Family Opportunities: UBS Global Family Office Report 2023

What is this Report?

The report is the 4^th annual global family office report by UBS. The report provides comprehensive research on family offices throughout the world. Participating in the study were 203 family offices, each with an average $2.2B net worth.

What are key findings from the article?

• According to respondents, 63% of family office’s main purpose is to support generational transfer of wealth; 55% to provide income to family members. Interestingly, 27% of family offices emphasize giving back to society/philanthropy. Sixty percent of family offices keep philanthropy activities in house; but 13% of family offices outsource it. Unfortunately, 27% do not provide any philanthropic services.

• Family offices are turning a closer eye to sustainability investing such as Environmental, Social and Governmental (ESG) initiatives and impact investing. They are moving away from “exclusion-based strategies” such as not investing in carbon-heavy industries like oil and gas.

• Even though there will be a giant generational transfer of wealth, few family offices have a succession plan. Only 42% of family offices have a succession plan in place for family members and fewer have a governance framework.

• Fifty-six percent invest in digital assets, including cryptocurrencies and distributed ledger technology (Blockchain). But only 38% have less than 1% invested. In 2023, 35% of family offices already invested in digital assets are looking to increase their investments: 27% in cryptocurrencies and 25% in decentralized finance.

• Seventy-five percent of families offices are interested in investing in digital transformation, which aims to integrate digital technology into all parts of business. Sixty-seven percent are interested in investing in medical devices/healthtech and 64% in automation and robotics. Interestingly 61% of family offices are interested in green tech, 45% are interested in making investments in water scarcity, 39% in circular economy and 21% in the metaverse.

What can I do as a result?

• Develop a plan to identify and track family offices in your donor pool. Given that single-family offices have a minimum of $100M in assets, the number of family offices are increasing, and that 73% of family offices engage in some philanthropy whether in-house or outsourced, family offices present a great opportunity for your organization’s fundraising.Do you know which prospects have family offices? Do you have an approach to understand their philanthropic planning and objectives?

• Given the interest in sustainability and adjacent topics including water scarcity and green technology, it may be worth looking into ways a family office could invest with your organization in an impact investment. If you don’t have the resources to handle this in-house, you can look for partners, such as your local community foundation.

• Considering the lack of succession plans in family offices, it may be worth considering if your organization has the capability to provide educational programming on the topic. You can bring in experts in family business succession, finance, tax, and more as a service for prospective donors.

Additional Resources

• Global Family Office Report  l UBS 2023 – Requires free login to download
• Image Conscious Philanthropists | Jen Filla Blog | 2022
• Book Review | The Wealth Hoarders: How Billionaires Pay Millions to Hide Trillions l Aspire Research Group Blog 2022
• Get Personal and Deliver Impact: Reviewing Capgemini 2022 World Wealth Report l Aspire Research Group Blog 2022