UBS’ newly released 2024 Global Family Office Report revealed that most family offices need to better prepare to address potential challenges to their governance, success planning and staffing.
Judy Spalthoff, UBS' managing director and head of family office solutions, told Crain Currency that many family offices should shift their thinking and view risk management more holistically.
Among the report's findings, 59% of family offices say they have measures or procedures, or both, in place to deal with financial risk and 40% to handle economic risk. But only 24% focus on reputational risks, and just 14% address medical risks and travel emergencies.
Furthermore, planning is inadequate for “key person” risk and overall succession planning. Among respondents, 39% of family offices say they currently have a plan to address “key person” risk within the family office, yet only around a quarter have a succession plan for the family office to deal with business risks such as continuity of staff and services.
“It’s not just the financial capital,” said Spalthoff. “It’s also the human and intellectual capital that the family needs to be looked after holistically.”
In terms of investing, the report also indicated that family offices followed through on their plans to make material shifts to asset allocation from the previous year, rebalancing portfolios and making allocations to developed-market fixed income. Also, because of commercial real estate prices, families have pulled back for the moment in that sector, awaiting a correction in the market.
This year’s UBS report had its largest amount of responses to date — from 320 single-family offices across seven global regions, representing families with an average net worth of $2.6 billion.
