Regulation, not market volatility, worries single family offices

Single family offices around the globe are more concerned about tax and regulatory issues than the turbulent market environment, according to research by JP Morgan Private Bank.

A survey of 125 SFOs, where each had assets under management of more than $100 million (€79.5 million), found that 23% were “most concerned” about the evolving tax and regulatory environments, while only 10% considered market volatility to be their biggest concern.

Other concerns included the geopolitical landscape (22%), spending levels of family members (5%) and family discord (4%).

When it came to managing investments, preserving wealth was important for 73% of the family offices surveyed, while around a fifth said maximising returns was essential.

The majority of the family offices said measuring the risk of their investment was the biggest challenge, followed by gaining access to top level managers.

Paul Knox, head of wealth advisory for Europe, Middle East and Asia at JP Morgan Private Bank, reckons the survey has made clear the various difficulties being faced by family offices.

“No two family offices look alike as they are created to serve the needs of a specific family and evolve to reflect the needs of different generations,” he said.

With regards to making the final investment decisions, 44% were made by the family office principals, 42% by the investment committee and 14% by the chief investment officer, found the study.

Of the family offices surveyed, 40% were based in Europe and the Middle East, 10% in Asia, 35% in the US and 15% in Latin America.