Ocorian: Family Offices are becoming more professional but face more complex challenges
Ocorian: Family Offices are becoming more professional but face more complex challenges
Family offices have become significantly more professional in their governance, management and infrastructure over the last five years but need to be prepared for further challenges ahead, new global research from Ocorian shows.
Its international study among more than 300 family office professionals, collectively responsible for around $155 billion assets under management, found more than eight in ten (85%) say their family office has become more professional in its operations and structure over the past five years. Of these, 19% say it has become much more professional and 15% say it was already professional and didn’t need to improve much.
Family offices have become more professional in a number of different ways - around half (53%) have developed a stronger succession plan and 48% have strengthened the family constitution or charter, or introduced one for the first time. Almost half (46%) have secured the support of more professional third parties and 45% have strengthened the management team that runs the family office.
Around 41% say they have developed a more diverse and professionally managed investment portfolio while 40% have strengthened compliance, tax and legal infrastructure. Around a third (34%) say they have developed a more cohesive and robust philanthropy programme and 11% say they now have much better oversight of all the assets owned by the family office.
But despite this increased professionalism family offices still face significant challenges, family office professionals surveyed say. The key challenge identified is ensuring they have the right governance in place to enable them to meet the needs and expectations of family members, such as giving each member the ability to be heard which was cited by 86%. This is followed by ensuring their investment portfolio is properly managed and aligned with the risk and return profile of the family (59%). The third biggest challenge is around having a robust family succession plan in place.