What Family Offices Want

This article unpacks the modern needs of family offices navigating a changing world. From strategic investments and inflation hedges to governance and mental health, this guide explores how today’s family offices adapt across generations. Learn how tech, thematic investing, values-driven leadership, and strong communities shape wealth preservation; and why legacy is more than money.

Family offices are more than offices: family offices are private investment and wealth management companies that work with ultra-high-net-worth families to grow their wealth and transfer it across generations. Family clients typically have at least $50 million in assets. The first family office was founded in 1882, and they have rapidly gained popularity in the last decade. Today, family offices have branched out: their services can range from investment management and tax planning to education and philanthropy.

Successful family offices cannot use one strategy alone. To navigate a rapidly changing market, they must utilize strategic financial approaches to adapt to shifting investment, governance, and cultural dynamics. This article will provide insights and guidance for family offices navigating the complexities of this modern landscape.

“Family offices are often deeply private organizations with lean teams, which can leave those working within them feeling isolated as they navigate complex decisions.  Moreover, you don’t know what you don’t know, so working in isolation limits access to emerging trends, regulations, and best practices.  That’s why cultivating trusted relationships with peers facing similar challenges is so important. Across the space, there are now more opportunities—such as ‘family office only’ conferences designed specifically for single family offices—to ask questions, share perspectives, and explore how others are solving unique and often complicated problems. These forums matter because they help professionals keep up with best practices, source deals and talent, and ultimately better serve the families they represent. For all family offices, community and relationships aren’t just valuable—they’re essential.”

-Bobby Henebry, CFA

President & CIO at Elway Capital LLC

Strategic Investment Themes

Family offices employ many different investment strategies to grow clients’ wealth. These strategies can be organized into types: direct investing, fund investing, and thematic investing. Family offices also deal in tangible assets to protect against inflation and advise their clients on private credit and debit strategies.

Direct Investing vs. Fund Investing

Direct and fund investing are two different ways of investing in the market. In direct investing, an investor invests in a company or product. In indirect investing, however, investors work as a group to invest in companies or products. Each type of investment has unique benefits and shortcomings.

Direct investing, also known as direct deals, can offer higher returns than fund investing. Investors do not need to pay fees or commissions on their gains, and these savings, when put back into the market, compound over time. However, direct investing can be riskier than fund investing. Direct investors cannot access the professional guidance that fund investors do, so they must research and invest carefully. Even then, they might not make the wisest choices.

Fund investing is less risky than direct investing because professionals run funds and have diverse investment portfolios that protect against market volatility, and dividends can be reinvested. While fund investing also involves fees, taxes on capital gains, interest, and dividends are applicable to both methods. 

An emerging trend in the family office sector shows a clear shift away from traditional fund investing. Investors are increasingly favoring direct deals, real estate, and alternative assets. Direct investments help eliminate fund fees and reduce certain tax burdens, real estate serves as an effective hedge against inflation, and alternative assets provide protection from market volatility. However, this shift comes with trade-offs: to successfully pursue direct deals, family offices often need to hire internal teams with the expertise to source, evaluate, and manage these opportunities. While this internal capability enhances control, the additional time, effort, and operational resources required represent a real—if not always explicitly accounted for—expense.

Thematic Investing

In thematic investing, investors choose investments based on long-term trends or themes in various market sectors and industries. 

Technology is one such thematic investment. As technology has evolved, so have its investment opportunities. Interest in space tech, biotech, longevity, AI, and clean energy sectors has skyrocketed in recent years. Market trends make thematic investing appealing: These sectors have been experiencing incredible growth, and as they continue to evolve, more investment opportunities will appear. However, thematic investing does have some risks. 

One such risk is concentration. Investors may inadvertently build a non-diverse portfolio by focusing too heavily on a specific trend or theme. Good thematic investing requires a balanced and diversified approach. That said, it’s worth noting that many families originally built their wealth through a highly concentrated operating company that generated transformational returns. As a result, shifting the mindset from concentrated wealth creation to diversified wealth preservation can be a significant generational challenge. If the original wealth creator is still involved, they may be more comfortable taking concentrated bets, drawing from their experience as an operator. Conversely, members of the second or third generation—often with less direct operating experience—may have a lower risk appetite and gravitate toward broader diversification. These preferences underscore the importance of aligning portfolio strategy with the skill sets, experiences, and risk tolerance of the family members making allocation decisions. In addition, short-term volatility presents another challenge, particularly in fast-evolving sectors like tech, where rapid price fluctuations are common.

Real Assets & Inflation Hedges

Real, tangible assets play an important part in portfolio diversification. Unlike other assets and investments, tangible assets have an inherent value because of their properties and uses. In volatile markets, tangible assets like farmland, infrastructure, and gold often hold their value better than other assets. Tangible assets can be used alongside other assets and investments to provide an extra layer of security in case of a market downturn, and they are an effective hedge against inflation.

