Regulatory rules, investment performance and security issues top the list of challenges for single-family offices, according The Family Wealth Alliance’s 5th Annual SFO Study.
Findings were revealed at the Alliance Fall Forum, being held 16-18 October at The James Hotel Chicago. The gathering provides an environment for executives of family offices and firms that serve ultra-high-net-worth families to meet with peers and exchange ideas.
“New regulatory rules requiring many family offices to register with the Securities and Exchange Commission as investment advisers impacted 32.4 per cent,” says Bob Casey, head of research for The Family Wealth Alliance. “Legal fees or other expenses affected 38.2 per cent of participating SFOs. Reported costs range from USD300 to USD450,000, and average USD64,000.”
Among the 5th Annual SFO Study findings:
• Two-thirds, 66.7 per cent, say they have sufficient expertise to evaluate investment vehicles and strategies
• 35.3 per cent outsourced the chief investment officer function to handle their investments, up from 31.8 per cent
• 51.5 per cent reviewed investment policy or practices, up from 39.5 per cent last year; 27.3 per cent actually changed investment policy
• One in five, 20.6 per cent, say a family member was a victim of identity theft via the internet
• 11.8 per cent say a family member was a victim of burglary or robbery
• 12.1 per cent of family offices employ a security consultant