AND BUSINESS STRUCTURES, WHICH CAN MAKE SUCCESSION PLANNING CHALLENGING

traditional asset allocation models that worked well in the past may no longer be relevant now.

One approach being actively embraced involves the allocation of funds towards alternative investments such as private equity, real estate and hedge funds as they tend to be less impacted by fluctuations in interest rates and can offer diversification benefits.

Another strategy involves increasing allocations to fixed-income assets with shorter maturities, given that they are less sensitive to changes in long-term interest rates.

Moreover, UHNWIs may need to reassess their investment objectives and risk tolerance, which includes adjusting target returns, reevaluating portfolio diversification strategies and exploring previously unconsidered asset classes.

The conclusion of the era of low interest rates presents new challenges, and at the same time brings forth new opportunities, where adopting a flexible and dynamic approach can ensure fruitful outcomes.

Due to the challenging global environment, geopolitics is now the top concern for Family Offices. While most still have almost half of their assets in North America, they are keen on boosting allocations to Western Europe for the first time in several years. Additionally, they are planning to raise and broaden allocations to the wider Asia-Pacific region.

In addition to geopolitical factors, climate-related concerns are increasingly re-shaping investment strategies. Urgent issues such as greenhouse gas emissions and climate change impacts have led investors to prioritise companies adopting climate solutions, such as renewable energy, energy efficiency and sustainable agriculture. Some investors are also divesting from fossil fuel-intensive industries or companies that aren’t taking sufficient measures to reduce their carbon footprint.

It’s worth noting that, in some instances, geopolitical circumstances and climaterelated concerns are further complicating the investment landscape. For example, the transition to a low-carbon economy may be influenced by geopolitical tensions surrounding access to critical minerals needed for renewable energy technologies. Similarly, climate change impacts like sea level rise and extreme weather events can contribute to geopolitical risks through resource scarcity or social unrest.

The swift advancements in technology have allowed family offices to harness their potential for optimising their operations, enriching their services and boosting overall efficiency. Utilising software tools that offer real-time financial data, automate mundane tasks and enable comprehensive investment analysis and reporting, family offices can make well-informed investment decisions, identify potential risks, and optimise their portfolios.

Furthermore, it enhances transparency and communication between family offices and their clients, enabling the latter to gain real-time access to financial information, investment performance and various services through web portals and mobile applications.