Morgan Stanley has released its new Future-Ready Family Office report, which identifies six key areas for family offices to embrace to position themselves for growth — including advice on how to integrate artificial intelligence into their operations.
The report suggests that AI tools can currently be used to support a family office’s efforts in deal sourcing, investment analysis, portfolio construction and concierge services such as booking travel. Another study from Schroders in October found that 47% of family offices have started using AI to improve decision-making and internal processes.
“If a family office wants to start using the free version of ChatGPT or another generative AI platform, it’s important to avoid putting confidential or sensitive information into this open platform,” the Morgan Stanley report states. “Instead, inputting information from publicly available sources, such as SEC filings, can be a practical way to explore AI’s analytical capabilities.
"Users should remember, though, that because AI is scraping content from the internet, that information may not always be reliable.”
In addition to responsible AI use, the five other main takeaways from the report are maintaining a flexible governance structure, staffing the family office like an institution, building robust data sources for investments, prioritizing cybersecurity and supporting financial education programs for students and younger generations.
“The emphasis on flexible governance structures that adapt to generational and cultural changes, alongside the strategic use of advanced technologies like AI, marks a significant moment," said Stephanie Crombie, head of family office client management at Morgan Stanley. "Institutionalization of the family office as it evolves is the new priority.
“A proactive stance on cybersecurity and the integration of robust educational programs for financial literacy are pillars in a much more holistic approach to safeguarding and enhancing family wealth, one that reframes how we think about family and institutional structures. A dynamic and future-centric focus requires remaining adaptive to stay relevant and secure in a rapidly changing world.”