Family offices view a global trade war as the biggest risk to investments this year, while major geopolitical conflict is their greatest concern for the next five years, UBS’s Global Family Office Report 2025 has revealed.

It found that 70 per cent were worried about the risks posed by a global trade war this year, followed by major geopolitical conflict (52 per cent), higher inflation (44 per cent), and higher interest rates and global recession (both 33 per cent).

Over the next five years, their greatest concern was geopolitical conflict (61 per cent) followed by recession (53 per cent), debt crisis (50 per cent), and climate change (48 per cent).

Despite their concerns for 2025, more than half (59 per cent) of family offices planned to take the same amount of portfolio risk over the next 12 to 18 months as in 2024.

When asked about the key challenges in managing portfolio risk, 38 per cent pointed to finding the right risk-offsetting asset or strategy, while 29 per cent mentioned the predictability of safety assets.

Four in 10 (40 per cent) saw relying more on manager selection and/or active management as a top strategy to enhance portfolio diversification, followed by hedge funds (31 per cent), increasing exposure to illiquid assets (27 per cent) and high-quality short duration fixed income (26 per cent).

Allocations

Amid the risk of a trade war, family offices seemed to be sticking with their long-term investment objectives, with the asset allocation split between traditional and alternative investments remaining relatively stable.

However, they also appeared to be increasing investments that seek to deliver greater exposure to long-term growth trends, yields, and diversification, according to UBS.

It found that over a third (35 per cent) intended to further amend their strategic asset allocation in 2025, tending to favour the same investment themes.

Family offices expecting to amend their asset allocations planned to increase their allocations to developed market equities from an average of 26 per cent to 29 per cent, while private debt allocations were set to rise to an average of 5 per cent.

Meanwhile, allocations to developed market fixed income were set to rise to an average of 17 per cent.

Of the family offices planning asset allocation changes, many looked set to reduce exposure to private equity in 2025, down from 21 per cent to an average of 18 per cent, although some anticipated an increased weighting in the longer term.

Succession planning

UBS’s report found that the proportion of families with wealth transfer plans in place had risen from 47 per cent in 2024 to 53 per cent in 2025.

However, it warned that the proportion remained low, especially given the risks of founders passing away without a will or estate plan.

Almost a third (29 per cent) of those without a plan said the beneficial owner did not see it as a priority yet or thought they had plenty of time to do it in the future, while 21 per cent had not decided how to divide their wealth and 18 per cent felt they did not have time to discuss it.

The greatest challenge for those with succession plans in place was ensuring the wealth transfer was tax efficient, cited by 64 per cent of family offices, followed by establishing the right legal structures (48 per cent), working out how to protect assets through the generations (46 per cent), and preparing the next generation to take the wealth on responsibly (43 per cent).

“At a time of increased volatility, global recession fears and following a near unprecedented market sell-off in early April, this latest edition serves as a good reminder that family offices around the world are first and foremost pursuing a steady, long-term approach, as they focus on preserving wealth across generations,” commented UBS Global Wealth Management head of strategic clients, Benjamin Cavalli, and head of GWM solutions, Yves-Alain Sommerhalder, in the report foreword.

“Even with the survey largely conducted in the first quarter, family offices were already acutely aware of the challenges posed by a global trade war, identifying it as the year’s greatest risk.

“Yet in interviews conducted following the market turmoil that erupted in early April, they reiterated their diversified, all-weather strategic asset allocation.

“Some of the most notable changes based on the latest survey include a shift toward developed market equities, with family offices likely seeking to access structural growth opportunities.

“They also increased investments in private debt possibly in search for extra yield and some indicated that they are planning to increase developed market fixed income allocations perhaps in a bid to diversify.

“While the global macroeconomic and political environment continues to be marked by rapid changes and a high degree of uncertainty, this survey offers a glimpse of what family offices expect over the coming years. And, most importantly, it provides a snapshot into the thinking of family offices in different regions, their objectives, preferences and concerns.

“Above all, this report is the result of constructive collaboration with the contributing families, executives and advisers.”

---