Industry Updates

Rick Caruso

The owner of the Palisades Village Mall is Rick Caruso, a real estate developer with a net worth of approximately $5.8B according to Forbes. As the fire approached his property, he hired a team of firefighters – with their own trucks with hundreds gallons of water – to protect it. The decision was successful; the buildings in the shopping village were some of the only ones left standing in the vicinity.

In 2022 Caruso ran for Mayor of Los Angeles. He lost to current Los Angeles Mayor Karen Bass, whom many commentators believe mismanaged the city’s preparations to prevent the recent devastation. It is widely believed that many of the fire hydrants in the districts worst affected by the disaster ran dry.

UHNWIs frequently turn to private providers for essential services, often starting with familiar areas like healthcare, personal security, and education. Increasingly, however, they are recognizing the importance of a more comprehensive approach that encompasses services traditionally provided by governments such as firefighting – highlighted by the recent Los Angeles wildfire – utilities, disaster preparedness, and environmental monitoring/protection. More information on private-sector services covering these areas is below.

01 Firefighting

Public firefighting services are typically the first line of defense against fires, relying on publicly funded fire departments and infrastructure. However, during large-scale incidents or in areas with limited public resources, private firefighting services can provide critical supplemental support.

According to the National Wildfire Suppression Association, an American organization with over 300 members providing fire safety services, over 40% of firefighters in the United States are employed in the private sector. Information on private-sector firefighting in Europe is more limited, but several companies like Danish multinational Falck are active in the sector – primarily serving as government contractors. In the United States, it is more common for private firefighting companies to serve insurance companies and occasionally wealthy individuals in addition to governments.

For UHNWIs, private firefighting services can offer several key advantages:

• Rapid response. Private companies can often deploy resources more quickly than public agencies, especially during widespread emergencies when public resources are stretched thin.
• Targeted protection. Private firefighters can focus specifically on protecting a client’s property, implementing tailored defense strategies.

Specialized equipment and expertise. Private companies may possess specialized equipment or expertise in areas such as wildfire suppression or high-value asset protection.

02 Utilities

Governments typically play a significant role in the provision of essential utilities like electricity, water, and sewage treatment. Utility companies often operate as regulated monopolies, ensuring consistent service and managing large-scale infrastructure. However, for UHNWIs seeking greater control and resilience, private utility solutions offer compelling alternatives.

While contracting a completely independent, large-scale private utility provider is generally not feasible due to infrastructure requirements and regulatory constraints, UHNWIs can achieve significant independence through:

• Off-grid solutions. Solar power systems, combined with battery storage, can provide reliable electricity independent of the public grid. Similarly, private wells, water purification systems, and self-contained sewage treatment facilities can ensure water security and sanitation.
• Backup power systems. Installing robust backup generators can provide emergency power during grid outages, safeguarding essential systems and maintaining comfort.
• Private microgrids. For larger estates or communities, private microgrids can offer a more sophisticated and resilient approach to power distribution, allowing for local generation and management.

These solutions not only enhance resilience but can also contribute to sustainability goals and reduce long-term operating costs.

03 Disaster preparedness

Government agencies typically provide disaster preparedness information, evacuation orders, and emergency shelters during large-scale events. However, for UHNWIs, a more comprehensive and personalized approach to disaster preparedness can significantly mitigate risks.

Private disaster preparedness services can include:

• Customized evacuation plans tailored to specific properties and family needs, including pre-arranged transportation, secure destinations, and communication protocols.
• Private emergency shelters and bunkers providing safe and secure refuge during disasters, equipped with essential supplies and life support systems.
• Pre-arranged contracts with emergency response and recovery firms for rapid access to resources and expertise for post-disaster cleanup, rebuilding, and logistical support.
• Advanced warning systems that leverage private weather forecasting services, sensor networks, and real-time data analysis to provide early warnings of impending disasters.

These proactive measures can provide peace of mind and significantly enhance safety and security during emergencies.

04 Environmental monitoring and protection

Growing awareness of environmental risks and increasing emphasis on environmental, social, and governance factors are driving demand for private environmental monitoring and protection services. These services address concerns related to personal health, regulatory compliance, and responsible environmental stewardship.

Private options include:

• Private air and water quality monitoring systems that can provide real-time data on air and water quality within and around a property, enabling proactive measures to mitigate risks.
• Private environmental remediation and cleanup services for addressing environmental contamination or pollution issues on a property, ensuring compliance with regulations and protecting human health.
• Private land management and conservation services. For larger estates, these services can ensure responsible land stewardship, protect natural resources, and enhance biodiversity.

Investing in these services not only protects personal health and property value but also demonstrates a commitment to environmental responsibility, aligning with the growing global focus on sustainable practices.

Even just a quick browse through WEF’s website reveals a tremendous emphasis on data-driven insights, as should be expected from any modern, professional organisation. Virtually every published report or article presents statistical or otherwise numerical evidence supporting the WEF’s various initiatives. Also, the WEF website has a dedicated section devoted to intelligence where key issues and research findings are displayed in intuitive dashboards. Here is an example of how the WEF visualises the topical ecosystem of financial and monetary systems:

Much of the most recently published material – for example, this video recap of economic predictions for 2025, which summarizes key survey results – include at least a few data points. Almost all of the key arguments made in the summary of the WEF’s latest Global Risks Report are backed up with visualised data.

