Northern Trust targets affluent with wealth snapshot service

Source: Northern Trust

As the number of high net worth households worldwide jumped 6.5 percent to 2.7 million in 2005, and the number of family offices serving the ultra wealthy continues to climb, Northern Trust, the 8th largest global custodian in the world and a leader in serving the financial needs of affluent individuals, is introducing Wealth Passport which allows families, family offices and their advisors to know exactly what they're worth at any given point in time.

Hosted by Northern Trust, Wealth Passport, which is available now, provides industry ground-breaking, behind-the-scenes integration of all of a family's assets on their desktop. The Web-based technology gives individuals an accurate and real-time update of every aspect of their financial picture, from a wine collection to their position in a hedge fund. It takes the place of or integrates with various software programs used to track and account for the value of each asset thereby providing a net worth summary for each family member.

More Than 340 Family Offices, Family Members and Advisors Use Northern Technology Today

Wealth Passport builds upon current technology developed for the highly specialized needs of family offices, and Northern's proprietary Passport® technology platform used by the company's most complex global institutional clients. Wealth Passport, which was beta tested with more than 30 family offices and advisers for over a year, represents an expansion of current technology to accommodate a family office's growing needs.

Generally, ultra wealthy families employ full time professional managers to oversee their diversified wealth in a family office. This distinct group of investors has an institutional financial profile. They invest in complex asset structures such as partnerships, desire customized reporting, employ multiple investment managers, and allocate more of their portfolios to alternative assets, such as hedge funds. Additionally, ownership of the assets is typically spread across multiple generations and continents.

"Confronted by complex issues such as tax shelters, asset structuring, multiple asset classes, international investment options, and estate and tax planning concerns, ultra high net worth families can no longer afford to employ a fragmented wealth management strategy," explained Steve Appell, Director of Sales and Marketing for Northern Trust's Wealth Management Group which serves 23 percent of the Forbes 400 Richest Americans. "What all of our clients ultimately want is a single live balance sheet and net worth statement -- one that automatically updates assets, liabilities, and net worth constantly and keeps track of all of their assets including trusts, business and partnership interests and their home in Maui."

Family offices spend 44 hours per month pulling together data for a single financial statement

Prior to Wealth Passport being available, family office employees and individual investors would typically have to spend days or weeks gathering and consolidating information from various reports and software programs into a single financial statement. In fact, Northern found that family offices spend on average 44 hours per month aggregating data from various systems and/or providers. In more than 25 face to face interviews, family offices and their advisers said that the single most important aspect of the technology has to be a single financial and net worth statement.

Besides the inefficiencies of performing manual entries and combining spreadsheets of data, the cost to purchase, maintain and upgrade technology to run a family office, can be staggering. Aggregate spending on wealth technologies is expected to rise to $3 billion annually by 2008, according to the Tower Group. Moreover, industry analysts say the annual cost to run a large multi-family office is approximately $3 million, having more than doubled in the past 10 years. At the same time, the additional dollars needed to upgrade operations, technology and people to run a family office are cutting into profit margins, they add.

"Yet, if an ultra high net worth investor prefers to build or use his or her own technology platform, Northern's Wealth Passport will continue to provide support to those who prefer to maintain an internal technology and accounting infrastructure," explained Appell. "Still, they would benefit from Wealth Passport as it provides broader data availability, enhanced reporting tools and streamlined transaction capabilities."

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