In a rapidly changing financial landscape, family offices—private entities managing the wealth, operations, and legacy of affluent families—are at a pivotal moment. A Bank of America Family Office study surveyed 335 U.S. family office decision-makers and uncovered a profound evolution underway, amid tech-driven complexity, generational transitions that will reveal shifting needs for families, and heightened ambition in philanthropy and investment strategy. Here are a few key takeaways that shed light on the modern family office, the challenges they’re facing, and how they’re preparing for the next generation.
Generational Leadership Shifts Are On the Horizon
Head of Family Office Solutions at Bank of America Private Bank Elizabeth Thiessen notes that future leaders are “poised to redefine what it means to manage multigenerational wealth— from integrating AI to expanding philanthropic missions.” Of note:
- 87% of family offices have yet to undergo a leadership handover—but 59% expect that change within the next decade.
- Among offices with less-engaged current leaders, 73% anticipate that incoming generations will redefine their family office’s mission or purpose.
What this means: Families are using succession planning not just to preserve wealth—but to modernize structures, purpose, and systems for the digital age.
Core Challenges: Wealth Preservation, Planning & Tech
Family offices reported several key operational challenges they’re tackling:
- Investment and wealth growth and preservation (64%)
- Future and succession planning (56%)
- Strategic credit use (50%)
- Technology integration (44%)
This highlights a dual imperative: protecting existing assets while evolving operational sophistication to stay competitive and agile.
Innovation Through AI and Automation
Technology is no longer a luxury—it’s a necessity:
- 57% use artificial intelligence for investment research and strategy.
- High-tech adoption extends across operations:
- 76% automate forecasting
- 74% use automation for alternative investment analysis
- 73% rely on it for portfolio modeling
The impact? Streamlined processes, smarter decision-making, and faster responses to market shifts.
Philanthropy Reimagined in Succession
Younger generations are ushering in a renewed sense of purpose:
- 51% expect philanthropic goals to increase following leadership transitions due to a focus on prioritizing social impact.
- Just 7% of family offices were created specifically for philanthropic or legacy missions.
So, how is this trend shaping family offices? The growing focus on social impact leads to cause-aligned investments and structured giving strategies.
Economic and Investment Optimism
Despite market volatility, the outlook remains strong:
- Over 60% foresee gains in U.S. stocks, private equity, and M&A over the next 12 months.
- Among offices managing $500 million+, more than half expect U.S. GDP growth.
Strategic takeaway: With confidence high, these offices are positioning for growth, seeking to capitalize on continued economic expansion.
A Shift Toward Alternatives
Family offices are recalibrating asset allocation:
- Portfolios are now nearly evenly split between marketable securities and alternative investments.
- The primary targets:
- Private equity
- Direct business investments
- Real estate
Why it matters: Alternatives offer diversification with the potential for deeper returns—suiting families focused on long-term wealth preservation and growth.
Operational Complexity & Cybersecurity
Family offices offer expansive services: banking, tax, estate, household staffing—spanning dozens or hundreds of accounts.
- 60% trace their origins to assets from a family business with 85% still earning income from it.
- Cyber threats loom large: nearly 1 in 3 respondents reported experiencing a cyberattack, and 40% saw a major impact on family assets. While larger offices face more risk, 10% of family offices managing less than $500 million have no formal cybersecurity measures.
Implications: As family operations deepen, so do risks—cybersecurity and governance must match rising complexity.
Defining the Modern Family Office
The Bank of America Family Office study’s findings illuminate a clear message: the modern family office is at a crossroads. Leadership is transitioning, technology is reshaping operations, philanthropic intent is on the rise, and portfolios are evolving to absorb new asset classes—all under the shadow of increasing cyber threat and operational depth.
To learn more check out the full study.
Meet This Moment with Modern Charitable Giving Solutions For Your Families
As an experienced third-party administrator for private foundations, donor-advised funds, and planned giving, Foundation Source will provide your family office with a robust platform for managing a family’s charitable giving without hiring additional staff or building infrastructure. You continue to manage the relationship with the family and their charitable investments, while we support you administratively. Learn more about how we support family offices with comprehensive, flexible solutions.
Learn More About How We Support Family Offices
Schedule a call or reach us at 800-839-0054 to learn how we can best support your clients who are passionate about philanthropy. Together, let’s #begiving.
