Wealthy families take more risks when it comes to money.

There is optimism among families about investment returns.

The wealthy are once again hungry for riskier investments, according to a survey. Ninety-seven percent of the 338 families surveyed who own their own asset management firms (family offices) expect positive investment returns in the next 12 months, Citigroup Inc. said Wednesday in its study. “Investors are very optimistic,” said Hans Hofmann, a Citi managing director. “We also see that in the kind of risk they’re taking,” he said, referring to the direct investments wealthy families make in companies during early funding rounds, which are typically riskier than later rounds.

At the same time, households have gradually reduced their cash holdings and added riskier investments. Forty-three percent have increased their stock holdings, and 42 percent have added private equity to their portfolios. More than half of the wealthy families surveyed have invested in generative artificial intelligence (AI). At the same time, however, fewer than 15 percent are using AI in their own businesses. “Investors know this is going to be important,” Hoffman said. “But they’re not sure how to use it for their own investment purposes.”

Family offices typically consist of a small group of advisers who look after assets and investments, but also succession planning, taxes and charitable commitments. Asset management banks such as Swiss UBS or Julius Baer also offer many of these services. However, if you have significant assets, it may be worth having your own staff do the managing. Consulting firm Deloitte estimates the average annual operating costs for small family offices with assets of $250 million to $500 million at $2.1 million, and for family offices with assets of more than $5 billion at $21 million. (Reuters)