The WEF and family offices serve different – albeit sometimes overlapping –  purposes. Even so, the WEF’s demonstrated success in operationalising data should lead family officers to:

• Conclude that their family clients and the WEF community as a whole take similar analytical approaches to achieving their respective goals. Influential and time-constrained decision-makers require understandable and actionable data to inform their strategies.

• Ask how the WEF operationally excels at leveraging data to drive high-stakes discussions and negotiations at Davos. Answers can help family officers serve their own stakeholders better.

To answer this operational question, we can map out how the WEF approaches data based on publicly available information. Their strategy includes:

01 Partnerships to ensure access to high-quality data

The WEF is actively advancing data quality and trustworthiness through several initiatives such as the Data for Common Purpose Initiative (DCPI). Launched in December 2020, this initiative aims to create a foundational governance framework that allows for the ethical sharing of data across various sectors. Key priorities include unlocking data from silos while protecting privacy rights and promoting a responsible approach to data exchange. The WEF has stated that three critical principles to uphold in the data economy are data integrity, interoperability, and inclusivity in the sense of ensuring that the right data is accessible to the right people.

02 Partnerships to integrate data from multiple sources

One of the WEF’s notable technology partners is with Salesforce, which has helped the Forum create a single source of truth based on both internal data regarding attendees as well as the external data (for example on sustainability and economics) the attendees discuss.

03 Partnerships to transform raw data into easily understandable visuals

An example of such a partnership is the one the WEF has with Accurat, a design agency focused on data storytelling that has helped the Forum clearly present important facts and figures in a number of high-profile reports since 2016. According to the agency’s founder, before the partnership began “the team at the WEF was used (as everyone else in 2016) to doing things the traditional way: manual graphic processes and hundreds of hand-crafted country profiles for each published report.”

In 2024, Klaus Schwab announced his departure from the WEF’s day-to-day management and now serves as the chairman of its board of trustees. While he – like all leaders of influential organizations – has received his fair share of criticism, he undoubtedly “got it right” when recognising and acting on the importance of:

01 Globalisation

In the late 1960s and early 1970s, there was a widespread concern in Europe about American economic dominance. This concern was popularised by Jean-Jacques Servan-Schreiber’s book “Le défi américain” (“The American Challenge”), which highlighted the perceived technological and managerial gap between Europe and the USA. This “American challenge” included the fear that European companies would be sold to American investors and that the US would dominate markets due to its advancements in technology and management.

Klaus Schwab founded the European Management Forum in 1971 as a direct response to this “management gap”. Schwab was motivated by Servan-Schreiber’s book and wanted to help introduce European economic players to modern American economic methods. The initial 1971 meeting – organised to coincide with the 25th anniversary of the Centre d’Études Industrielles (CEI) in Geneva, where Schwab was teaching – involved a number of American participants, including US economist Harvard Business School Dean George P. Baker, who acted as chair, and liberal US economist John Kenneth Galbraith, who was a keynote speaker.

As the 1970s unfolded, however, geopolitical events like the oil crisis of 1973/1974 demonstrated that transatlantic competitive tensions were far from the only issues worth addressing on the global stage. Schwab invited Chinese statesman Deng Xiaoping to attend the European Management Forum in 1979 and by the 1980s was inviting other high-ranking political leaders from around the world. In 1987, Schwab changed the name of the organization to the World Economic Forum (WEF), marking a definitive emphasis on the global issues it is known for addressing today.

Lesson for UHNWIs

Schwab’s initial focus on bridging the transatlantic management gap was a prescient recognition of the increasing interconnectedness of economies. Expanding his organization’s scope demonstrated his ability to adapt to changing realities and recognize the broader implications of globalisation.

For UHNWIs, this historical trajectory offers a valuable lesson: globalisation is not a recent phenomenon, but a decades-long process with evolving dynamics. Just as Schwab recognized the need to broaden his initial focus, UHNWIs must adopt a global perspective when managing their wealth. Diversification across geographies and asset classes is crucial not only for maximising returns but also for mitigating risks associated with geopolitical instability and economic shocks in any single region. Security, both financial and personal, also takes on a global dimension in this context, requiring careful consideration of international regulations, political climates, and potential threats.

02 Stakeholder capitalism

Since 1971, Schwab and the Forum have continued to make a basic argument that businesses should not focus not just on financial profits but also the interests of customers, suppliers, and society as a whole.

This message has been a recurring theme at Davos meetings and has appeared in one form or another in even the earliest of Schwab’s books. Schwab, who holds a doctorate in engineering, published Moderne Unternehmensführung im Maschinenbau (Modern Management in Mechanical Engineering) in the same year as he founded the Forum. This short book included one of the earliest German-language discussions of the concept of what is today known as stakeholder capitalism.

Over recent years, many of the highest-profile global initiatives – discussed on the WEF stage or otherwise making headlines – related to stakeholder capitalism have revolved around the use of environmental, social, and governance (ESG) metrics for businesses. Internally, the WEF sets detailed operational guidance and standards regarding its organisation’s sustainable practices.

