For family offices worldwide , preserving their wealth is their top priority and managing their risks is their biggest concern, according to J.P. Morgan’s latest Family Office survey.

 

On crucial areas of investment considerations, an overwhelming 73% noted that preserving wealth is the most important aspect of managing their investments. An additional 22% identified maximizing returns as highly important.

 

Challenges identified by the family offices in the survey included measuring portfolio risk (25% said this is most challenging), and when it comes to other concerns outside of traditional investing, 30% said acquiring other businesses. At a time when regulatory shifts in the financial landscape are ever looming, respondents also identified evolving tax and regulatory environments as an area they are most concerned about in terms of risks to managing investments (23%), compared with market volatility (10%). About 40% of respondents said when engaging with a financial institution for investment advice, the top concern is around level of service, while 33% viewed transparency as the second-biggest concern.

 

Samy Dwek, head of the J.P. Morgan family office solutions EMEA team commented on the findings of the survey: “Serving family offices is about sharing best practices, and this survey focusses on just that. The information compiled in the survey enables global family offices to share what is top of mind with their peers, and more importantly, gives guidance to those looking to set up a new family office.”

 

Kenny Foo, head of wealth advisory group of J.P. Morgan Private Bank Asia said: “In Asia, we are witnessing a growing interest in setting up family offices.  Rather than blindly copying European and American models, many Asian families are adapting various elements to suit the particular business, cultural, familial and socio-economic environments they operate in.  For such families, the survey presents useful reference points and contextual insights.”

 

When it comes to philanthropic strategies and activities, 36% of respondents said their family members engage in family foundation with charitable missions, followed by 27% who partake in significant annual giving to one or more causes. The survey also found when it comes to making final investment decisions, 44%  find decisions are made by the principal and 42% by an investment committee.

 

The 2012 survey, undertaken by J.P. Morgan Private Bank, was conducted with more than 120 single family offices across the globe with more than US$100 million in assets under management. The study, which focussed on three key topics — structure, investing, and succession and governance planning — was conducted to find out more about what motivates family offices and to provide a collective insight to help family offices learn from each other.