Why Family Offices Matter More Than Ever

The rise of ultra-high-net-worth (UHNW) individuals has quietly redrawn the global financial landscape. And at the heart of this change? The family office. The 2024 Global Family Office Report by J.P. Morgan reveals a world where these offices aren't just managing money—they’re shaping legacies.

In 2024, the average family office supervised around $864 million in assets. While many think of them as investment hubs, the truth is more complex. Family offices have become strategic units handling everything from governance to succession and cybersecurity—though not all are equally prepared for the challenge.

If there's one number that jumps off the page, it's this: 45%. That's how much of the average portfolio is allocated to alternative assets like private equity, hedge funds, and real estate. Family offices are increasingly playing the long game.

Interestingly, investment decisions remain deeply personal—almost half of all surveyed families said their principal (often the patriarch or matriarch) still makes the final call. In the U.S., that number spikes to 56%.

Even as technology and advisors play bigger roles, families remain firmly in control of their investment destiny.

Governance and Succession: The Unfinished Business

Now here's the paradox: nearly 70% of family offices say that preparing the next generation is a top goal—yet 29% admit they have no formal process in place. That’s like having a treasure map but never showing it to your heirs.

Governance structures are gaining traction, but implementation lags. The reasons? Fear of conflict, lack of guidance, and the sheer complexity of navigating family dynamics.

Where the Gaps Are: Cybersecurity, Education, and More

Despite handling billions, family offices often fall short in digital defense. One in four has faced a cyber breach, yet 20% still have no cybersecurity program. It’s a digital age Achilles’ heel.

And the gaps don’t end there. One-third of offices cite deficiencies in family governance, succession planning, and wealth education. These aren’t minor oversights—they’re cracks in the foundation.

How Much Does a Family Office Really Cost?

You might be wondering: what does it take to run a family office? The answer—on average—is $3.2 million per year. Larger offices spend north of $6 million, and about 25% report annual costs exceeding $10 million.

Smaller offices, naturally, operate leaner, but the trend is clear: professionalization is up, and so are costs.

Looking Ahead: The Next Generation of Family Offices

The future belongs to those who adapt. Offices that embrace digital tools, diversify wisely, and prepare their heirs stand a better chance of preserving not just wealth, but legacy.

What’s changing fast is the clientele. We’re seeing younger founders, tech entrepreneurs, and diverse families stepping into this space. Their needs—and expectations—are different. The challenge now is evolving the family office model to serve a new era.

Key Takeaways

The 2024 Global Family Office Report reads like both a mirror and a map. It reflects today’s realities—complex, promising, and at times, unprepared. But it also charts a course forward, highlighting where family offices must invest in more than just financial assets.

For families navigating the intersection of wealth and purpose, this report is as insightful as it’s essential to read.