What issues will family offices face this year? The family office leaders and experts we asked cited a broad range of challenges and opportunities, many of which stem from the same sources, including artificial intelligence, the great wealth transfer and NextGen engagement.
I see significant opportunities to enhance the engagement of the rising generation through targeted development and educational initiatives. Additionally, the evolving tax and investment landscapes, particularly in light of the recent election outcomes, present valuable opportunities for strategic action. Lastly, the rapid pace of technological advancements, including the adoption of AI and digital platforms, offers transformative opportunities for efficiency and family engagement. However, challenges persist in securing and retaining qualified talent.
— Jill Barber, President, CYMI Holdings, LLC
- Successful leadership transition planning and execution across generations for both family office leaders and family members.
- Multiple technology challenges across reporting, client experience, employee experience and cybersecurity.
- Almost every family office we know faces service expansion challenges as the number of households grows and the amount of assets to support them remains flat or declines.
— Andy Busser, President & CEO, Pitcairn
When it comes to education in family business, there tends to be a focus on wealth management. Never underestimate or give short shrift to the interpersonal skills. Practice and feedback on skills such as negotiation, conflict resolution and decision making are key elements to a healthy family business.
— Elizabeth Chapman, Principal Program Lead, Cathy Family Office, Chick-fil-A, Inc.
As many family offices seek to increase their exposure to private investments through direct participation, family offices face the challenge — and opportunity — of how to take advantage of their entrepreneurial spirit while also implementing proper governance structures. Family offices have the unique benefit of nimble decision making and strong business skills in the sectors where family principals found success, but without governance, “shooting from the hip” can place the family at risk during forays into new investments. On the other hand, not displaying and exercising the entrepreneurial skills that have led to the family’s success is a missed opportunity and a sure path to lacking differentiation from nonfamily private investors. As families increase their exposure and develop more experience in private investing, I think it’s critical for them to develop their own unique voice, informed both by their own entrepreneurial spirit as well as best practices in governance.
— Anthony Contrucci, President, First Bancshares & Managing Partner, 119th Street Capital
One of the greatest challenges and opportunities in serving UHNW families is helping family members not only think about, but also take, proactive steps that will have lasting impact, both financially and interpersonally, for the family in the next five, 20, 50 and even 100-plus years from now.
— Drew Egan, Director of Family Education, Truist Wealth’s Center for Family Legacy
The evolution of the SFO can be seen as a challenge and an opportunity. As we continue to enter the largest wealth transfer in history, a new administration and new advances in technology, I think the SFO will need to evolve to fit the changing needs of the family. The newer generations communicate differently, request different office services and still need to be educated and brought to the table. Today, the SFO staff must be flexible and forward-thinking in order to serve multiple generations, branches and personalities. A key to success: what works for your SFO does not necessarily work for another. All SFOs are unique in their offerings and serve a purpose.
— Celine Fitzgerald, Fitzgerald Family Foundation President, RisingGen Coach & Facilitator at In Three Generations
We prioritize value investing, impact investing and long-term strategies rather than reacting to macroeconomic trends. That said, family offices must remain vigilant about geopolitical developments and have robust contingency plans for black swan events. So, navigating those risks and their potential fallout remains a significant challenge. On the opportunity side, the enormous potential of AI stands out, both in primary tech companies and the broader sectors it will transform. Family offices that position themselves well in this space can achieve exceptional returns long term while driving innovation.
— Vishal Harishchandra, Chairman & CEO, The Valkin Group
I think the biggest challenges (and corresponding opportunities) are likely around issues that have been ebbing and flowing for the past few years, and then some:
- AI — Where does it fit as an opportunity, where does it sit as a threat?
- Cybersecurity — Not entirely unrelated to AI, of course, but the threats just keep coming. How do we protect the family, the family office, etc.?
- Technology — How do family offices continue to respond to an ever-growing number of applications to meet an ever-growing list of needs?
- Family office succession — How do family offices think about succession, not only of family office staff, but of succession of the family office to successive generations?
- Family office value — As the great wealth transfer continues, and perhaps speeds up, how are family offices educating family clients about, and demonstrating, the value of the family office?
- The usuals — Investment issues, tax and estate issues, risk management issues.
— Josh Kanter, President, Chicago Financial, Inc. and Founder & CEO, leafplanner
- Navigating an uncertain economic environment; remaining nimble to respond to and take advantage of changes.
- Implementing AI securely and swiftly.
— Amy Lynch, CEO, K&S LLC
Cybersecurity will be a constant focus for 2025. Engaging the rising generation will continue to be a challenge and opportunity, which includes succession of family leadership.
— Joshua S. Miller, President & CEO, Acadia Management Co.
There are a few areas of challenges that I see for 2025. The first is continued economic uncertainty. Inflation, regulatory measures, global unrest, private market valuations… These are not likely to dissipate in 2025, and family offices, especially new offices who may be prone to making shorter-term changes at the potential expense of the long term, will need to keep their eyes and ears open. Cybersecurity will also continue to be a huge challenge at both the family office level and for the individuals they serve. And of course, succession and transition at the family office and family level will remain a top challenge as the ‘great wealth transfer’ continues.
As far as opportunities — I think the younger generation will demand more focus on impact investing, which could be very interesting. Additionally, advances in technology will make running the office, communicating with family members and maybe even educating family members easier. Finally, while family governance and succession planning is a challenge, it is also an opportunity. I think more family offices will continue to focus on this, and (hopefully!) seek out assistance from professionals, as the market of professionals increases.
— Bryn Monahan, Senior Consultant at Relative Solutions, and 4th Gen Family/Board member, Foster Holdings
Opportunities continue to revolve around the differentiation in access to investment offerings. There is a heightened interest in private direct investments as well as private equity. Operational and strategic challenges include the complex task of ensuring smooth leadership transitions across generations, even as biotechnology, AI and early disease detection will likely increase lifespans significantly. Family offices will be expected to help their families navigate evolving market conditions, intergenerational dynamics and a host of rapid advancements that will redefine industries and trigger both new opportunities and new risks.
— Thomas Ruggie, Founder and CEO, Destiny Family Office
We see a few challenges for this year, including:
- Tackling private investing and the best way to go about doing it (directs and/or funds) based on FO context and characteristics.
- Incorporating cryptocurrency and AI investments.
- Adjusting to interest rates and inflation.
- Geopolitical instability.
- Cybersecurity threats.
- Continuing efforts towards succession and NextGen engagement.
- Implementing AI tech within the family office.
— Scott Saslow, Founder and CEO of ONE WORLD Investments
Competing with private equity continues to be a big challenge given how much money is available in the market.
— Joe Tracy, CEO, Dot Family Holdings
