J.P. Morgan Private Bank report reveals how wealthy families can adapt in a complex world
New Global Family Office Report highlights governance, succession planning, investment management and cybersecurity as key areas of concern
In the face of ongoing global uncertainties and an increasingly complex and changing economic and investment landscape, exceptionally affluent families are keener than ever to achieve long-term success and financial returns. Many are taking strategic, sophisticated approaches to achieve their goals, according to J.P. Morgan Private Bank’s “2024 Global Family Office Report”.
The report, which surveyed 190 single-family offices globally, reveals the challenges that ultra-high-net-worth (UHNW) families face in an increasingly complex global landscape, including issues around family governance, preparing the next generation of family leaders, and concerns around cybersecurity.
While many families have employed the right financial acumen to meet these challenges, overall progress is uneven. Nearly three-quarters of the UHNW families surveyed have taken measures towards developing an effective governance model – by establishing an investment committee and board of directors, for example – although 27 per cent have not.
Every family is different and each has its particular multigenerational and multicultural needs. The more complex the relationships and the broader the family assets, the greater the need for a formal structure to manage the decision-making process, says Paul Knox, managing director and senior wealth advisor at J.P. Morgan Private Bank, Asia. “The whole basis of family governance is that you understand and address the different interests of the people involved in the family business or directly involved in managing the family wealth.”
The private bank’s extensive knowledge in tailoring governance structures is key to engaging with UHNW clients and working to meet their unique goals. “A lot of learning comes from other families that we’ve worked with that have done this successfully,” Knox says. “But the biggest challenge is to help families understand and identify the issues around governance. Some families may meet regularly, and while there is real bonding and camaraderie, they may not necessarily tackle the important issues. A more routine and formal gathering may allow family members to contribute differently.”
