Four out of ten single-family offices expect to make “material changes” to the way they manage their business over the next 12 to 18 months, according to a new survey from the Institute for Private Investors.
Cutting staff, outsourcing investment management and non-investment services to outside firms and beginning to offer private trust company services were the most commonly cited anticipated changes cited by 86 IPI members who had single-family offices.
“The changes are being driven by cost considerations and a lack of confidence that they can do investment management internally,” said IPI president Kristi Kuechler.
Asset allocation and consolidated performance reporting were the most commonly cited functions single-family offices said they planned to outsource in the next six to twelve months, according to the survey.
Kuechler noted that, by and large, families want to maintain their single family offices, but no longer want to oversee all functions internally.
“They like the control, confidentiality and customization of the single-family office, but are looking for innovative ways to reduce costs and access more sophisticated investment expertise,” she said.
IPI is a membership organization for wealthy families and individuals who collectively oversee over $50 billion in assets.