that from an administrative perspective. It is a consideration as you are bringing on these systems.
What should family offices consider when evaluating technology?
The technology you get is going to depend on what you do. If you are very investment-heavy, there are systems that are appropriate for that. If you are more concierge-heavy, there are systems for that.
For us, as an office with a larger number of family members, it was important to get a CRM, or customer relationship management, system. These are not super common in the single-family office world, but for us it was really important — not only so that we could keep track and maintain records and particulars on family members, but equally important, so we could share it across the staff. If I speak to a family member and then that family member calls someone else on my staff, my staff member needs to be able to look at the CRM system and instantly be up to speed on what is going on. The ability to share information across the team is one aspect of the modernization of family offices — ensuring the staff operates as a collaborative team all working together.
How do you know when it's time for the family office to evolve?
A lot of family offices start with mission, vision and values. You cannot forget about that, because even if the mission fundamentally stays the same, the values of the family will shift over time as people get married, and as people move, or if a business is sold. While it is not something you need to review every year, you need to keep your finger on the pulse of the family. You need to be able to see when what they are asking you to do, and what they need in their current stage of life, is shifting — and maybe the family office also needs to make a shift. It might not require new technology, but it may require different processes or procedures, or a new staff member.
How do needs change as the family office grows?
Family offices evolve: They start with just the principal and the CEO working together, hand in hand, until you have one staff member of the office who is doing the majority of the relationship management. But as they hire additional staff, the needs progress.
I think that as you build out a team, it is important to make sure you are keeping everybody up-to-date and involved. I learned this long ago working in a law firm: I really appreciated it, when I was given a discrete piece of work, when the partner took the time to explain how my piece fit in with the larger project. Not only did it help me understand the relevance of what I was doing, but it also gave me the opportunity to make suggestions.
Running a team is just making sure everybody understands both the big picture and how their discrete piece of whatever they are working on fits in with that big picture. In my mind, that's modernization: a fully collaborative, functioning team where any family member could reach out to any team member and get what they need.
How do you ensure that the family office stays modernized?
We had to do a lot of modernization in a very short time. But now we are a mature family office with exceptional governance, processes and procedures. Now, it is really about evolution and making these tactical shifts to make sure we stay in front of the family's needs, and that the software and the programs and the systems that we are using are also growing with us.
SaaS subscription models have made this easier. Before, when you had to download new versions of software or buy the newest version, a lot of people skipped some versions. Then fast forward five years, and the old versions are not supported anymore. With today's subscription models, that is not as big an issue — what I love about them is that they're constantly being improved and updated.
You still need to pay attention, though — be aware of what is new in technology. Part of me believes, ‘If it's not broken, don't fix it,' but I think ancillary to that is, ‘If it's not broken but there's a better way to do it, then you should look at that.'
How can family offices stay flexible?
Having enough flexibility to evolve as the family evolves is really important. Someone once told me that they had heard family offices need to be looking 500 years down the road. I agree with that, but I think it is hard to do. However, I do think that family offices need to be thinking at least a few generations down. A family office that serves G1 and a couple of G2s is going to function significantly differently than the family office that is working with much later generations, with 100 or 150 family members and many households.
You need to start thinking about how you are going to get from Point A to Point G. As new family members come in, and married-ins come into the family, perspectives will change. Values may potentially change from generation to generation. And I think the family office really needs to try their best to stay ahead of that.
