At Capital Hedge via our FINTRX Platform, we’ve had a firsthand look at the growth of the family office space. Another recent development in the expansion of family offices is the launch by UBS of a 'strategic toolkit' it believes will engage a generation of heirs that need help managing their wealth. The Swiss bank noted that 70% of family offices expected to see a generational handover within the next 15 years. It added that the Family Office Compass, developed in conjunction with the Cambridge Institute for Family Enterprise, will assist families to keep the younger generation interested.
SFOs will be offered guidance on how to set up modern offices and acquire a perspective on the strategic role of their affairs beyond traditional and short-term wealth management.
From UBS's head of global UHNW Josef Stadler: "Currently, only 30% of generational transfers are successful, so we urge families to think strategically about how they can use a family office to support continued wealth preservation and growth across generations." There are 5,300 SFOs around the world catering to individuals with $100 million or more in investable assets, according to new research by Campden Wealth. Clearly, family office numbers are growing and need strategic and thorough management.
Some 740 family offices globally are owned by UHNW individuals with assets of $1 billion or more in investable wealth. Based on these figures, UBS estimates that 65% of European billionaires have a family office, as opposed to 50% in North America and 34% in Asia Pacific.
John Davis, Founder and Chairman Cambridge Institute for Family Enterprise, Harvard Business School, added: "Successful families need to grow their assets well above their consumption rate, but they also need to maintain unity in decision making and develop both family and non-family talent to achieve these objectives. Failure to do so can slow the family down, and in prolonged cases signal the end of a family's wealth.”
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