JPMorgan Embraces Family Offices, With 'Very Tailored' Advice
We’ve been spending a lot of time on bringing unique opportunities to these clients, particularly in private markets, as well as the tax efficiency of their portfolio.
What role do you play in tax planning, then?
We spend a lot of time with our clients’ outside tax accountants and lawyers as they think through smart, effective estate planning, especially with the sunsetting of the Tax Cuts and Jobs Act [on Dec. 31, 2025].
There’ll be a change in the lifetime gift tax exemption that families have been able to utilize.
So we’re spending a lot of time with clients on how best [to take] that exemption before Jan. 1, 2026.
Talk about the range of other services you provide to family offices.
Investment management, access to alternative investments, custodying, trustee services, philanthropic work.
More bespoke services include cybersecurity advisory, matrimonial planning and advice about operating private businesses.
What sort of matrimonial planning?
We’ve brought a matrimonial attorney in-house to help with [issues] like a child’s getting married to how to deal with a marriage dissolution. We’re there to help as a sounding board.
How critical do family offices regard cybersecurity?
Cybersecurity is one of the most asked-for services from many of our largest family office clients. We have an advisory that works with our Private Bank clients on how to protect themselves in their business and at home — [including addressing] the next generation.
J.P. Morgan Private Bank’s Global Family Office Report showed that although nearly a quarter of the family offices surveyed suffered exposure to a cybersecurity breach or fraud, only 1 in 5 said they have cybersecurity measures in place. Why is that, and what’s the firm doing about it?
Breaches have become much more sophisticated, particularly with the aid of AI tools and bots. Many families lack the resources and experience to address this rapidly evolving threat.
JPMorgan continues to invest in the latest technology to protect our clients’ data and accounts. We have a dedicated team of cyber specialists that help with active education and advisory.
One of the other findings is that, in “a multiyear shift,” family offices have been investing more in alternative investments. Why — and what are the implications for the future?
Family offices typically can hold assets for decades and benefit from the [risk of the] “illiquidity premium” of higher returns.
Our family office clients are heavily allocated to alternatives, making investments across private equity, real estate, venture capital, hedge funds and private credit.
They continue to allocate roughly 20%-25% of portfolios to public equities, as well as to fixed income and cash.
[In fact], cash allocations averaged close to 9%, which are levels that appear high relative to history.
How does JPMorgan help family offices prepare the next generation that will inherit the family wealth?
There isn’t a one-size-fits-all approach, but there are often [some] themes and best practices. For example, many look to philanthropy or professional involvement in a family business as effective ways to prepare the next generation.
In our survey, we saw that U.S.-based family offices are most likely to engage rising generation family members in philanthropy as an entry point to preparing them for greater responsibilities.
