What family offices need to do to successfully compete with traditional wealth management firms

A family office is a private wealth management advisory firm established by an ultra high net worth individual (ultra-HNWI) for the purpose of managing their family’s private wealth. Any firm that provides investment advice only to family members, is wholly owned and controlled by family members, and does not hold itself out to the public as an investment advisor is considered a family office by the U.S. Securities and Exchange Commission. However, a family office goes beyond just managing wealth. It also helps secure a family’s financial future by building, preserving, and transferring family wealth and legacy.

This paper explores how the growth in family offices has resulted in private wealth management firms offering family-office type services for ultra-HNWIs, putting family offices directly in competition with private banks. Additionally, family offices have new opportunities for expansion from the rise in ultra-HNWIs, but they also struggle with regulatory, operational, and technological challenges which may slow down growth.