The Charlotte, North Carolina-headquartered bank quizzed 335 family office decision-makers to produce its inaugural study of the sector.

Protecting and growing wealth is the most important challenge for North American family offices, a survey from Bank of America has found. The survey comes at a time when 87 per cent of family offices are yet to be passed to the next generation with 59 per cent of them expecting that transition in the next 10 years.

The findings appear in The Bank of America Family Office Study: Perspectives on the Modern Family Office. The inaugural study surveyed 335 family office decision-makers.

Other challenges cited are planning for the future (56 per cent), strategic use of credit (50 per cent), and navigating technology (44 per cent).

The report said leadership handovers are poised to bring new approaches to investing, philanthropy, and the use of technology. In fact, among family offices with less engaged principals, 73 per cent of those surveyed expect the next generation to redefine the office’s mission or purpose.

β€œAs younger generations step into leadership roles, they are poised to redefine what it means to manage multigenerational wealth – from integrating artificial intelligence to expanding philanthropic missions,” Elizabeth Thiessen, head of family office solutions, Bank of America Private Bank, said. β€œThis evolution will shape the modern family office for generations to come.”

More than half (57 per cent) of family offices have utilized artificial intelligence for investment research and strategy. Automation is widely used for forecasting (76 per cent), alternative investment analysis (74 per cent) and portfolio modeling (73 per cent).

The study said that as younger leaders prioritize social impact, 51 per cent of family offices expect philanthropic goals and strategy to play a greater role following succession. Seven per cent of offices were founded primarily to serve philanthropic or legacy missions.

This report is an example of a raft of reports delving into what family offices are concerned about – a sign that private banks are crafting specific offerings in this area to capture HNW and UHNW wealth. Deloitte (2024) reckons that there are 3,180 family offices in North America. (See an example of a bank's family offices survey here.)

Happy days
The Bank of America report said that more than 60 per cent of family offices expect growth in US stock markets, private equity, and M&A activity in the coming year. Among offices managing $500 million or more, more than half anticipate an increase in US GDP.

Alternative investments are a growing priority, the report said, noting that family office portfolios are nearly evenly split between marketable securities and alternatives. Private equity, direct investments in companies, and real estate are viewed as the most promising opportunities.

These organizations remain foundational: Sixty per cent of family offices were founded with assets from a family business, and 85 per cent continue to generate income from family-owned enterprises.