Ask a family office about its portfolio and you will get a precise answer. Ask about its succession plan and the room often goes quiet. The UBS Global Family Office Report 2025 puts numbers on the discomfort: just 53% of family offices have a wealth-succession plan in place for family members, and only 26% consult the next generation from the outset of planning. More than a third involve them only after the first generation has already decided.
The contrast with investment capability is striking. The same families run sophisticated, in-house functions: 86% manage their own strategic asset allocation and 80% their own portfolio risk. The machinery for investing is mature. The machinery for handing it on is not.
UBS Global Family Office Report 2025
Why governance, not returns, decides longevity
The old saying that wealth rarely survives three generations endures because the threat is rarely investment performance. It is the breakdown of shared understanding: a family that never agreed how it makes decisions, never wrote down its principles, and never gave the next generation a reason to feel ownership. Governance is the system that turns goodwill into something durable.
Good family governance does a few unglamorous things well. It states the purpose of the wealth. It defines who decides what, and how disagreements are resolved. And it makes the reasoning behind major decisions visible, so that a choice made today can be understood by a family member who joins the conversation a decade from now.
Alignment is not unanimity. It is a decision everyone understands and has endorsed, recorded in a way that survives the meeting.
Aligning a family is a process, not an event
Risk tolerance is rarely a single number for a family. Ask three members and you will often get three answers, shaped by age, temperament and circumstance. The work is not to pretend the differences away but to reconcile them: to separate what a family is willing to bear from what it can afford to bear, and to land on a position everyone has seen and accepted.
Done in a meeting and never recorded, that alignment evaporates. Done as a structured step, with each participant's position captured and the agreed decision written down and versioned, it becomes part of the family's governance. The investment policy is the natural home for it, because the policy is where intentions become constraints the portfolio must respect.
Closing the gap
The encouraging news is that the governance gap is addressable, and earlier than most families think. Bringing the next generation into the policy conversation while the first generation is still active does two things at once: it educates the heirs and it tests the plan against their questions. A succession plan that has survived the next generation's scrutiny is worth more than one drafted in private and presented as finished.
The structures that hold it together
Governance does not have to mean bureaucracy. For most families a few light structures carry the weight. A short family charter sets out the purpose of the wealth and the principles that govern it. A family council, meeting on a regular rhythm, gives the next generation a seat before they hold the assets. And an investment policy translates those principles into constraints a portfolio can be tested against. None of these is complicated. What they require is the discipline to write things down and revisit them.
The cost of skipping this work is rarely visible until it is acute. Disputes over an estate, a forced sale to meet a tax bill nobody planned for, a next generation that feels handed a balance sheet rather than a purpose: these are governance failures wearing financial clothes. They are also, almost always, avoidable with earlier and more honest conversation.
Quarterly, not once a generation
The most resilient families treat alignment as a recurring discipline rather than a one-off event. Circumstances change, members join, and a position agreed five years ago may no longer hold. A regular review, in which the policy is revisited and the family re-endorses or adjusts its direction, keeps the plan alive and keeps the next generation engaged. It is the difference between a document that is signed and shelved and one that is genuinely the family's own.
Family offices have spent a decade professionalising how they invest. The families that endure will spend the next decade professionalising how they decide, and writing it down while there is still time to discuss it.
Sources: UBS Global Family Office Report 2025 (317 single family offices, average net worth $2.7bn). Figures are survey results.