Heirs Seen Steering Family Offices Toward AI, Alternatives and ESG, Bank of America Survey Finds

A new survey indicates that most family offices expect the next generation to overhaul investment priorities, accelerating the use of technology, broadening exposure to alternative assets and expanding commitments to environmental, social and governance strategies.

Bank of America’s poll of 335 family offices—60% of which oversee at least $500 million—shows that 87% have not yet transferred wealth to heirs. Nonetheless, 59% anticipate handing over significant assets within the next decade, setting the stage for notable changes in how the money is managed.

Expectations for Mission Shifts

According to the study, 35% of family offices whose principals remain deeply involved in operations believe successors will revise the firm’s mission or purpose. That figure climbs to 73% when the current principals are less engaged in daily decision-making. Bank of America said heirs often favor streamlined structures, greater philanthropic focus or, in some cases, dissolution of the family office altogether.

The likelihood of internal conflict also rises when founders are detached from governance. Nearly half (48%) of offices with less-involved principals forecast increased family disputes, compared with 29% when principals play an active role.

Technology and Artificial Intelligence

Digital tools are already advancing within the sector. More than half of surveyed offices have experimented with artificial intelligence for market research and administrative tasks, and satisfaction rates are generally high. Adoption correlates with asset size: 73% of offices managing at least $1 billion report using AI, versus 40% of those overseeing under $500 million.

Respondents broadly expect heirs to push technology further. Regardless of current principal involvement, the majority anticipate that successors will expand AI deployment across investment analysis, risk monitoring and operational workflows.

Growing Appetite for Alternatives

Alternatives remain a cornerstone of family-office portfolios, averaging 34.5% of assets—nearly matching the 36.4% allocated to marketable securities. Asked about the future, 56% of offices with hands-on principals and 73% with less-engaged principals foresee heirs increasing allocations to private equity, direct company investments and real estate. These three areas rank as the most favored avenues for creating additional wealth.

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Cryptocurrencies represent a small but rising position. The current average allocation is 6.4%, yet a slim majority believe the next generation will raise crypto exposure.

Interest in ESG Endures Despite Market Outflows

Millennial and Generation X beneficiaries are widely expected to maintain or lift spending on sustainable or impact strategies. That forecast stands even as ESG-labeled funds recorded roughly $55 billion in net outflows last quarter, driven largely by redemptions at BlackRock, according to Morningstar. Survey participants cited a strong conviction that values-based investing will remain integral to how heirs deploy capital.

Economic Outlook and Core Challenges

Despite potential internal transitions, sentiment on broader markets is upbeat. Six in ten family offices express optimism toward U.S. equities, private-equity opportunities and merger-and-acquisition activity over the coming year. Among firms controlling at least $500 million, more than half expect U.S. gross domestic product to expand during the same period.

Still, preserving and growing wealth tops the list of concerns, cited by 64% of respondents. Many view deeper diversification, heavier technology use and direct investments as key tools for meeting that objective once heirs assume control.

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