By Claire Moraa
- Americans with liquid investable assets over $1M has skyrocketed by 62% in the past decade, surpassing 5.5 million individuals
- Family offices are estimated to manage around $5.5T in wealth–66.7% increase in the last five years
Stocks and bonds are no longer the go-to investment option. The crème de la crème are exploring alternative investment opportunities and family offices seem to be quenching their thirst. In just five short years, family offices have jumped from managing $3.3 trillion to $5.5 trillion. And that’s not all. By the close of this decade, the wealth managed by family offices will increase to 189%.
Why This Matters: Over 5.2 million people joined the millionaires club in 2023 which means they’re actively seeking tailored solutions for their growing financial needs. But why family offices? Aside from the perks of discretion and better risk management strategies, market instability for one is reason enough to shy away from high-return and high-risk investments. Cryptocurrency has been on a downward spiral lately so it’s no surprise anyone seeking to diversify their portfolios would opt for low-risk opportunities. To add salt to the injury, crypto scams have also been on the rise with over $12.5 billion lost to online scams.
Family offices offer services such as investment management, estate planning, philanthropy, and lifestyle management, all tailored to the specific needs and goals of the family. Additionally, family offices provide privacy and control over financial matters, as well as the potential for multigenerational wealth preservation and transfer. A lot of boomers are set to retire with no saving and no retirement funds so it’s a no-brainer why family offices are becoming the first choice since they offer long-term investment strategies which prioritize sustainability and legacy building.
Situational Awareness: As more individuals reach millionaire status, there’s a greater need for sophisticated wealth management solutions, prompting many to turn to family offices for personalized services. The future of family offices will likely evolve to involve a combination of traditional wealth management practices and innovative solutions to address the evolving needs of the ultra-wealthy and rope in individuals of different wealth statuses.
CBX Vibe: ‘Family Affair‘ Mary J Blige