Lesson for UHNWIs

A frequent critique of the WEF in general and Schwab in particular is that they are creating an elitist facade: a spectacle of the world’s best-resourced individuals and organizations professing concern for global welfare while pursuing self-interest behind the scenes. For example, many supposedly green-minded WEF attendees have come under fire for adding to global warming by taking private jets to Davos.

It is hard to argue, however, that Schwab and the WEF have ever been inconsistent in their public stance on stakeholder capitalism. When Schwab published his first book in 1971, he and the Forum were nowhere near as influential as they are today. Throughout the decades, their emphasis on broader societal well-being has remained steadfast.

UHNWIs will not need the WEF to remind them that it is a good idea to think beyond their own interests. History holds countless examples of ultra-wealthy people advancing public good through philanthropy and socially-conscious business practices.

Instead, the lesson here is about the importance of defining principles, sticking to them, and leading by example. Enduring legacies stem from clear visions backed by decisive action.

Remember that any influential person’s vision of a better future – and the actions he or she takes to advance this vision – can be expected to receive at least a little criticism in one form or another.

03 Networking

Schwab is known as one of the world’s most influential networkers. His ability to bring together disparate groups of business leaders, politicians, and members of civil society was the primary driver behind the WEF’s rise to the global influence it enjoys today.

For example, his networking skills are widely regarded as having ultimately led to the creation of the World Trade Organization following the Uruguay round of General Agreement on Tariffs and Trade deliberations. The idea for these deliberations is said to have stemmed from discussions among WEF participants brought together by Schwab.

Lesson for UHNWIs

While the ultra-wealthy understand networking’s value for advancing immediate interests, the greater opportunity lies in becoming a connector. By strategically linking members of their networks, UHNWIs can create exponential value that extends far beyond bilateral relationships.

Just as Schwab’s power stemmed from connecting disparate groups, UHNWIs who facilitate meaningful introductions often find themselves at the center of valuable new ventures and opportunities. This reciprocal dynamic often creates a virtuous cycle: those known for making thoughtful connections tend to receive similar high-value introductions in return. The most valuable component of any network is its “nodes.”

The stakes are particularly high in wealth management. As the Altrata World Ultra Wealth Report 2024 suggests, the global UHNWI population is expanding at an annual rate of 9%. For wealth managers, keeping pace with this shift requires adopting cutting-edge technologies to meet the rising expectations of tech-savvy clients.

AI and Blockchain: The Foundations of WealthTech

Artificial intelligence (AI) and blockchain technology are at the heart of this transformation. AI enables wealth managers to sift through vast datasets to offer personalized insights and automate routine tasks like compliance checks, freeing advisors to focus on strategic planning.

A survey by Accenture found that nine out of ten financial advisors believe AI can help grow their books of business by more than 20% through improved client engagement and operational efficiency. Additionally, PwC’s research forecasts that assets managed by AI-enabled digital platforms, such as robo-advisors, are expected to nearly double, reaching almost $6 trillion US dollars by 2027.

Blockchain, meanwhile, enhances security and transparency in wealth management. By enabling real-time transaction verification and smart contracts, it ensures faster, more reliable services. These tools are no longer optional but essential in a sector where 66% of clients now demand a digital-first approach to managing their wealth according to F2 Strategy’s 2024 WealthTech Outlook.

Collaboration as the New Imperative

This year’s focus at the WEF on “Collaboration in the Intelligent Age” highlights the increasing demand for integrated solutions in wealth management. Platforms like Altoo exemplify this trend, bridging the gap between UHNWIs, family offices, and financial advisors.

“Altoo’s platform is a game changer. Our clients describe it as a world-class asset management solution with exceptional security features.” says Ian Keates, CEO of Altoo.
By providing a centralized dashboard that aggregates data across global institutions, the Wealth Platform offers clients complete visibility into their wealth, empowering better decision-making.

This ethos of collaboration is also evident in Altoo’s partnership with ALBAPAZ, a multi-family office. “Altoo allows us to ensure optimal wealth allocation, conduct regular valuations, and deliver detailed reporting,” says Dominik Unger, ALBAPAZ co-founder. The integration of technology and human expertise enables his clients to navigate complex wealth structures with agility and confidence.

Challenges for Traditional Firms

While innovators thrive, traditional wealth management firms face an uphill battle. Many still rely on outdated systems that are slow, error-prone, and incapable of meeting modern expectations. The Capgemini World Wealth Report shows that over 60% of UHNWIs prefer a hybrid model blending digital tools with human expertise – a model that requires significant investment in technology.

The consequences of failing to modernize are stark. Fintech disruptors and robo-advisors are rapidly eroding the market share of legacy firms. Meanwhile, clients increasingly demand seamless, mobile-first experiences and greater transparency – services that traditional approaches struggle to provide.

