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UBS: half of family offices not ready for generational wealth transfer

UBS: half of family offices not ready for generational wealth transfer

Nearly half of global family offices are not prepared for generational wealth transfer, with 45.7% lacking a succession plan.

That's according to the Global Family Office Report 2017, conducted by Campden Wealth Research in partnership with UBS.

‘Only 30 percent of generational transfers are successful, so this is an existential issue,’ said Sara Ferrari, head of the global family office group at UBS.

The study revealed that just 32.7% of global family offices have a written succession plan in place, with a further 14.6% relying on verbally agreed plans.

Global family offices take a range of actions to prepare for generational wealth transfer, including work experience in the family office (57.9%), external training at investment banks (44.3%), structured investment training (30.7%) or involvement in philanthropy or impact investing (37.9%).

ESG appeal

The combined portfolio of global family offices returned 7% in 2016, up from 0.3% in 2015, and was driven by the strong performance of equities and private equity in the face of subdued results from real estate and hedge funds.  

At the moment equities (27%) and private equity (20%) make up almost half of the portfolio of the average family office.

Unlike their North American and Asian peers, European family offices are the most likely to focus on balanced investment approaches.

In the meantime more than 40% of family offices expect to increase their impact and environmental, social and governance (ESG) investments.

This supports the report's findings from last year, which noted that families with children born after 1980 will see an increase in requests to participate in impact investing.

Those family offices that are already active in the ESG and impact investment space typically implement their allocation via private investment and private equities. The most popular sectors are education, environmental conservation and energy/resource efficiency.

Almost 95% of family offices plan to maintain or increase their philanthropic commitments in the coming year. More and more attention is dedicated to environment protection and poverty.


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