Here are three recent developments related to family offices, the private wealth management firms catering to ultra-high-net-worth individuals:
Focus on Simplicity and Adaptability: According to J.P. Morgan Private Bank’s 2024 Global Family Office Report, family offices are increasingly seeking simplicity, flexibility, and the ability to adapt to changing market conditions. The report highlights that the average portfolio is targeting an 11% return, with a significant 45% allocation towards alternative investments like private equity, real estate, venture capital, and hedge funds. Additionally, cybersecurity remains a concern, with 25% of family offices reporting exposure to cyber threats.
Succession Planning and Private Equity: A Deloitte report emphasizes that succession planning is becoming a critical focus for family offices in 2024. Many offices are addressing concerns about their preparedness for leadership transitions by enhancing training programs, increasing staffing, and outsourcing various roles. This approach aims to ensure a smooth generational handover and maintain the family legacy.
Increased Operational Costs: The J.P. Morgan report also notes that the annual operating cost of running a family office averages around $3.2 million. Key cost drivers include recruiting and retaining talent, which are seen as vital to successfully managing the complexities of family office operations.
These insights reflect ongoing trends and priorities within the family office sector, particularly focusing on adaptability, leadership continuity, and the integration of alternative investments into portfolios.
This communication is for informative purpose only. Damalion focused on advising families for wealth preservation by identifying opportunities and challenges. Please contact your Damalion expert now.