Private Credit & Debt Strategies

Private credit and debt strategies involve investing in debt that is not traded on the public market. These strategies involve lending directly to companies or projects.

Private Credit

Private credit is a strategy in which investors directly lend money to private companies outside of public debt markets. It provides loan structures with higher returns than traditional bank loans. In a rising interest rate environment, private credit offers more flexibility than traditional loans. Rising interest rates usually result in higher yields on private credit investments, making them more attractive to investors in such an environment.

Moreover, private credit, much like cash-flowing real estate, is attractive because you can build relatively reliable, diversified income streams that support lifestyle expenses and operations of a family office.  Passive income is highly desirable to many family offices, especially if they have sold their operating company that likely had paid dividends to the family for many years.

Structured Credit

Structured credit is a strategy where investors invest in securities backed by a pool of assets (e.g. loans and mortgages), which are issued as tradable bonds.

Distressed Debt

Distressed debt is a strategy where investors invest in companies facing financial difficulties.

Governance & Succession Planning

Structuring Family Governance

In family offices, governance refers to how the family makes key decisions. Governance models, family councils, and constitutions all play an important roles in structuring family governance.

Governance Models

Family office governance models are the framework that guides how family offices operate. Effective governance ensures that the office runs efficiently and that conflicts and emergencies occur minimally. Governance models form the backbone of family offices; without one, an office’s success is uncertain. Types of governance models include single-family, multi-family, and hybrid governance.

Family Councils

Family councils consist of family members from different branches and generations. They are typically advisory, and they address family and business issues.

Constitutions

Family constitutions dictate the rules and guidelines of the family office, including how family board members get their seats, the types of investments made, how their money is spent, and more.

Role of Independent Directors

Independent directors are family office board members who are not part of the family and can help the family make difficult decisions. They have a neutral viewpoint unaffected by family politics or dynamics. Independent directors are a good addition to a family office if a neutral perspective is needed (e.g. active conflicts or emotionally charged topics).

Ideally, pure objectivity is true, but even advisors must navigate family dynamics to give their best independent advice.  Yet if a family member does not agree then an advisor could be let go. So, the culture of the family interfacing with independent advisors and “tough love” is what matters most to perpetuate success (or not) across generations.

Preparing Heirs for Leadership

Passing a family office to the next generation can be a difficult task. Sometimes, heirs might not want to participate in the family office, and some may be too inexperienced to be involved. Training programs, mentorship, and shadowing opportunities can help unwilling or inexperienced heirs become part of the family office. Non-family executives can be an important part of the leadership training program, as family members may not influence them and can present the heirs with an objective viewpoint.

Noteworthy is the fact that you can present objective views, but you can’t force education. And you can’t fully understand the dynamics of a family that underpin whether they listen or not to your advice because their experience is idiosyncratic. The marriage of all those perspectives is a challenge and takes time, trust-building, and ongoing conversations to fully understand the broad range of dynamics at play.

Conflict Resolution Mechanisms

Family office disputes and conflict management are important parts of keeping the office together. The best way to deal with conflicts is to prevent them from happening in the first place. Pro​​active measures prevent disputes from arising, and family offices can run smoother. Ensure the family office constitution is detailed and has built-in risk mitigation.

Deal Flow and Syndication

Curating Exclusive Access

To maximize investment opportunities, building relationships and networks to access off-market investment deals is important. To find niche investment opportunities, be creative. Analyze the market and think about where consumer demands are not being met. Investigate these areas. Having a strong network also helps investors find more niche investment opportunities, as they can ask for ideas, leads, and opportunities their network might have for them. 

Co-Investing Best Practices

Co-investing is an investment strategy in which investors invest their money in a fund’s portfolio company. This is different from fund investing because co-investing allows for direct investment—instead of the fund doing all of the investing, co-investors directly invest in the same thing that the fund does. 

Co-investing allows investors to avoid a fund’s management fees and be more involved in their investments. However, co-investors typically have limited control over the investment process and may find themselves participating in deals they would not have independently chosen. It’s essential for co-investors to carefully select both the fund and the fund manager to ensure strong alignment and mitigate potential risks. Moreover, as a precursor to co-investment, investors are usually required to first commit capital as a passive limited partner (LP) in the fund—only then gaining the right to double down on select co-investment opportunities, often at no fee or carry, or with significantly reduced economics.

Vetting & Due Diligence Frameworks

Whether investors are direct investing, fund investing, or co-investing, they need to have robust processes for deal assessment to minimize bad investments. Deal assessment is the process of analyzing, identifying, and responding to investment risk factors. Aspects of deal assessment include Quantitative and qualitative Analysis, Diversification, scenario analysis, due diligence, and monitoring.

Technology & Security Priorities

Cybersecurity, Digital Threats & Reputation Risk

While traditional cybersecurity threats like phishing, ransomware, and social engineering remain significant concerns for family offices, an equally critical—and often overlooked—dimension of risk is digital reputation. In today’s world, where perception is shaped rapidly online, a family’s digital footprint can influence everything from deal access to professional relationships and even insurance underwriting.

