Ocorian, a provider of services to high net worth individuals and family offices, financial institutions, asset managers and corporates, has just released a new study drawn from interviews with family offices globally. It examines how they have become more professional and assesses the challenges they face.

Family offices have become more professional in their governance, management and infrastructure over the last five years but they need to be prepared for challenges ahead, new global research from Ocorian shows.

Its international study among more than 300 family office professionals, carried out by independent research company PureProfile β€“ collectively responsible for around $155 billion assets under management β€“ found that 85 per cent of respondents believe their family office has become more professional in its operations and structure over the past five years.

According to the research, family offices have become more professional in a number of different ways: around half have developed a stronger succession plan; and 48 per cent have strengthened the family constitution or charter, or introduced one for the first time. Almost half have also secured the support of more professional third parties and 45 per cent have strengthened the management team that runs the family office, the firm said.

But despite this increased professionalism, family offices still face challenges, the research reveals. The key challenge identified is ensuring that they have the right governance in place to enable them to meet the needs and expectations of family members, such as giving each member the ability to be heard – which was cited by 86 per cent.

This is followed by ensuring that their investment portfolio is properly managed and aligned with the risk and return profile of the family. The third biggest challenge is having a robust family succession plan in place, Ocorian said.

As global regulatory demands facing family offices constantly change and increase in complexity, over a third of family office professionals surveyed said that navigating regulatory compliance issues is one of the biggest challenges they face.

β€œIt is extremely positive that so many family offices have taken significant steps in becoming more professional over the last five years, and it is certainly the biggest trend I’m seeing with my UK clients. I’d suggest this rapid and widespread professionalization is a result of the explosion of growth in number of family offices; they simply have to professionalize as a way to stand out in an increasingly crowded market,” Michael Harman, commercial director – private client at Ocorian, said.

The global study interviewed family offices in Bahrain, Bermuda, Canada, France, Hong Kong, Nigeria, Saudi Arabia, Singapore, South Africa, the United Arab Emirates, the UK, the US, Cayman Islands, Egypt, Ethiopia, Germany, Ireland, Italy, Kenya, Spain, Sweden, Switzerland, Tunisia, Jersey and Guernsey.