AI and succession drive transformation in US family offices, BofA study finds

Family offices across the United States are bracing for a decade of significant change, with new leadership and technology reshaping how the country’s wealthiest families manage their fortunes.

That's according to Bank of America’s inaugural Family Office Study, which found nearly 60% of family offices expect a generational handover within the next 10 years, while artificial intelligence and automation are rapidly becoming central to investment and operational strategies.

The study, which surveyed 335 decision-makers across North America, found that 87% of family offices have not yet transitioned to the next generation. Among those with less engaged principals, nearly three-quarters anticipate the next generation will redefine the office’s mission or purpose.

“As younger generations step into leadership roles, they are poised to redefine what it means to manage multigenerational wealth – from integrating artificial intelligence to expanding philanthropic missions,” said Elizabeth Thiessen, head of family office solutions at Bank of America Private Bank.

AI and automation are already making inroads: 57% of family offices report using artificial intelligence for investment research and strategy, and more than three-quarters rely on automation for forecasting, alternative investment analysis, and portfolio modeling. Nearly nine out of 10 respondents believe AI could enhance investment returns, though many also express concerns about data security and the risk of inaccurate information.

Cybersecurity remains a critical concern as offices embrace new technologies. Nearly one-third of family offices or supported family members have experienced a cyberattack, with 40% reporting a significant impact on family assets. Despite these risks, 10% of offices managing less than $500 million have no formal cybersecurity protections in place. One chief investment officer in the study noted that “staying ahead of technological advancements, particularly in AI and cybersecurity, is crucial to protecting assets and optimizing investment strategies.”

Investment strategies are also evolving alongside technology. Family office portfolios are now nearly evenly split between marketable securities and alternative assets, with private equity, direct investments in companies, and real estate seen as the most promising opportunities.

Sixty-four percent of respondents cited investing, growing, and preserving wealth as their top challenge, while 60% expressed optimism about the outlook for US equities, private equity, and mergers and acquisitions in the coming year. And despite some measures showing a mounting sense of economic gloom, family offices managing $500 million or more, over half expect US GDP to increase.

Philanthropy is also gaining prominence, particularly among younger leaders. The study found that 51% of family offices expect philanthropic goals and strategy to play a greater role following succession. Offices with governance structures are more likely to support philanthropic missions, and nearly half of those engaged in philanthropy donate $500,000 or more annually to charitable organizations.

Amid recent debate about what makes a family office, the Bank of America study points to operational complexity as a hallmark, with many modern family offices overseeing dozens or even hundreds of bank and investment accounts, managing estate planning, and handling daily banking and staffing needs. Family businesses remain foundational, with 60% of offices founded on assets from a family enterprise and 85% still generating income from these businesses.