What UHNWIs Should Look for in WealthTech Providers

As the wealth management landscape evolves, choosing the right technology partner is critical for UHNWIs. Here is what to prioritize:

01 Security and Privacy: Ensure the platform uses advanced encryption and complies with international data regulations.

02 Usability: Opt for solutions with intuitive interfaces that simplify complex financial data.

03 Flexibility: Look for platforms that can be tailored to manage diverse, multi-jurisdictional portfolios.

04 Support: Robust client service and onboarding expertise are essential for smooth integration.

The Future: Hyper-Personalization and Sustainability

The future of wealth management lies in hyper-personalization, driven by AI and real-time analytics. McKinsey predicts that 80% of firms will adopt integrated platforms to meet client demands for bespoke solutions. Simultaneously, sustainability is becoming a key consideration, with ESG (environmental, social, governance) factors increasingly influencing investment decisions.

“Technology is not just a tool – it is a cornerstone of modern wealth management strategy.
By embracing advanced platforms and collaborative approaches, wealth managers can not only keep pace but lead the industry into the Intelligent Age, “ underlines Ian Keates.

The Time to Act is Now

The clock is ticking on the future of wealth management. As Klaus Schwab emphasizes, “The future will be shaped by those who harness the power of technology and human collaboration.”Wealth managers must act decisively, embracing innovation to serve the growing ranks of UHNWIs. Platforms like Altoo, with their emphasis on security, usability, and collaboration, are setting the standard for this new era. The Intelligent Age is here, and those who adapt will define the future of wealth management.

In family office portfolios, digital assets are far from being a focus. Only 17% of respondents to Citi’s 2024 Global Family Office Survey had made allocations to the asset class and 10% said they were doing research or seeking advice before investing. A full 73% said they had not made investments in cryptocurrencies and were not planning to.

Even so, digital assets and Web3 – a vision for a decentralised internet where applications and services are built on blockchain technology – are likely on many family offices’ radar:

• In the European Family Office Report 2023, intelligence provider Campden Wealth found that a full 93% of family offices investing in digital assets believed that Web3 and blockchain technologies in commercial applications had the potential to create substantial financial value.
• Financial service provider Ocorian’s 2024 research highlighted that two-thirds of family officers saw younger generations’ interest in digital assets as an important intergenerational shift.

Heading into 2025, family officers expecting questions about this emerging space will therefore be wise to review the basic types of assets within it and the big picture of Web3.

Key Types of Digital Assets

Cryptocurrencies are a catch-all term for:

• Crypto coins: Digital assets native to specific blockchains, primarily used as a medium of exchange or store of value. Bitcoin (BTC) and Ethereum (ETH) are well-known examples.
• Crypto tokens: Digital assets that provide governance rights, utility, or access within decentralized networks or applications. Many crypto tokens are created using the Ethereum blockchain.
• Stablecoins: A subset of crypto tokens pegged to traditional government-regulated currencies (referred to as “fiat currencies” by cryptocurrency enthusiasts). Tether USD (USDT) is a well-recognized example.
• Central bank digital currencies (CBDCs): Digital currencies issued and regulated by a central bank, designed to serve as a digital version of fiat money. For instance, the European Central Bank is exploring the launch of a digital euro.

Non-fungible tokens (NFTs) are unique digital assets representing ownership of a specific item or content.

Tokenized real world assets (RWAs) are digital assets representing non-digital assets like real estate or physical gold.

Security tokens are digital assets representing ownership of traditional financial securities.

The Promise of Web3

Family office professionals are well aware of the importance of securing ownership of assets and protecting privacy. For example, they often conduct careful due diligence on custodians and strive to maintain confidentiality when handling the family’s financial affairs.

The promise of Web3 is to bring this paradigm of respecting property rights and privacy to the entire internet. Unlike the currently centralised web – known as Web2 –  where data and control are concentrated in the hands of a few large corporations, Web3 aims to distribute power and control among users.

Venture capitalist Chris Dixon has defined Web3 as the “Read-Write-Own Web” in comparison to the Web1 of the 1990s and the Web2 that virtually everyone is familiar with today. The following table provides more context around this comparison:

Why Web3 Matters

Today, investments in Web3 technologies are largely the domain of crypto-focused venture capitalists. Such technologies:

• Enable the management of DAOs, short for decentralised autonomous organisations, which are communities governed by smart contracts (self-executing contracts with terms directly written into code) instead of centralised authorities.
• Provide the decentralised infrastructure necessary for creating interoperable digital experiences (involving, for example, augmented reality and virtual avatars) in the collective online shared space popularly known as the Metaverse.
• Make it possible for electronic gamers to truly own – independently of a game developer –  their in-game assets such as characters, items, and virtual land in the form of NFTs that can be traded on third-party marketplaces.

Q2 2024 research from Galaxy, a provider of digital asset investment services and solutions, found that crypto venture capitalists allocated the largest share (24%) of their total capital to companies and projects within the “Web3/NFT/DAO/Metaverse/Gaming” category.

Whether or not their investment mandates allow for backing crypto venture capitalists, family offices should note this interest from venture capitalists. If the promise of Web3 is delivered – regardless of who delivers it and how –  then worldwide adoption of digital assets as mediums of exchange will inevitably rise.

Such a rise in adoption would have significant implications for digital asset markets in general. Today, many analysts view digital assets rather as stores of value and speculative tools as opposed to everyday forms of payment. As is often observed, it is still uncommon to pay for coffee with Bitcoin.

