America's family offices are entering a decisive period. Leadership transitions are on the horizon for many, the next generation holds starkly different views on investment and risk, and most offices admit they are not yet ready for what comes next.
That is the central finding of the 2026 Bank of America Family Office Study: Building for Generations which surveyed 355 family office decision-makers across the United States. The offices ranged from $25 million in assets under management to more than $5 billion, with the majority holding over $500 million, according to Bank of America Private Bank.
Despite a structural shift underway in how ultra-high-net-worth families govern, invest, and preserve wealth, only 37% of respondents said their incoming principal was very prepared when a transition did occur, a figure that has drawn attention given that a quarter of offices surveyed have seen a leadership transition within the last decade.
"Today's family offices are building for the future while balancing continuity and changes today," said Elizabeth Thiessen, Head of Family Office at Bank of America Private Bank. "The families best positioned in this transition recognize that preparation goes well beyond identifying the next leader. It requires strong governance, a shared vision and the ability to adapt to changing opportunities and priorities across generations."
Family office portfolios in the US currently split roughly 55% liquid and 45% illiquid, with alternatives making up the single largest component of illiquid holdings at approximately 38% of that segment, according to the Bank of America study.
Private equity leads all alternative asset classes, accounting for approximately 27% of alternative allocations on average, and that dominance is expected to deepen with 59% of family offices planning to increase their private equity exposure over the next one to three years, while 51% of all respondents identified private equity as a top opportunity for wealth creation. Direct investment into operating companies ranked second, cited by 38% of respondents.
The trend aligns with broader industry patterns. As reported by InvestmentNews, family offices are stepping up governance and global reach as portfolio complexity grows - a trend accelerating across the sector in 2025.
Family offices managing under $500 million favor international equities more than their larger counterparts, while mid-sized offices (those between $500 million and $1 billion) express stronger appetite for real estate.
Regardless of size, relationship networks remain the primary conduit for deal sourcing, with private equity firms, family member connections, and investment banks ranking as the top three channels.
Sports franchises and related assets are emerging as a distinct category. One in five family offices currently holds a sports team or franchise, and another fifth has exposure to sports-related opportunities including infrastructure and merchandise. Among offices with at least one Gen Z or millennial principal, that ownership rate rises meaningfully.
Despite near-universal agreement on its value - 91% of offices say governance and family education keep everyone aligned - formal governance structures remain incomplete at many family offices.
Fewer than half of offices have a family education policy or program in place. Just 27% have a trust distribution policy or guiding principles on record, even though 99% of offices manage trusts and nearly a third hold trusts exceeding $200 million in value.
Family dynamics were identified as the top governance challenge by 45% of respondents, followed by the complexity of shared assets at 37% and undefined role expectations at 36%. Some 73% of offices say they plan to adopt additional governance structures within three years, suggesting an awareness of the gap between stated intention and operational readiness.
Succession preparedness is a related concern. Among those offices that have experienced a principal transition in the last decade, just 37% described their incoming principal as very prepared. Larger and more complex offices (those managing more than $1 billion with multiple principals and extensive family membership) are significantly more likely to have written investment policies, mission statements, and formal philanthropic and distribution guidelines. Smaller offices tend to rely on family meetings and informal oversight.
Advisors working with family office clients should note that personal financial responsibility, trust education, and direct investing literacy were the top three priorities cited for next-generation education programs - areas where outside financial advisors and investment firms play a meaningful supporting role.
Despite widespread credit access, only 27% of family offices currently use borrowing as a consistent component of their overall wealth strategy. Most use credit transactionally, primarily to fund real estate acquisitions, cited by 45% of respondents, or to stay invested during liquidity gaps, cited by 42%.
The strategic case for credit is well understood by a smaller cohort. Family office principals with operating businesses are more than twice as likely to use leverage consistently compared to families without business ownership (32% versus 14%, respectively). These offices also place greater emphasis on capital growth and are more likely to use derivatives and hedging programs to protect illiquid positions.
The next generation is expected to shift this behavior. Some 77% of offices with an identified successor said they anticipate that incoming principals will use credit more actively to build wealth. That expectation tracks with the broader profile of younger principals who are also more interested in alternative assets, sports-related investments, and technology-driven operations.
Artificial intelligence has moved from experimentation to regular use at a meaningful share of family offices. Some 42% report that employees currently use AI, primarily for data analysis (64%), meeting summaries (57%), and operational automation (49%). An additional 37% say they are actively interested in implementing the technology.
Eighty-three percent of family members expect their family office to continuously implement new technology solutions, according to the study - a mandate that is increasingly shaping hiring, vendor selection, and internal investment.
Against that backdrop, fraud exposure remains significant. Nearly three-quarters of family offices, 72%, report that they or an affiliated family member have experienced at least one type of fraud.
Credit card fraud is the most common incident, followed by wire fraud and check fraud. Cybersecurity ranks as a top challenge particularly for offices connected to family-owned businesses, where digital risk intersects with operating company infrastructure.
As wealth management professionals assess opportunities in the family office segment, the Bank of America data highlights a sector in active transition and where governance gaps, succession risk, and shifting investment preferences are reshaping how America's wealthiest families plan for the future.
The study, fielded in January and February 2026, was conducted by research firm Escalent and is available on the Bank of America website.
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