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Thank you to Pathstone, the modern family office, for this report.
INTRODUCTION
Working closely with SFOs is an important segment of Pathstone’s business and has allowed us the opportunity to understand several common and interrelated trends better. Below is an outline of the main trends that we continue to observe as we work with new and existing SFOs. Several trends overlap, and we have noticed that best practices include thoughtful consideration of how integrating these decisions creates the most successful path forward.

TREND 1 – LEADERSHIP
There is a demographic shift occurring within the leadership of SFOs. Many are led by an aging family member or a trusted professional that has worked with the family for decades. This transition raises a series of critical decisions. For example, analyzing the family's current service requirements and their vision for what these may look like in the future. Is the vision to maintain the SFO generationally, and will the costs outweigh the benefits? Clarity on these macro-objectives will help inform the family of a potential new leader's necessary experience and cultural alignment.

TREND 2 – TAX EFFICIENCY
Concerns about high taxes are top of mind. Questions include what strategies should be considered to create the most tax-efficient results, including analyzing if the SFO has the right fact pattern to create a for-profit management company.

TREND 3 –TECHNOLOGY & CONTROLS
SFOs have historically utilized third-party software to assist with accounting, investment performance reporting, bill pay, middle office controls, and investment administration. Unfortunately, these software packages typically do not synch with each other. Therefore, the SFO is forced to build internal controls and solutions to create customized deliverables for the family. Integrated solutions now exist and are proven to address this challenge.

TREND 4 – SHIFTING SERVICE DEMAND
Most SFOs are serving multiple generations. The younger generation is asking for an engagement model that is quite different from the traditional one. They are asking for digital delivery of timely information and instant access to data when needed, yet still would like an intimate, customized service experience.

TREND 5 – INVESTMENT PIVOT
Active managers, inclusive of alternatives like hedge funds, have been challenged to keep up with relevant benchmarks over the last decade. As a result, SFOs have pivoted and started to allocate larger percentages to private investments, both private equity and real estate.
Read the full article, "2022 Family Office Trends", from Pathstone, the modern family office.
About Pathstone
Pathstone is an independently operated partner-owned advisory firm, offering families, family offices and select nonprofit institutions comprehensive family office services and customized investment advice. Pathstone’s objective is to help clients create, manage and preserve wealth across generations. Pathstone integrates smart innovative programs with its traditional family office services to provide solutions that withstand the test of time.
Please stay safe and healthy,
Pat Soldano
President
pmsoldano@family-enterpriseusa.com
712 H Street NE Suite 1330
Washington DC 20002
202-738-4916
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