By Alex Dean, Head of Family Office, Europe and Middle East
What is UHNW?
UHNW refers to ultra-high-net-worth individuals, a key group in the world of wealth management. According to the World Ultra Wealth Report by Wealth-X, UHNW individuals are defined as people who possess a net worth of $30 million or more. They often face an array of complex financial challenges, including estate planning, wealth preservation, and global investment opportunities in assets such as real estate.
How are the needs of UHNWs evolving?
As UHNW individuals and UHNW families become increasingly sophisticated in their approach to wealth management, their needs are evolving. There’s a growing focus on diversification, particularly through alternative investments. With changes in regulations such as ELTIF 2.0, these investors are moving beyond traditional asset classes, allocating more capital into private equity, venture capital, real estate, and impact investing. These complex investment strategies require more nuanced governance and risk management. The increasing complexity of these investments makes strong governance more essential than ever. Understanding the importance of governance is key to ensuring sustainable wealth growth and preservation.
What is the role of governance for UHNW families?
UHNW families face the challenge of creating effective governance structures to ensure that wealth is managed not only for the current generation but also for future ones. Successful governance includes fostering communication among family members, resolving conflicts, and ensuring alignment on long-term goals. The process typically begins with agreeing on the family’s core values, which serve as the foundation for decision-making. These values are articulated in a family mission statement—a dynamic document that guides the family’s wealth strategy.
The family mission statement typically covers key areas such as lifestyle preservation for each generation, succession planning for family businesses, philanthropy, and long-term wealth creation. The creation of this document can be challenging, as different generations may have different priorities.
Why do UHNW families choose to establish a family office?
As UHNW families grow in complexity, many opt to establish a family office to centralise the management of their wealth and streamline governance. The structure of a family office can vary depending on the size of the family’s wealth. In its simplest form, a family office may consist of a single employee handling administrative and reporting duties, while external advisors—such as trustees, lawyers and tax consultants—manage other areas. Larger UHNW families may establish more expansive offices, employing in-house professionals specialising in law, tax, compliance, investing and M&A.
A key figure in these larger offices is the Head of Family Office, who acts as the trusted advisor and primary point of contact between the family and external service providers. The family office also plays a crucial role in reporting and tracking the family’s wealth, using advanced platforms to consolidate financial data across diverse asset classes, including private investments and passion assets. Ultimately, the family office serves as the backbone of long-term governance, ensuring that the family’s wealth, values and objectives are carefully managed and preserved for future generations.
How does IQ-EQ support UHNW families?
Our experienced team, with a proven track record in serving UHNW individuals and UHNW families, offers expert guidance to navigate this intricate landscape. We focus on safeguarding and optimising your assets while ensuring compliance and structuring your wealth for estate planning and investment opportunities. By leveraging our specialised services, UHNW families can achieve both peace of mind and strategic growth in an ever-evolving economic environment.
For more information on how IQ-EQ can support your family with tailored governance solutions, please get in touch with our expert team.