In a Web3 future, however, digital assets will be the mechanisms by which value is exchanged for an increasing array of commodities, products, and services – some of which may not have yet to be conceptualised or widely recognised as such.

For example, many users of Web2 social media platforms remain oblivious to (or at least uninterested in) the fact that their browsing data is being monetised by someone else. If a Web3 social media platform gains mainstream traction, though, its users will likely be able to retain ownership of their browsing data and be compensated for sharing it – and a digital asset will be the mechanism of compensation.

Investing in Digital Assets and Web3

The majority (64%) of respondents to Citi’s 2024 Global Family Office Survey said they are undecided about how they want to invest in digital assets. 24% expressed interest in directly holding cryptocurrencies like BTC and ETH, while 18% said they preferred investing in crypto-linked investment funds like exchange traded funds (ETFs) or private funds. There was noticeably less interest in other forms of digital assets like tokenized securities, stablecoins, and NFTs.

Whether a family office is deciding how to invest in digital assets or refining its existing approach, it should keep in mind that:

• Custody is a critical consideration when directly holding digital assets, more so than with traditional assets. While self-custody is an option, it may not be ideal for managing significant wealth. Institutions like Coinbase, which is the custodian for the majority of the spot Bitcoin exchange-traded funds (ETFs) launched in 2024, offer custodial services.
• Crypto-focused funds of funds provide a potential entry point into digital assets for family offices looking to explore this evolving space.

Takeaway

In 2025, digital assets are expected to be in the spotlight like never before. While it may not be time for every family office to invest in this relatively novel asset class, it is time to explore it – especially as the Great Wealth Transfer continues to unfold and younger, digital-native heirs become responsible for stewarding their families’ legacies.

Cryptocurrencies and funds holdings – including those in cryptocurrency ETFs – are among the many types of bankable and non-bankable assets that family offices and wealth owners can monitor and analyse effortlessly.

01 Number of Millionaires at All-Time High

According to Capgemini’s World Wealth Report 2024, the global number of individuals with assets worth at least $1 million (excluding primary residences) reached a record 22.6 million in 2023, up 5.1% from 2022. Their total wealth also hit an all-time high, rising 4.7% to $86.8 trillion – the highest figure since the report’s inception in 1997.

Capgemini attributed this record-setting growth to increased savings rates, strong stock market performance, and a lower – although still relatively high – average annual inflation rate of 5.9%.

Declining real estate prices, among other factors, limited wealth growth in 2023. However, the primary driver of the rise in millionaires’ wealth was strong stock market performance, which rebounded sharply after a weak 2022.

Capgemini highlighted the robust performance of major stock indexes in 2023:

• NASDAQ (United States): +43%
• S&P 500 (United States): +24%
• DAX (Germany): +20%
• CAC 40 (France): +16%

Many of these millionaires are expected to join the ranks of ultra-high-net-worth individuals (UHNWIs), whose global population rose to 626,619 in 2023, an increase of 4.2% from 2022, according to The Wealth Report 2024 by Knight Frank.

The real estate firm found that the number of UHNWIs in North America saw the largest increase from 2022 to 2023 (+7.2%), followed by the Middle East (+6.2%) and Africa (+3.8%). Latin America was the only region to experience a decline in UHNWIs (-3.6%).

Turkey led globally in the growth of new UHNWIs, with a 9.7% increase, followed by the United States (+7.9%), India (+6.1%), South Korea (+5.6%), and Switzerland (+5.2%). Knight Frank predicts a 28.1% global increase in the UHNWI population by 2028.

The United States remains the country with the largest millionaire population, hosting 7.43 million in 2023. Japan and Germany ranked second and third, with 3.78 million and 1.65 million millionaires, respectively.

Global Wealth on the Rise

The UBS Global Wealth Report 2024 suggests that:

• Wealth inequality is not as pervasive as it may seem. In Switzerland, for example, wealth inequality in 2023 was down 4.6% vs 2008. In Germany, it was down 5.4% over the same period.
• Opportunities for economic advancement remain robust worldwide, with one in three people moving up to the next rung of the wealth ladder within a decade. The authors noted that wealth inequality tends to rise in developing countries but fall in industrialised countries.

A 4.2% rise in global wealth (measured in US dollars vs. 2022) added to the positive picture. Year-on-year wealth growth was most pronounced in the Middle East, Europe, and Africa, where UBS measured a rise of 4.8%. Wealth growth across the Americas stood at an impressive average of 3.6%.

The UBS economists gave a nuanced description of wealth growth in:

• Asia, where it was up 4.4% year-on-year but was accompanied by a debt burden that has risen 192% since 2008 – no less than 20 times as much as in Europe, the Middle East, and Africa over the same period.
• Switzerland, where it rose 3.4% year-on-year when measured in US dollars. Measured in Swiss francs, however, Swiss prosperity contracted by nearly 6%. The Swiss franc appreciated sharply towards the end of 2023 and made investments denominated in other currencies worth fewer Swiss francs.
• Turkey, which led all countries with an average rise of over 157% year-on-year measured in the collapsed local currency. High inflation led many Turks to invest their savings in capital markets and hard asset classes like real estate whose prices rose sharply. The result was a dramatic rise in nominal prosperity.
• Europe, where strikingly different wealth trends have emerged since the 2008 financial crisis. While people in Scandinavia and Central Europe are getting richer, those in Southern Europe are falling behind. Italy, Spain, and Greece are, along with Japan, the only countries where wealth measured in US dollars has fallen since 2010.

