Family offices are placing greater emphasis on succession planning as the influence of the next generation drives increased interest in sustainable investment, according to a new report.
The impact of Covid-19 has accelerated the integration of succession planning into long-term strategies of family offices. And as a result, younger generations are gaining a bigger influence on investment planning, according to the study from Aeon Investments, a credit-focused investment company based in London.
The firm commissioned market researcher Pureprofile to interview 100 senior investment managers and wealth managers working for family offices with a total of US$98.4 billion assets under management in the United Kingdom, the United States, Switzerland, Germany, Italy and the Nordic region in November 2022.
The study finds that 39% of respondents strongly agree that younger family members are driving increased interest in sustainable investment. Another 58% slightly agree.
And in view of the impact of the pandemic, family offices are increasingly diversifying into a wider range of asset classes to meet investment goals, according to 88% of respondents.
While 44% of family offices plan an inter-generational wealth transfer within 10 years, nearly a quarter (23%) do not expect to make such transfers for 15 years or more.
“Family offices are understandably placing a strong emphasis on succession planning, but it is clear from the research that the next generation is already having an impact with a greater focus on sustainability,” says Aeon chief operating officer Ben Churchill. “At the same time there is clear evidence that family offices recognize the need for increasing diversification into a wider range of asset classes.”