reveals family office survey findings
Preserving wealth top focus in managing investments
Regulatory and tax environments an area of key concern across global family offices
The 2012 survey, undertaken by J.P. Morgan Private Bank, was conducted with more than 120 single family offices across the globe with more than $100 million in assets under management. The study, which focused on three key topics — structure, investing, and succession and governance planning — was conducted to find out more about what motivates family offices and to provide a collective insight to help family offices learn from each other.
The survey asked respondents about crucial areas of investment considerations and found an overwhelming 73 per cent noted that preserving wealth is the most important aspect of managing their investments. An additional 22 per cent identified maximizing returns as highly important.
Challenges identified by the family offices in the survey included measuring portfolio risk (25 per cent said this is most challenging), and when it comes to other concerns outside of traditional investing, 30 per cent said acquiring other businesses. At a time when regulatory shifts in the financial landscape are ever looming, respondents also identified evolving tax and regulatory environments as an area they are most concerned about in terms of risks to managing investments (23 per cent), compared with market volatility (10 per cent). Two-fifths (40 per cent) of respondents said when engaging with a financial institution for investment advice, the top concern is around level of service, and a third (33 per cent) viewed transparency as the second-biggest concern.
Samy Dwek, Head of the J.P. Morgan Family Office Solutions EMEA team commented on the findings of the survey: “Serving family offices is about sharing best practices, and this survey focuses on just that. The information compiled in the survey enables global family offices to share what is top of mind with their peers, and more importantly, gives guidance to those looking to set up a new family office.”
When it comes to philanthropic strategies and activities, 36 per cent of respondents said their family members engage in family foundation with charitable missions, followed by 27 per cent who partake in significant annual giving to one or more causes. The survey also found when it comes to making final investment decisions, 44 per cent find decisions are made by the principal and 42 per cent by an investment committee.
Paul Knox, head of Wealth Advisory EMEA at J.P. Morgan Private Bank added: “No two family offices look alike as they are created to serve the needs of a specific family and evolve to reflect the needs of different generations. This survey highlights the challenges for family offices in servicing the needs of multi-generational and, often, multi-jurisdictional families and the need for high quality governance and professional advice to ensure preservation of the family wealth.”
J.P. Morgan’s own Family Office Solutions Team in Europe, Middle East and Africa (EMEA) focuses on single family offices with a net worth of over $500 million across the EMEA region, providing the full breadth of J.P. Morgan’s network and investment capabilities.