U.S. family offices: only 5% say next generation fully involved

UBS’s annual Global Family Office Report, based on a survey of more than 300 family offices across 30 markets, found that 5% of U.S. family offices reported the next generation is fully involved in leadership while 33% reported partial involvement. Globally, 13% said the next generation is fully involved and 32% said it is partially involved.

The survey collected responses to assess succession planning and wealth management practices. The report notes a shortfall in formal succession readiness in the U.S. compared with global peers and frames those findings within broader estate and business transfer planning.

Surveyed family offices reported an average client net worth of $2.7 billion. The most common function provided in-house was strategic asset allocation, with 86% keeping it internal and 12% outsourcing. Bookkeeping and accounting were handled in-house by 67% and outsourced by 31%. Lifestyle services were provided in-house by 36% and outsourced by 16%.

Other functions were more frequently outsourced. Cybersecurity was kept in-house by 26% and outsourced by 52%. Tax planning was handled in-house at 33% and outsourced at 59%. Art and collection management was provided in-house by 26% and outsourced by 12%.

On investment strategy, many respondents planned to keep allocations largely unchanged from the prior year. Respondents identified geopolitical conflict as the top risk for the coming year, cited by 64%, and nearly half expressed concern about a potential global trade war.

U.S. family office respondents reported allocating 29% of client portfolios to equities in developed markets and 7% to fixed income in developed markets. Alternative assets featured in U.S. allocations, with 20% in real estate, 10% in direct private equity investments and 10% in private equity funds of funds.

The report also outlines how the sector has broadened. Industry guidance referenced in the report indicates U.S. single-family offices typically serve families with at least $250 million in net worth, while many multifamily offices now work with groups of families whose individual minimum net worths can be as low as $25 million. UBS released these findings in its latest annual Global Family Office Report.