Two in five of the families that responded to a survey from Citi Private Bank expect a significant leadership transition – involving the family, the family office or both – in the next five years. Nearly three-quarters (72%) say they are well prepared or very well prepared for this transition.
This is just one of the insights into family governance from Citi Private Bank’s recently released 2024 Global Family Office Survey Insights. The report also asked what roles the head of the family office plays. The top cited role was investment manager (85%), followed by risk manager (56%), service integrator (39%), and family unity and continuity manager (36%).
Since families do not seem overly worried about leadership succession, what are their concerns? The top three, according to the survey:
- Preserving the value of their assets: 71%
- Preparing the next generation to be responsible wealth owners: 59%
- Ensuring shared goals and vision for the family’s future: 47%
The survey also looked at families’ formal governance structures — which are well developed when it comes to investments but less so for other issues. It found that 69% of families have formal governance for the investment function, though almost half (48%) do not have an investment policy statement. However, fewer than half have formal governance for the family (44%), the family office beyond investing (44%), or philanthropic activities (35%).
The survey also looked at the top challenges faced by family offices:
- Meeting the needs and expectations of family members: 54%
- Adapting to market conditions: 47%
- Implementing technology solutions: 40%
- Managing costs: 38%
