Collective wealth of ultra-rich families expected to nearly double by 2030

“Wealth begets wealth” may be a tired old adage but it’s one playing out at measurably profound levels among the world’s ultra-rich individuals and families.
A new report from financial consultant firm Deloitte finds the number of single-family wealth management offices around the world currently clocks in at around 8,000, up from just over 6,000 in 2019 and headed for nearly 11,000 by 2030. The collective wealth of these families has escalated from $3.1 trillion in 2019 to $5.5 trillion now and will hit an estimated $9.5 trillion by 2030, a 189% increase. Assets under management for these family-centric operations are currently at around $3.1 trillion but expected to rise to $5.4 trillion by 2030, a level that would surpass the current global hedge fund asset management cache of about $5 trillion.
Those family financial offices typically execute wide-ranging management and planning services for their family clients. Deloitte found that while the offices are “as unique as the families themselves” most of them strive to achieve common objectives, including wealth and risk management, coordination of services, enrichment of the family’s legacy and protecting the privacy of the family’s affairs.
Broadly speaking, those with a net worth of $100 million might consider a single-family wealth management office.
So how is this relatively small group of boutique financial managers outpacing the global hedge fund industry when it comes to growing assets?
“Globally, family offices are expanding rapidly by focusing on their growing presence throughout different areas of the world, asset base, industry impact and what makes a family office successful,” Wolf Tone, Deloitte Private Global leader, said in the report. “As they continue to navigate ongoing economic challenges and geopolitical uncertainty, family offices are expanding their services, maturing their structures, focusing on their talent strategies and carefully managing their investments to ensure sophisticated and efficient operations for the future.”
Looking more closely at the nuts and bolts of those elite family offices, Deloitte found their collective surge in popularity is driven by a combination of factors, including increased wealth concentration, successful transfers of generational wealth, robust private equity and Mergers & Acquisitions markets and the pursuit of more customized investment strategies and services.
While generational wealth transfers are playing a major role in the proliferation of single-family financial offices, the report shows other pathways occupy a significant segment on the road to mega-wealth.
Deloitte analysts found about a third, 30%, of all those who have a family office are entirely self-made multimillionaires or billionaires. Just over half, 51%, of family office principals can track their wealth back to a mix of inheritance and their own earnings. And, running counter to traditional thinking, the wealth of less than 1 in 5 family office principals, 18%, is entirely inherited.
Over two-thirds, 68%, of family wealth offices have been created since 2000, according to the report, and the growth cycle is morphing the demographic of those being served by the financial managers. Currently, 41% of the clients are first-generation wealth accumulators, 30% are second-generation and 19% are third-generation.
“Off the back of gains in their operating businesses and wider investments, the world’s most affluent families have been accumulating wealth at a meteoric pace — and we expect this trend to continue,” Rebecca Gooch, Deloitte Private Global head of insights, said in the report. “With an expectation that family wealth will nearly triple between 2019 and 2030, this is spurring demand for private wealth management structures, leading to a rapid rise in the size and sophistication of the family office arena.”
Data collected through a Deloitte survey of a representative sample of family wealth offices found the average level of assets under management came in at $2 billion with individual total family assets averaging $3.8 billion.
When it comes to who is managing family wealth, the report notes a wide gender gap is prevalent but women are taking on leadership roles at an increasing rate when it comes to family enterprises.
An analysis of family financial offices broken down by region found women serve as the principals for 21% of the family offices in Africa; 20% in Europe; 18% in Asia Pacific (with 16% for Asia and 22% for Oceania-based countries); 17% in South America; 12% in North America; and 10% in the Middle East.
Here’s the geographic distribution of single-family financial offices as of this year, according to the report: