To operate a successful business effectively and efficiently, you need to have relevant and accurate information regarding the performance of the business. In this article, Founder and CEO of S.I. Williams Wealth Management, LLC, Sherilyn Casiano, discusses how the Dynamic Wealth Information Management Business Solution – DWIMBS – was born and how it addresses the real operational efficiency needs of the family office as a whole.
In previous articles, both in The European Financial Review and The European Business Review, I’ve shared some of my story and my core belief that information management is the key to effective wealth management and preservation. In this article, I’m going to talk about how having the right marriage of process and technology for information management, i.e., doing the right things at the right time in the right way, dramatically reduces the cost of operations and exponentially increases operational efficiency in any business and – in particular – in the family office.
But before I dive in, you may be wondering what qualifies me to speak about such matters, especially if you have missed my other articles for The European Financial Review and The European Business Review. My name is Sherilyn Casiano and I am the CEO of a multi-family office in New York City, catering exclusively to the complex needs of investment bankers and venture capitalists. Before that I was in charge of operations for the personal wealth group at KKR (Kohlberg Kravis Roberts & Co.). I also have been hired as a consultant on several occasions to help struggling family offices and estate planners sort out wealthy families’ finances.
For me, everything starts with information. To operate a successful business effectively and efficiently, you need to have relevant and accurate information regarding the performance of the business. To ensure that you have that information, you need a process to effectively collect, verify, and manage all the information that affects your business’s performance. This is especially true for the creation of an effective and efficient single family office. And if it’s not in place, forget about having an effective and efficient multi-family office.
[ms-protect-content id=”9932″]A Lesson from Big Blue
An example of how critical the right process is to operational effectiveness is illustrated by a famous case study from IBM. In their landmark book, Re-engineering the Corporation, Michael Hammer and James Campy tell the story of how IBM Credit Corporation, a subsidiary of IBM, reduced the time to process a credit application from an average of 7 days to 4 hours, not by adding more people, but by re-designing the process for greater efficiency. The result was a 100-fold (100X not 100%) increase in productivity – accompanied by a small reduction in personnel.
My Quest for Operational Efficiency in My Business
In 1999, I created my own family office practice. Once I started my own practice outside of KKR, I worked to further develop and refine my approach and process in order to efficiently meet the specific and complex needs of my clients and to distinguish or set apart my service from what we did at KKR.
To move beyond the approach that we used at KKR, I became much more proactive instead of reactive. I would think through what information would be important and truly useful for my clients to have, and then create systematic processes and procedures to capture that information, so we would have it for them when needed. By anticipating problems and requests, I dramatically reduced the time to meet clients’ demands. It’s this proactive focus that took my work with clients to a level way beyond what we had at KKR. I finally realised that I had actually created a real methodology and system to reliably give my clients real control – not just the illusion of control that most wealthy people settle for from traditional wealth management. I named my system “The Dynamic Wealth Management SystemTM.” It was at that point I started to look for technology to help streamline and automate the whole process.
The Pursuit of Technology
I looked at everything available on the market that claimed to be for the Family Office. But to my surprise – and then my frustration – there was nothing that was designed to make the administrative tasks any easier. All the products were designed for the type of Family Office dominated by an Investment Adviser/Manager – to make their job easier. So, the software could show you the balance in portfolios across 50 mutual funds, but was useless for trying to track the costs and insurance for the staff and animals at the horse farm. None of these products seemed concerned with the day-to-day challenges that hamper the productivity of the typical family office team. Speak with anyone who actually uses those products, and you quickly discover that they are just making do.
And I found those products certainly could not easily provide the wide range of asset information – both financial and non-financial – that my clients and their advisers relied on me to deliver. The reports available from those products were either too simplified at the overview level or too complex with regulatory mandated detail to give a High Net Worth client what they REALLY need in order to be in control. Those products are handicapped by their very sophistication and effectiveness on the investment side. You can’t use them to create reports that are truly meaningful and useful to the client.
Desperate Measures
Out of desperation, I hired a team of programmers to create something to MY specifications. Designed for the Family Office by a Family Office Owner/Manager with first-hand experience doing the day-to-day work in a family office. That’s how the Dynamic Wealth Information Management Business Solution – DWIMBS – was born.
Serving Three Masters
The challenge we faced was to create a product that would enable me to cost-effectively meet the demands of not just one, but THREE masters: the wealthy family, the family office team, and the various advisers to the wealthy family. Each has specific, complex needs that are vital to the job of preserving and managing wealth. And the resulting product is even better than I hoped for. It is the result of over 20 years of real-world experience and application. It is extremely powerful – and yet quite straightforward and easy-to-use.
