Family offices gain ground as private banks struggle to keep up

As trillions of dollars shift hands in the largest generational wealth transfer in history, ultra-wealthy heirs and founders are turning away from traditional private banks. Instead, they are favouring more agile, transparent and emotionally attuned models that align with their values, long-term goals and personal identities.  

This shift, driven in part by declining trust in financial institutions, was a key theme at the recent PWM/FT Live Global Wealth Management Summit in London. Family offices, unlike private banks that often combine wealth management with product sales, are viewed as offering tailored, conflict-free advice.

“Have you ever seen a client move from a family office or independent wealth manager back to a bank? I’ve never seen it in 30 years,” said Nicole Curti, president of the Alliance of Swiss Wealth Managers and CEO of Capital Y, a Geneva-based advisory firm.

Banks, she argued, are not structured to address the holistic needs of today’s wealthy families. “They cannot afford to two days with clients discussing where a son should study or how to organise family governance. That’s where family offices step in. In my opinion, this is the future of wealth management.”

Generational shift

This move towards family offices also reflects a broader cultural and generational shift. Younger clients want more control, more transparency, and advice that extends beyond financial products to family dynamics, philanthropy, and purpose.

At iVesta Family Office in Paris, many clients are first-generation entrepreneurs in their 40s or 50s who have recently exited businesses but remain professionally active. “They want to offload the mental burden of wealth management and have someone act as chairman of their wealth,” said Rémi Douchet, co-founder and CIO, speaking at the summit. “That allows them to stay focused on their work, where their real value creation continues.”

Flat-fee models, typical of family offices, are gaining traction among clients increasingly wary of the commission-based structures used by private banks. “It’s all about alignment,” he added. “If you’re being paid to sell a product, you’re not going to spend months helping a client think through complex family structures unless they invest in that product.”

While the family office model has long been established in the US, its global uptake is accelerating. “In France, 10 years ago, there were about five multi-family offices. Today, there are around 100,” said Mr Douchet. “Entrepreneurs now see it as top of mind.”

Turkey is at an earlier stage, but generational change is proving a powerful catalyst. “Younger generations want to do things differently from their parents,” said Özge Doğan, founder of Istanbul-based multi-family office Karman Beyond.

Even as universal banks expand offerings, many still struggle to provide the personal, integrated service that family offices deliver, especially across generations. “What banks aren’t doing is managing the whole thing,” said Doris Meister, chairman and CEO Emeritus of Wilmington Trust in the US. “The wealthiest families have opted to set up their own.”

Comprehensive family offices typically bring key functions in-house, from investment management to governance and tax strategy. But achieving this requires scale. “We typically think about families with at least $500mn to $1bn to hire professional management, particularly on the investment side, which is the most expensive element,” she said.

Emotional complexity

Succession planning remains one of the most critical, and often overlooked, areas of wealth management. As Baby Boomers age, the emotional and strategic complexity of transferring control becomes urgent.

“If you don’t pass decision-making while the dads are still alive to teach us, it won’t work,” said Ms Doğan, herself a second-generation wealth principal. “Imagine someone inheriting hundreds of millions at 60 who’s never had control.”

Family offices often act as neutral, trusted intermediaries, helping families navigate these sensitive transitions and bridge generational divides.

 “Children frequently feel they’ll never convince their parents,” noted Karman Beyond Ms Doğan. “But once we sit down together, lay out the options, and explain what we’ve seen in other families, something shifts. A few weeks later, they come back and say, ‘It’s time to face reality and start planning.’”

The messenger, she added, matters as much as the message: “Would you really have listened to your mother at 25? But if your uncle or your dad’s friend said the same thing, it would land differently.”

Education is also a growing focus. Capital Y launched the Y Academy to prepare next-generation heirs for leadership. “Some are entrepreneurial, others disengaged,” said Ms Curti. “But someone needs to know how to deal with bankers, trustees and lawyers when the time comes.”

Unlike banks, which often offer large-scale programmes, Capital Y tailors its approach to the unique dynamics of each family. “There’s no one-size-fits-all solution,” Ms Curti noted. “Every family is different, so we design education around their specific needs.”

Diversity on advisory teams is also essential. “Children don’t always want to speak with the same adviser their parents have seen for 20 years,” she said. “Age, background and perspective all matter.”

In the US, succession planning has matured into a defined discipline. “The financial issues are the easiest to solve,” said Wilmington Trust’s Ms Meister. “The emotional ones are far more intense.”

Drawing on decades of experience with multi-generational ultra-wealthy families, she noted the rise of specialist advisers, formal governance training, and structured legacy planning. “We’re now working with fifth-generation clients,” she said. “In this business, we deliberately hire for both IQ and EQ, because family dynamics are where the real challenges lie.”

Governance challenges

Family offices are expanding fast, and with that growth comes influence. Deloitte forecasts that family office-managed assets will rise from $3.1tn in 2024 to $5.4tn by 2030, with total family wealth in the sector expected to hit $9.5tn. But as the model matures, structural and operational weaknesses are becoming more apparent.

In Switzerland, family offices and independent wealth management firms manage around 20 per cent of private wealth, yet the market remains fragmented, with more than 1,800 entities ranging from small boutiques to multi-billion-dollar operations. Many still lack scale, formal governance and internal processes. While the family office tradition in the US dates to the 19th century, the Swiss industry has emerged only over the past three decades, as former bankers left institutions to launch client-aligned firms.

France, too, faces a similar challenge — shifting from an “artisanal model” to a more professionalised approach. “Many family offices are still tiny boutiques, lacking structured processes or long-term planning,” said iVesta’s Mr Douchet. “Some are run by former private bankers nearing retirement and may simply disappear along with their clients.”

He questioned the notion that staying small guarantees intimacy. “To deliver consistent, lasting value, you have to grow. That’s how you invest in talent, technology and strong internal processes.”

Despite growing sophistication in wealth structures, family offices often lag behind in digital infrastructure, an area where private banks currently hold a clear advantage.

“I’d start with risk: cyber security, privacy and data protection,” said Wilmington Trust’s Ms Meister. “Many family offices haven’t even conducted a basic risk assessment of how they send and receive sensitive information.”

Ms Meister also pointed to the lack of standardised, plug-and-play platforms tailored to the unique needs of family offices. “Unfortunately, the industry hasn’t produced a strong, adaptable tech solution that family offices can easily implement. Each one is forced to cobble together their own systems, and it’s complicated.”

This patchwork approach hinders scalability, efficiency, and even client trust, in an increasingly digital world. According to Deloitte, 72 per cent of family offices admit they are under- or only moderately invested in operational technology.

Passing values

For today’s rising wealth holders, performance alone is no longe enough. Values, sustainability and long-term impact increasingly drive investment decisions.

“We don’t inject values into families, but we help them understand the power of passing those values on,” said Mr Douchet of iVesta, which integrates ESG into private equity strategies and holds B Corp certification.

At Karman Beyond, Ms Doğan sees a clear generational divide in approach. “If you want impact today, you try to convince the parents. If you’re willing to wait 20 years, you’ll see it, because we’re much more conscious.”

Across the industry, values like trust, alignment and emotional intelligence now define what clients seek. As family offices mature, they are not only managing wealth but also redefining what it means to preserve and pass it on. For families seeking independence and long-term purpose, banks are no longer the default, but just one option in a fast-evolving landscape.