Switzerland, where average assets per capita are worth US $709,612, holds the top position on the national prosperity scale, outpacing Luxembourg (US $607,524 per capita) and Hong Kong (US$ 582,000 per capita). In the US, technology stock market gains have been a key driver behind the rise of American wealth per capita to US $564,862.

Takeaway

These 2024 reports paint an optimistic picture of rising prosperity, driven by robust stock market performance and increasing numbers of millionaires and UHWNIs.

01 What a family office is and does

A family office is a private entity dedicated to managing the financial affairs of one wealthy family (a single family office) or several (a multi-family office). Unlike banks or third-party asset managers, family offices operate independently and answer directly to wealth owners.

Historically, family offices were created to look after the wealth of ultra-high-net-worth families. But the modern-day family office often does far more, discretely taking care of anything for which wealth owners do not have capacity, knowledge, skills, or simply interest. Securities portfolios, real estate, yachts and art collections, inheritances, mergers and acquisitions, tax planning, and mediation between different generations of family members are just a few examples.

Most family offices prioritise the preservation of assets, optimising the transfer of wealth to future generations. According to the findings of a survey of family offices by private investment funds Terra Nex and Middle East Best Select, family offices emphasise pursuing carefully selected investment opportunities: Almost two thirds of the players surveyed favoured direct investments or individual investments. Many family officers have entrepreneurial backgrounds and take a creative, hands-on approach to their work.

02 Why to create a family office

Entrepreneurial families face increasingly complex business, legal, and tax challenges when it comes to building and structuring wealth to benefit family members for generations to come. They often value independent advice from professionals acting exclusively in the family’s interests.

A family office can be an ideal source of such advice, helping family members address their unique challenges with a level of personalisation unavailable from other types of financial service providers when it comes to preserving, growing, and transferring wealth. In addition, a family office can be:

• A central link within a family governance structure. It can be the first point of contact for questions relating to the strategic direction of the family’s business and succession planning strategies — or when external mediation is needed in family disputes.
• A “gatekeeper” for family members, helping to free up their time and meet their needs for security and discretion.

03 Envisioning and setting up a family office

Like so many things in life, starting with the end in mind is essential for successfully launching a family office. When envisioning a family office, key questions to ask yourself are:

• What services does my family most need?
• Should the family office itself actively manage assets? If so, assets in which classes?
• Should the family office have an influence on the family business? Or should the family office operate independently of the business?
• Will the family office serve other families? If starting out as a single family office, is there a possibility that more families will be served in the future?

Once you’ve answered these questions and formed an initial vision of your family office, it is time to start taking your first steps towards setting it up. Here are some recommendations to guide you in doing so:

• Set a limited number of priorities. The point of having a family office is to receive better, more personalised services than are available elsewhere. It is unrealistic, however, to be better at anything and everything from a “standing start.” One of the most common reasons family offices fail is lack of focus. Choose the most important core competencies to build initially before thinking bigger.
• Ensure adequate reporting. Family office decision-making is only as good as the data and metrics it relies on. Reporting should encompass all assets in the portfolio, including nonbankable ones like properties and private equity. A sophisticated digital wealth platform like Altoo’s can provide advanced monitoring and reporting capabilities with minimal manual effort, as information from assets across the family’s portfolio flows into the platform automatically for analysis and visualization.
• Focus on two to four asset classes. Initially, direct family officers to manage the types of assets that are most important to your family. Here, management does not necessarily involve hands-on, day-to-day efforts. Family officers may, for example, delegate responsibilities to specialists and closely monitor their results.
• Hire for the right expertise. Family office teams should excel in both the development and implementation of investment strategies. Aim to bring in expertise that covers the selection and negotiation of asset management mandates, particularly with respect to the negotiation of fees. The team should also be able to ensure legally compliant tax optimisation of investments. Switzerland is often considered the true European hub for family offices, for which there is a mature market for such services and the industry is primed for future growth. Famous wealth owners from not only Switzerland but also Germany, Italy, Greece, and France have set up their own family offices in Switzerland, often hiring portfolio managers with banking experience who prefer working in a smaller team.
• Hire for the right ethics. There is no room for conflicts of interest in a family office. Above all, family officers should display discretion and loyalty in handling your financial affairs.

Takeaway

Establishing a family office is a sophisticated undertaking that demands strategic vision and an unwavering commitment to your family’s unique needs and aspirations. By tailoring its services to preserve, grow, and transfer your wealth, a well-structured family office becomes far more than a financial entity — it evolves into a cornerstone of your legacy, safeguarding it for generations.

Of all a UHNWI’s assets, health will always be the most valuable. The day-to-day responsibilities of overseeing a business empire or complex wealth can often put this all-important asset at risk. While UHNWIs can make significant investments into health solutions, ensuring that any given solution is truly the best money can buy is often a challenge in itself.

01 The burden of responsibility

For UHNWIs, financial decisions often carry significant consequences. Unfortunately, high levels of stress typically accompany high levels of wealth. Heart disease, anxiety, and sleep disorders are all too common among UHNWIs.

