Northern Trust unveils new aggregation technology

Thomas Coyle

6 July 2006

Reduces time families now spend creating accurate, comprehensive statements. One of the problems of having lots of money, they say, is keeping track of it all - especially when it comes to understanding how effectively it's being deployed. Family offices typically spend 44 man-hours a month compiling data for a single statement, according to Northern Trust - which says it has a time-saving solution to this problem in a web-based dashboard.

Everything in one place

Northern's Wealth Passport purports to give family offices real-time updates of every aspect of their family's financial picture, from cash positions and liabilities through security holdings to antique car collections and private-equity participations, wherever and however held.

"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," says Steve Appell, director of sales and marketing for Northern's wealth-management group, which provides technology family-office technology to nearly 340 family offices, self-directed high-wealth individuals and advisors.

Wealth Passport users can see securities categorized by type, manager, style or tax status. The report includes trust-held assets as well as alternatives like hedge funds, limited partnerships - which these days account for a good 40% of a high-wealth investor's portfolio - and purely personal-use assets like homes and yachts marinas.

The technology replaces or integrates with various software programs used to track and account for the value of each asset, providing a net worth summary for multi-jurisdiction, multi-generation families, individual households within families and individual family members.

Dollars to doughnuts

According to Tower Group, a Needham, Mass.-based consultancy, the cost of running a large, $60-million-plus, multi-generational office has doubled in the past 10 years to about $3 million a year - and a big part of that cost goes toward covering time spent cobbling together financial and net-worth statements from disparate systems and sources. Meanwhile, says the Tower Group, the additional dollars needed to upgrade operations, technology and people to run a family office are cutting into profit margins.

"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," says Appell. "Still, they would benefit from Wealth Passport as it provides broader data availability, enhanced reporting tools and streamlined transaction capabilities."

Northern won't even sit still to hear questions about the origins of its Wealth Passport, but it's pretty clearly Private Client Resources' PCR Insight technology, white-labeled for distribution by Northern.

Mind you, Private Client Resources declines to confirm this. -FWR