The number of ultra-wealthy individuals is growing around the world. As a result, family offices are becoming more popular and important. These special groups help rich families manage and increase their wealth.
A recent survey of 338 family offices shows that the world’s wealthiest families are investing more in stocks and bonds than in cash. In the past year, 43% of family offices put more money into public and private stocks. Half of them also increased their investments in bonds.
Even though high interest rates are a concern, investments in real estate stayed steady for the second year in a row. Richard Weintraub, who leads Citi Private Bank’s Family Office Group in the Americas, said that last year, over 95% of clients expected good returns this year. And that happened in the past 12 months.
He noted that these smart family offices expect another good year in the markets. It is estimated that family offices currently hold $5.5 trillion in wealth. This is a big jump from $3.3 trillion in 2019.
Experts think this wealth will grow by 189% by 2030.
Family offices boosting stock investments
But it can be hard to define exactly what a family office is or how it works.
Weintraub explained that the term “family office” is like saying “red car.” It doesn’t tell you the size of the engine or how many wheels it has. Family offices can be very different in size. Some may have just a few employees, while others may work with over 100 advisors.
The main benefit of a family office is that it allows families to have control over how their wealth is managed. This helps them preserve their assets for many generations. It also helps them avoid the risks of investing too much or too little by managing everything together in one place.
Family offices also handle many concerns beyond just financial investments. These can include charity work and art collecting. Weintraub pointed out that your own investment team will follow the guidance you give them.
This makes sure that the family’s wealth management matches their overall goals and values. In summary, as the ultra-wealthy look for ways to manage and grow their large fortunes, family offices are becoming an increasingly popular choice. They offer control, stability, and complete management of the family’s assets and interests.