Many UHNWIs are known to take relaxation seriously by carving out time for physical exercise and mindfulness practices from their busy schedules. For instance:

• Media mogul and philanthropist Oprah Winfrey advocates yoga and meditation as ways to manage the pressures of her high-profile life.
• Jack Dorsey, the former CEO of Twitter and co-founder of Block, is known for rising early to meditate, exercise, and drink a “wake me up” cocktail.”

02 The labyrinth of complex medical insurance

Among virtually all types of risks, medical ones are perhaps the most unpredictable and challenging to insure against. Unlike life expectancy, which can be statistically modelled, an individual’s specific medical future is highly unpredictable. Treatments may vary in success, and chronic conditions might require ongoing management. This uncertainty poses a challenge in predicting the complete scope of potential medical costs. This challenge is reflected in the increasing complexity (and rising premiums) of medical policies offered by insurance companies.

UHNWIs can afford these premiums, but making claims often entails unnecessary administrative hassle when the full costs of care can be self-insured, that is to say covered out-of-pocket when necessary.

Famous UHNWIs have generally avoided disclosing their approaches to medical insurance, most likely due to the sensitive nature of personal medical information. Nevertheless, medical self-insurance is widely recognized among well-resourced enterprises – including those led by the likes of Jeff Bezos, Warren Buffet, and Jamie Dimon – as a prudent financial decision.

For example, in 2018, Amazon, Berkshire Hathaway, and JP Morgan, formed an alliance to take more responsibility for covering the medical costs of their respective workforces. The alliance disbanded in 2021 because it was unnecessary; the companies preferred taking more individualistic approaches tailored to their specific needs. In 2023, the Employee Benefit Research Institute reported that US companies have been self-insuring the medical risks of more than half of all the employees in the country since 2010.  Also, it is worth noting that Warren Buffett is known to be a proponent of self-insurance in general.

03 When “best care” becomes a bewildering maze

Virtually all medical treatments are accessible to UHNWIs. However, this abundance of options can be overwhelming, leading to questions about the optimal course of action.

Prominent UHNWIs’ backing of cutting-edge healthcare initiatives suggest that data holds the key to answering these questions. For example:

• Patrick Soon-Shiong, the billionaire biotechnology entrepreneur, is a major donor to the Chan Zuckerberg Initiative, co-founded by Mark Zuckerberg and Priscilla Chan. The Initiative aims to map all human cell types at a single-cell level with advanced data-driven techniques. The data will be used to identify new drug targets and personalise treatment strategies based on the compositions of individuals’ cells.
• Marc Benioff, CEO of Salesforce, has used his company’s venture capital arm, Salesforce Ventures, to invest in healthcare startups leveraging data for treatment recommendations. One notable example is Paige AI, which employs artificial intelligence to analyse medical images and identify potential cancer cases.

Mastering wealth data to reduce stress and streamline medical self-insurance decisions

For UHNWIs with complex wealth, having a comprehensive, clear, and current overview of their portfolios can go a long way towards ensuring psychological health and easing medical self-insurance decisions. Just as in cutting-edge medicine, good data availability and analytics are key to success.

These days, digital technology is integral to almost every aspect of daily life, from communication to booking travel and conducting business. For UHNWIs, however, everyday life often involves decisions and needs that mass-market technologies simply cannot address. From managing large, complex financial portfolios to curating exclusive lifestyle experiences, UHNWIs require tailored solutions that offer enhanced personalisation, heightened security, and deep insights. Fortunately, a range of specialised digital solutions exists to meet these unique demands.

Below, we explore five types of these tools along with a few specific examples of each one to provide a taste of the possibilities.

01 Luxury lifestyle platforms

Managing the lifestyles of UHNWIs involves much more than just making reservations or purchasing high-end products; it’s about accessing exclusive experiences and services that are often out of reach for the general public. Unlike mass-market platforms that cater to broad audiences, luxury lifestyle platforms for UHNWIs provide bespoke services tailored to their distinct needs—such as booking or purchasing a private island.

Examples of luxury lifestyle platforms include:

• Quintessentially, a provider of white-glove concierge services to its members.
• Myria, which calls itself “a private marketplace that offers the goods, services, and experiences you can’t Google.”
• Net-a-Porter and Mr Porter, which offer curated luxury goods.

02 Platforms for accessing exclusive assets and investment opportunities

UHNWIs often seek investment opportunities and assets that are not accessible to the general public, such as rare art, private equity, and luxury real estate. Online platforms that help UHNWIs source such opportunities include:

• Billionaire Network, a listing service for big-ticket properties, collectibles, and more.
• Artnet and Artsy, which specialise in the buying and selling of fine art.
• iCapital, which connects UHNWIs and their teams with alternative investment opportunities.
• MansionGlobal, a part of the Barron’s Group media business that provides luxury property listings.

03 Philanthropic and impact investment decision support

For many UHNWIs, philanthropy and impact investing are crucial aspects of their legacy and values. Unlike standard investment platforms, which focus primarily on financial returns, these tools help UHNWIs align their wealth with their personal values, providing insights and tools to maximise the impact of their philanthropic efforts and sustainable investments.

