Keeping family records usable outside vendor systems
Built on Chapter 7 of The Single Family Office by Richard C. Wilson. Full chapter text: FamilyOffices.com.
A family office should know where its important records are held and how an authorized employee can obtain a usable copy. A billionaire family may receive reports from several providers while the underlying files remain scattered across their systems. The dependency becomes obvious when a provider changes or an urgent question requires an original record.
Chapter 7 explains how outside accounting, reporting, and administration can support the family. Those services also create decisions about access and recordkeeping. Have the relevant legal and technology professionals assess what the family can receive and how it should be stored. Then give someone responsibility for confirming the arrangement works.
Richard's point about sharing selectively
In recorded teaching about background checks and diligence material, I discuss obtaining a lawyer's agreement before placing material in a data room. I also describe removing something too sensitive or invasive of privacy. That is my view on selective disclosure in that setting.
I would apply it to family records by asking what a particular provider actually needs. A service engagement does not mean every person at the firm should receive every family file. The office should establish appropriate permissions with qualified specialists and retain a route for supplying necessary information when an authorized request arrives.
Distinguish reports from source records
A consolidated report can be helpful while leaving out the supporting transaction information. An advisor's summary may omit a signed amendment the family later needs. Ask the professional using the records to identify what must be retained for their function.
The office should know where each required original or authoritative copy is held. Avoid treating a convenient presentation as the complete archive. Keep the relationship between the summary and its supporting material clear enough that an employee can trace an unexplained item back to the source.
Ask what can be exported
Before selecting a system-dependent provider, ask what information the family can receive and in what form. Have the people who will use it assess whether the proposed output is suitable. A file that opens on a computer may still lack the detail required to continue the work elsewhere.
Discuss any material that remains in the provider's own system. Ask how the family obtains information needed for a transfer and what assistance is included. Have counsel assess the relevant rights and conditions. Operational access and contractual expectations should both be understood.
Test the process on a bounded set of records
Use an appropriate sample of nonessential or suitably protected records to confirm the proposed process. Have an authorized employee obtain the files and ask the intended recipient whether the information is usable. Record missing elements and assign their resolution.
The test should serve an actual question. There is little value in creating an elaborate archive exercise that no one will maintain. Start with the records the family would need for the next reporting cycle or a planned provider change.
Keep access tied to the role
The office directory can tell people where a record is located without giving everyone permission to read it. Work with the relevant professionals to determine who receives access and how that permission changes when a role ends.
Ask the provider how personnel changes affect its own access arrangements. Keep the office's contact and permission records current. A former employee's familiarity with the family does not establish a continuing need to see its information.
Plan for the provider being unavailable
Identify which essential tasks would stop if the provider's ordinary system could not be reached. Ask the provider and the office's specialists what arrangement is appropriate for that dependency. Keep the instructions available to the office backup.
Do not assume that an export performed once remains complete after the family adds a new service. Revisit the process when the scope changes. Assign the check as part of the change, rather than waiting for an emergency to discover that the new records are held differently.
Make retention an assigned responsibility
Ask qualified advisors to assess applicable retention requirements for the records they use. The office should document who maintains the material and who is authorized to decide what happens when it is no longer needed.
Keep that responsibility separate from the ordinary convenience of a provider portal. The family should be able to locate the record it needs and explain why the relevant people can access it. A provider transition can then begin with an inventory instead of a search for the only person who knows where the files went.
What to take from this
- Identify the source records behind provider reports.
- Assess export usability before a transfer becomes urgent.
- Share information according to the assigned role.
This page is general information, not legal advice. Family governance documents and dispute processes should be reviewed by a qualified attorney.
Questions and answers
Is a dashboard the family archive? It may summarize information without containing the supporting records the family needs.
Who should assess retention and access? The appropriate legal and technology professionals, working with the people using the records.