UBS, the world's largest wealth manager, has developed a “tool kit” for ultra-high-net-worth families to help them preserve and grow wealth over generations.
The kit, dubbed The Family Office Compass, includes a guide on setting up a family office, long-term and short-term wealth management information, as well as insights on crafting a family philosophy, or purpose.
The UBS program was developed with the Cambridge Institute for Family Enterprise and tees off findings in its Global Family Office Report last year showing that nearly 70 percent of family offices expect a generational transition within the next 15 years, yet just 37 percent of them believe that the next generation want to play a more prominent role in managing their family's affairs.
The Compass is meant to point those next generation wealth holders in the right direction.
UBS research shows that successors are largely adrift and unable to focus assets in a way that jibes with their lifestyles and interests while at the same time promulgating a long-term mission.
“It is crucial for families wanting to create lasting financial success to identify their driving purpose and to formulate an overall family strategy. Clarity of purpose for the family, and in turn, the family office leads to improved performance of the family office over time and increased usefulness to the family,” says John Mathews, head of private wealth management and ultra-high-net-worth clients for UBS, Wealth Management Americas.
London-based research firm Campden Wealth indicates the global population of single-family offices is approximately 5,300. According to Campden’s estimates, 740 family offices are owned by ultra-high-net-worth individuals with assets under management of $1 billion or more. Of these, 30 percent are based in Europe, 36 percent in North America, 24 percent in Asia Pacific and 10 percent in emerging markets.
The tool kit could provide an easy entree into serious discussions about what seems to be a global quagmire for next-gen wealth holders: stewardship.