For the rich and wealthy, the support and guidance provided by family offices remains truly invaluable, but the way these entities operate and deliver their services is changing under the influence of a diverse range of factors.
The family office sector in Europe has seen considerable growth over the past years and is poised for further transformation as firms are trying to adjust to shifts in the economic terrain and clients’ needs so they can navigate challenges more effectively whilst also taking advantage of the new opportunities that arise.
This article aims to shed some light on these transformations and reveal how family offices on the Old Continent might change in the years to come by taking a closer look at future trends and predictions for the next decade.
A quick introduction to family offices
Family offices have quite a long history behind them, serving ultra-high-net-worth (UHNW) families for generations and becoming an integral part of the global financial landscape. But what exactly is their purpose and what kind of services do they provide?
Although the term was coined in the US by the Rockefeller family, the concept originated much earlier in Europe, within aristocratic circles. However, it wasn’t until the ‘80s that family offices started to gain traction as the population of high-net-worth individuals grew, particularly in the tech sector, and wealth generation management became more complex. In Europe, the number of family offices increased by 17% year-on-year to 2023 despite the economic hurdles in the region.
“This growth reflects a broader trend we are seeing – families are increasingly looking for personalised wealth management solutions to navigate family office services such as risk management have become paramount as families seek to protect their assets from market volatility, inflation and geopolitical risk,” said Amanda Boyer, partner at Corwell Partners, a Brussels-based family office with specific emphasis on mitigating and strategically harnessing risk. “Even in a challenging economic environment, the demand for these tailored strategies continues to rise, with a strong emphasis on safeguarding and growing wealth over the long term.”
Nowadays, the main goal of a family office is to help the world’s super-rich families – with fortunes of $50–100 million and beyond – protect their assets, increase their wealth through strategic investments and highly personalised solutions, and ensure long-term financial stability for generations to come.
As expected, the roles of family offices have evolved with the requirements of the affluent families they serve and the economic realities of the time. In their early days, family offices mostly focused on preserving the fortunes of their clients and overseeing their philanthropic contributions. Modern family offices take on a wider variety of tasks and responsibilities, including wealth preservation, risk management, insurance management, estate and succession planning, family governance, tax advisory and compliance, lifestyle services, and so on.
“Family offices have evolved to offer comprehensive services because families need more than basic wealth management. They require tailored solutions that cover everything from investments to estate planning. Some family offices, however, choose to specialise in specific areas like private equity or tax optimisation to provide deeper expertise,” said Boyer. “We chose risk management as our niche because, in an increasingly unpredictable world, shielding wealth from potential threats is essential. Our approach not only mitigates exposure to risks but also empowers families to make confident, forward-looking decisions.”
Therefore, family offices have come to play a key role in modern wealth management, helping ultra-rich families maintain their prosperity in a rapidly changing world, and safeguard their financial legacy, ensuring a seamless transfer of wealth from one generation to the next.
The changing landscape of family offices in Europe
In a highly dynamic financial environment, family offices on the Old Continent are forced to adapt their services to current demands, with technological advances, shifts in the global investment landscape, and the ever-evolving needs of UHNW families emerging as the main drivers of change. So let’s take a closer look at future trends and predictions regarding the evolution of European family offices over the next decade.
One aspect that stands out in particular is the use of technology by family offices, which is expected to increase in the following years. Although European firms have been rather slow to integrate tech solutions into their structures, recent years saw a shift in this area as more providers have been turning to technology to navigate the complex challenges within the finance sector and ensure more efficient operations.
According to the latest data, tech adoption levels for European family offices exceed 80%. Many firms are already using data analytics platforms, cloud-based data storage, AI technology, customer relationship management tools, and other cutting-edge digital solutions to streamline tasks, improve investment decision-making, ward off cybersecurity risks, and secure their clients’ assets.
Diversification of investments and changing preferences in this area also represent key trends shaping the future of family offices in Europe. It seems that wealth management companies are embracing a more proactive approach to investment, seeking to include a broader range of assets in their portfolios and ramp up direct investments. As shown in the UBS Global Family Office Report 2023, European family offices maintain a strong focus on real estate (11%), with 30% of them planning to expand these investments. Firms based in Switzerland take a slightly different route, spreading their allocations across real estate, cash holdings, art, and antiques.
According to Boyer, “Belgian family offices tend to balance conservative and forward-thinking strategies, always focusing on risk mitigation and optimisation. They’ll often rely on traditional investments like real estate and bonds for stability, helping to minimise risk. At the same time, they’re exploring newer opportunities such as private equity and venture capital to optimise returns without overexposing clients to unnecessary risk.”
Despite the well-known risks associated with crypto, 28% of European family offices have already invested in digital assets, although for safety reasons, these investments only represent a small percentage of their total assets, usually no more than 1%. The focus on digital assets goes beyond crypto, as family offices are also taking an interest in blockchain technology and the metaverse. This predilection towards direct investments and diversification highlights family offices’ desire to have greater control over their assets, enjoy superior returns, and future-proof themselves.
One must not forget that the activity of family offices is dictated by the needs and wants of their customers. Their services should respond to the shifting requirements of the current generation of millionaires, billionaires, and their heirs. UHNW families face greater complexities than their predecessors, so their needs and preferences differ visibly.
Younger generations are keener on using new technologies, and they also show greater interest in sustainability issues given that their financial future is going to be impacted by climate change and other environmental concerns. The need to align with clients’ values will likely lead to an increase in focus on ESG principles. As a result, sustainable investments, which currently account for 36% of family offices’ portfolios, are expected to rise to 43% over the next five years.
“We’re seeing younger generations bring a fresh perspective to family offices. They’re eager to use new digital tools to manage and grow wealth, and they’re pushing for investments that align with their values, particularly environmental and social responsibility,” said Boyer. “This shift means family offices will need to keep evolving their strategies and services, adapting to what each generation believes is important. Whether it’s integrating cutting-edge technology or prioritising sustainable investments, staying flexible and responsive is key to meeting the changing needs of these families.”
Final considerations
The next decade is expected to bring significant transformation to the family office sector, as shown by the latest trends and predictions. The future of European firms will most likely be shaped by the accelerating speed of technological advancement, the reorientation toward newer investment strategies and a larger variety of asset classes, as well as the unique needs of the wealthy families whose fortunes they manage.
