Inside the Modern Family Office: Complexity, Innovation, and a Generational Shift

With 87% of family offices yet to be passed down to the next generation — and 59% expecting that transition within the next 10 years — 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% of those surveyed expect the next generation to redefine the office's mission or purpose.

"As 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," said Elizabeth Thiessen , Head of Family Office Solutions, Bank of America Private Bank. "This evolution will shape the modern family office for generations to come."

The inaugural study surveyed 335 family office decision-makers across North America to understand how these organizations are evolving. Key findings include:

• Top challenges for family offices today: Family offices identified their most pressing challenges as investing, growing and preserving wealth (64%), planning for the future (56%), the strategic use of credit (50%), and navigating technology (44%).
• Innovation through AI and automation: More than half (57%) of family offices have utilized artificial intelligence for investment research and strategy. Automation is widely used for forecasting (76%), alternative investment analysis (74%) and portfolio modeling (73%).
• Philanthropy's next chapter: As younger leaders prioritize social impact, 51% of family offices expect philanthropic goals and strategy to play a greater role following succession. Seven percent of offices were founded primarily to serve philanthropic or legacy missions.
• Economic optimism is strong: Over 60% of family offices expect growth in U.S. 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 U.S. GDP.
• Alternative investments are a growing priority: Family office portfolios are now nearly evenly split between marketable securities and alternatives. Private equity, direct investments in companies, and real estate are viewed as the most promising opportunities.
•  Operational complexity: Family offices oversee intricate operations that go far beyond investment management. Many handle daily banking, estate planning, tax filings, household staffing, and manage dozens — or even hundreds — of bank and investment accounts.
• Family businesses remain foundational: Sixty percent of family offices were founded with assets from a family business, and 85% continue to generate income from family-owned enterprises. These businesses often share infrastructure, personnel, and platforms with the family office.
• Cybersecurity a critical concern: Nearly one-third of family offices or supported family members have experienced a cyberattack, with 40% reporting a significant impact on family assets. Larger offices face greater risk, and 10% of offices managing less than $500 million have no formal cybersecurity protections in place.

Read more about the Bank of America Family Office Study.

Methodology

In the Bank of America Family Office Study, we surveyed 335 primarily C-suite decision-makers at family offices in North America, of whom 55% were family members. For the purposes of this study, a family office was defined as a private company whose employees help manage a family's assets and needs. The offices in our study manage between $25 million and more than $5 billion in assets, with 60% holding $500 million or more. They range in size from less than 5 employees to more than 30, with 62% of offices having more than 10 employees.

Bank of America

Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving nearly 70 million consumer and small business clients with approximately 3,600 retail financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 59 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

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Reporters may contact

Julia Ehrenfeld, Bank of America     
Phone: 1.646.855.3267
[email protected]

Carolyn Batt, Bank of America
Phone: 1.646.983.1369
[email protected]

SOURCE Bank of America Corporation