Wealth preservation most important for family offices

Preserving wealth is the most important aspect of managing investments, according to a Family Office survey conducted in March by J.P. Morgan Private Bank.

The poll of more than 120 single family offices across the world, each with more than $100m in assets under management, focused on three key topics – structure, investing, and succession and governance planning.

Its aim was to find out what motivates family offices and to provide a collective insight to help family offices learn from each other.

The survey found 73% considered preserving wealth the most important aspect of managing their investments. An additional 22% identified maximizing returns as highly important. Other challenges included measuring portfolio risk (25% said this is most challenging), and outside of traditional investing, 30% said acquiring other businesses.

Regarding final investment decisions, 44% find decisions are made by the principal and 42% by an investment committee.

Respondents also identified evolving tax and regulatory environments as an area they are most concerned about in terms of risks to managing investments (23%), compared with market volatility (10%).

Two-fifths (40%) said that when engaging with a financial institution for investment advice, the top concern regards the level of service, and a third (33%) viewed transparency as the second-biggest concern.

When it comes to philanthropic strategies and activities, 36% of respondents said their family members engage in family foundation with charitable missions, followed by 27% give significant amounts annually to one or more causes.

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