Despite the emphasis many family offices place on privacy, the absence of a thoughtful digital presence creates vulnerability. If a family or family office is not actively managing its online narrative, someone else will—and that version may be incomplete, misleading, or even harmful. Inaccurate digital portrayals can erode trust, damage relationships, and impact long-term opportunities. They can also lead to higher premiums from specialty insurers who assess perceived reputational risk through online data.

Increasingly, reputation management is being recognized not as a branding effort, but as a strategic pillar of risk mitigation. Family offices are reassessing their digital exposure—not only in terms of cybersecurity, but also in terms of what is discoverable about them online. This includes unmonitored media coverage, outdated biographies, dormant websites, and social media accounts associated with family members.

Forward-thinking family offices are taking steps to align their digital presence with their values, culture, and long-term mission. This means developing clear narratives, establishing governance for how information is shared publicly, and ensuring they have the internal or external expertise needed to respond when digital risks arise.

As the line between cybersecurity and public perception continues to blur, digital reputation is emerging as a key area of focus—one that requires ongoing attention, just like any other asset being managed across generations.

Tech-Enabled Family Offices

AI, blockchain, and automation are relatively new technologies but they have already been thoroughly incorporated into modern wealth management. Blockchain has opened up new investment opportunities, and AI and automation have provided an alternative to professional fund managers: AI automates the investing. This technology can enhance efficiency, improve decision-making, and enhance the family office experience because it can expedite the investing process and help make decisions the family might have trouble making themselves. AI can also help identify new or emerging markets and investment opportunities and help family offices invest through thorough market analysis.

Next-Gen Engagement

Emotional & Psychological Aspects

Managing significant wealth presents problems that go beyond the financial: loneliness, trust issues, and anxiety can also accompany it. Family offices should prioritize mental health and well-being to ensure that their wealth remains stable and that their family members continue managing it in a sound state of mind.

Preserving Family Values Amidst Wealth Expansion

It is essential that increasing wealth does not negatively affect members of a family office; each generation should strive to teach humility, gratitude, and responsibility across generations for the sake of family office stability and family stability. 

It is important to provide educational opportunities for heirs on wealth management, entrepreneurship, and leadership. Part of the educational opportunities should incorporate providing support in launching startups or investing in emerging industries. 

Philanthropy as a Unifying Force

Philanthropy is a great way to manage emotional, psychological, and value issues that arise from managing large amounts of wealth. Giving back to the community helps strengthen family bonds and provides family members with a sense of purpose.

Building a Strong Family Office Community

A strong family office community is essential because all family members can operate as a more efficient whole.

Core Community Values & Culture

Core values such as trust, integrity, long-term thinking, and strong relationships guide community interactions and decision-making. A close-knit family office operates more efficiently, remains resilient through challenges, and underscores the need for maintaining the highest levels of confidentiality. 

Core values such as trust, integrity, long-term thinking, and strong relationships guide community interactions and decision-making. A close-knit family office operates more efficiently, remains resilient through challenges, and underscores the need for strict confidentiality.

Community Goals and Objectives

Family offices should set goals and objectives in order to remain focused and strive for something. Wealth preservation, exclusive networking, knowledge sharing, and collaborative philanthropy are examples of such goals and objectives, which give the office something to work towards.

Engagement Opportunities

Engagement opportunities keep family office members interested in and invested in the family office and foster a sense of community. These opportunities may include thought-leadership events, peer mentoring, and case study sessions.

Engaged family members can focus on fostering enduring values and working as a team. A community that focuses on this can also focus on long-term perspectives over quick investment wins. Organizing and holding family-centric activities also fosters engagement—they help generations connect and foster strong family bonds, helping create a more welcoming environment.

An authentic example of an organization fostering strong communities and relationships is Somos22, founded by Tim Brown and Brian C. Adams. Somos22 is a network designed to cultivate meaningful connections among leaders and changemakers, emphasizing personal and professional growth through community engagement. The principles behind Somos22 align with the ethos of family offices—creating an interconnected, value-driven environment where individuals support one another in long-term success.

Engaging with the family office community doesn’t just help members’ mental health, sense of purpose, and belonging. Being a part of the family office community also brings access to proprietary deals, collaborative philanthropy, and operational support.

“Somos22 is about creating a space for families to connect and build relationships that last 100 years, with a focus on connection and community.” 

-Tim Brown

The Future of Family Offices

Family offices are vital for helping wealthy families manage their wealth. Still, a sound family office strategy will do more than just manage wealth: family office strategies that balance wealth management, governance, and emotional health lead to a more inclusive, fulfilling family office that fosters a sense of community, helps its members’ mental health, and helps its members give back to the community.

The Role of Community and Values

A family office is more than wealth management and rules. Values help it remain relevant and successful; a truly successful family office is a community. A community founded on shared values and mutual support ensures lasting success and a legacy for future generations. Start taking proactive steps today to ensure your family office remains strong for generations to come.