It automates the lion’s share of the day-to-day tracking and back office work with built-in reminders so you don’t miss critical details and activities. And customised report templates that give you a strategic overview and details without being overwhelming. And a proven system for ensuring that the information you put into those reports is complete and accurate, and that the information passed through to your various advisers is reliable and accurate, so they can more effectively do their job.
Like most of the administration team in a typical family office, I used to have to pull information from many different applications, and use three or four others to combine and produce reports that showed anything more than just invested assets. It’s this having to get the needed information from several different sources and locations that is the biggest constraint, the greatest expense – both in time and money – for a family office. And it is these very problems that the leading products do little or nothing to solve.
More Than a Numbers Game
Most people’s wealth is not in the market; it’s in various forms of hard assets, some liquid, most not very liquid at all. For instance, I often use the example of buying a piece of art – say a Rembrandt or Picasso. In traditional accounting, you would record the item, the transaction amount (how much you paid for it), and the date of purchase. Done. And that’s about as far as the typical bookkeeper would go. However, knowing just that basic information is not particularly useful when managing that asset. There is considerable additional information that is relevant and important about that asset. For instance, the name of the person or gallery the piece was purchased from. That’s important for proving provenance. Also, a copy of the bill of sale. Then, who is the actual owner: you, your spouse, the family, a trust? What is the market value and is it insured for that or is it insured for more (or less) … and what is the renewal date? Who is the insuring company? Their phone number and the name of the broker? Has the piece been pledged as collateral on a loan? Where is it located – the office, the city apartment, the main house in Connecticut, the beach house – or is it on loan to a museum for the Picasso exhibit and tour?
All of that non-transactional information is critical when dealing with that asset in the real world. And, typically, each of those pieces of information is in a different place – the insurance broker’s file, the tax accountant’s file, the Family Patriarch’s cell phone, the memory of the executive secretary who retired last year, etc., etc. The team doing the day-to-day work in a family office gets asked for this kind of information, about all kinds of assets, including investments, partnerships, etc., all the time. But tracking down such information – if you’ve not already collected it – is tough, time-consuming, and costly. So an essential part of my system is to collect all such information and retain it together, in one place, so you don’t have to search in a dozen places and call a dozen people to put it together when the client asks for it.
Moving Beyond “Making Do”
In the IBM example I mentioned at the beginning of this article, a key step in the dramatic reduction in time was achieved by providing the person doing the work – the “Deal Structurer”– a new computer system which provided him/her ALL the data, tools, and templates needed in one place, with one screen view, thus eliminating all the time wasted hunting between other processors and departments for information. In a similar way, my software, DWIMBS, brings all the information related to an asset into one place, so that it’s readily available when needed. The underlying architecture and easy-to-use entry screens of the DWIMBS platform enables one to view all that information in the example above on a single screen! No more having to run around trying to find what you need. It’s right there, ready to be used when you need it! The time – and the overtime savings – are extraordinary. I can accomplish in a few hours what used to take me three days!
Suddenly, I’m in the Software Business!
That’s why I decided to make the software available to the Family Office Community. I believe there are many other Family Office managers who are tired of just “making do” like I was. And we keep discovering new capabilities beyond my original specifications. For instance, we recently discovered that DWIMBS lets us easily calculate equity distribution between multiple partners over multiple time periods – a very tough problem for most family offices or trust companies, as the percentages change as partners are added or exit. Well, turns out it’s easy with DWIMBS, because it already collects the necessary information! We just needed to create the report template to make it available to our clients.
So, this is how I came to be in the software business. DWIMBS is a very exciting product that addresses the real operational efficiency needs of the family office as a whole, the reporting needs of the wealthy client, and also the information accuracy needs of the various tax, estate, trust, art/collections, investment, and other advisers. Everyone wins with DWIMBS.
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About the Author
Sherilyn Casiano is the Founder and CEO of S.I. Williams Wealth Management, LLC, in New York City. She holds an MBA from Columbia University. She was a key member of KKR’s personal wealth group service for the New York general partners. She has headed her own multi-family office for 14 years. For further information about her Dynamic Wealth Management SystemTM and her family office software or for help with establishing your own dedicated family office, call (212) 886-9078. Look for her soon-to-be released book, Take Back Control, for a more complete guide to establishing your own family office.
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