• S&P Global Sustainable1 is one example of a digital service providing investors with environmental, social, and governance (ESG) scoring data on publicly traded companies.
• ImpactAssets is a platform that helps UHNWIs invest in initiatives that generate both financial returns and social or environmental impact.

04 Secure digital communications

For UHNWIs, privacy is paramount, particularly when it comes to communication. Given the highly technical nature of the market for secure communication tools – in which discretion is prized – judging the popularity of any one such solution among UHNWIs is challenging.

It is fair to say, however, that UHNWIs avoid using free-to-use, mass-market digital communications tools when communicating sensitive information. While many free-to-use solutions have (and are often required by law to have) advanced security features, they often raise doubts as to whether user data is being shared in one way or another to finance the providers’ operations.

A notable example of a secure digital communications provider that appears to operate entirely on licensing fees is Swiss-based Threema, whose chat application is purported to be the only one allowed for communication among members of the Swiss Army. While many providers of such tools have “freemium” pricing models (where basic versions of applications are free to use) or claim to be financed entirely by donations and grants, all Threema users must pay a licensing fee.

05 Reporting and monitoring platforms for complex investment portfolios

Obviously, the size of their investment portfolios distinguish UHNWIs from lower-net-worth individuals. A less obvious – bust just as important – distinguishing factor is the greater degree of diversification in UHNWIs’ investment portfolios.

Both UHNWIs and smaller investors are likely to hold equities, bonds, cash, and real estate. But UHNWIs typically hold more of each of these assets as well as a wide variety of other ones such as one-of-a-kind collectibles and private equity. Getting a unified view of all their holdings and tracking the current value of each one often present significant challenges to UHNWIs.

One solution to these challenges is for UHNWIs or their teams to spend hours or even days every month with spreadsheets to manually catalogue valuable items and analyse data from the various institutions where bankable assets are held.

A better solution is to rely on a digital wealth platform to automatically aggregate this financial data through ultra-secure connections and visualise it in easy-to-understand dashboards.

The example of such a tool we know best is ours: the Altoo Wealth Platform. Among the most advanced solutions of its type, the platform:

• Makes it easy to keep track of properties, collectibles, and virtually any other valuable item in a UHNWI’s portfolio. Wealth owners can view their holdings grouped by asset class and drill down into each asset for detailed performance information.
• Offers 100% Swiss-hosted file storage and digital messaging capabilities with security on par with the most advanced such solutions on the market. Clients need not rely on third parties for such services when handling their financial lives and can streamline communications and workflows involving particular holdings. All appropriate stakeholders can be securely looped into conversations and have access to relevant documentation (such as insurance policies or mortgage contracts) directly within the platform.

Takeaway

All of the types of digital solutions outlined above share a common purpose of improving UHNWIs’ lives, whether it be by helping them enjoy unique experiences, source and evaluate opportunities to grow their wealth and legacies, maintain digital security, or stay on track towards achieving their financial goals.

Open banking is a practice by which two or more financial service providers can access each other’s data on a shared client through application programming interfaces (APIs).

By promoting competition, innovation, and customer-centric services, open banking gives wealth owners greater control over their financial data and choices.

Open banking also brings rewards to financial service providers like family offices, which have many moving parts and diverse requirements of their own. Among the key benefits of open banking for FOs are:

01 Integration of Multi-Source Data

A fragmented, inaccurate financial picture often prevents family offices from providing the expert insights and tailored service that clients expect and deserve. One of FO’s biggest challenges is integrating data from multiple banking sources. If done manually, this process can be tedious, often seems impossible, and requires advisors to spend less time serving clients. Open banking solutions automate this process to provide family officers and their clients with a more holistic view of wealth.

02 Visibility and Transparency

Open banking provides clients with greater visibility of their finances, enabling them to make more informed decisions in partnership with the FO. Wealth managers can see their clients’ overall financial situation, including where funds are flowing and potential opportunities for savings and portfolio adjustments.

03 Security and Control

Open banking enables greater control over customers’ financial data. With access to it through APIs with cutting-edge security features, FOs can innovate and improve services. Both banks and customers can be confident that they are taking no unnecessary risks, as FOs and their clients jointly determine who may access data on financial flows.

04 Efficiency and Cost Savings

Manually entering data often involves a significant possibility of human error. And even if the data is entered correctly, it may be out of date – especially when markets are volatile. A FO relying on family members to provide end-of-month or end-of-quarter statements, for example, often risks losing sight of current portfolio valuations. By automating tasks such as data entry and reconciliation, open banking solutions help not only improve accuracy but also streamline family officers’ workflows. Additionally, FOs can take advantage of an expanding range of open banking features and functionalities like investment monitoring notifications.

05 Tailored Services and Advanced Decision-Making Capabilities

Fundamentally, open banking supports an open financial ecosystem. Wealth owners can easily access a wide range of service providers. In turn, these service providers can access their clients’ relevant financial information in one place to make better-informed asset allocation decisions with the help of new tools and analytical capabilities for identifying opportunities and trends.

Open banking solutions are a game-changer for many family offices, who can use them to gain a holistic view of their clients’ finances and make more informed decisions accordingly.