The great wealth transfer looks to be a source of great trouble for family offices, as 54% say their next generation is insufficiently qualified to assume control of their family operations.
That’s according to the 2024 North American Family Office Report by RBC and Campden Wealth, which surveyed 360 family offices worldwide. The survey's leadership question refers both to the family office and family business and to protecting family legacy.
"While many families invest heavily in the education and personal development of the next generation, there is often a gap between formal education and the real-world skills needed to manage a family office or business," said Adam Ratner, director of research at Campden Wealth. "This gap may stem from the complexity of global markets, the nuances of family dynamics or simply a lack of exposure to leadership roles early on."
Besides the concerns of inadequacy, 42% of respondents said their next-generation members were too young to currently assume leadership roles within the family office.
"Bridging this gap will require a more deliberate approach to succession planning, involving mentorship, early involvement in decision-making and tailored financial education," Ratner said.
Of the single- and multi-family offices surveyed, 183 are in North America. The study found that 53% of those family offices have a succession plan in place, but just 30% have formalized their plans in writing. The remaining 47% have no plan at all.
About $84 trillion is expected to be passed down by U.S. families through 2045, according to Cerulli Associates. In RBC and Campden’s survey, 60% of family offices said they expect their next generation to assume control in the next 10 years. Families who participated in the survey had an average wealth of $1.5 billion.