Family Is What Threatens a Family’s Fortune. Tales From Those in the Know.

The biggest risk family offices face isn’t taxes, regulations, or investments that go south—it’s the family itself, according to the executive of one of these offices.

This executive is speaking from experience. The rich, self-made patriarch he works for hasn’t made a succession plan for his family office despite being in his 70s and unhealthy. Without a plan, the patriarch’s wife and two of his three adult children are on a spending path that could deplete half the family’s wealth by the third generation, the executive said in an interview for a Deloitte Private report published on February 28.

“Overspending is the biggest risk—the numerous houses they have bought that need to be managed, the household staff, the drivers, private jets, yachts, et cetera,” he said. “They have become accustomed to a certain lifestyle.”

The interview was one of 10 experiences of anonymous family office executives that revealed the complexity of managing wealth for super large, super rich families. Their stories are offered to lift a veil on these notoriously private enterprises, “to help the family office community learn from the best about how to successfully navigate the complicated world we live in and plan for long-term success,” according to Rebecca Gooch, global head of insights at Deloitte and a report author.

These offices typically oversee investing and wealth management, but also tasks ranging from day-to-day financial management to estate planning. According to a September report from Deloitte, the number of single-family offices globally increased nearly 31% to an estimated 8,030 last year from 6,130 in 2019, while assets under management rose by 63% to $3.1 trillion.

The rich, ailing patriarch is failing to put a succession plan in place because he fears upsetting those close to him who have taken on senior roles in the family office, despite lacking competence, the executive said.

Deloitte included this case study to show that challenges with succession are common within the wealth community, and are rarely discussed in public. “Normally, they are too private to do that, and once a family loses their wealth, they are no longer captured in family office studies,” Gooch said. “In turn, this is a very interesting and personal warning to the community.”

By contrast, the CEO of another family office described how much he enjoyed working for one of the wealthiest and most high-profile people in the world who wants to spend down his fortune by combating climate change and supporting science and research into neurodegenerative diseases. “We are here to look after the principal, manage what he has, and frankly, to give his money away to good causes,” the CEO said.

The way this family tackles issues is innovative, even among family offices, Gooch said. “The team looks at a problem, such as climate change, and thinks about how to tackle it from a variety of perspectives,” she said. “They look at it from a sustainable investing angle, a philanthropy angle, and a political action front to see if policy changes can make a positive difference.”

Another large, prominent global family—with their main offices in Africa and the U.K.—decided it best to split its operations into two branches to cater to separate wings of the family, a move that runs counter to the more common path of keeping a family together to achieve economies of scale and to avoid redundancies, according to a chief operating officer with the family.

“It was a painful process, but in hindsight, it was the right decision,” the COO said. “Families should feel empowered to do good in their respective ways.”

Other families detailed their experiences with cyberattacks, including the CEO of a U.S.-based office that suffered two attacks in quick succession. In separate research published late last year, Deloitte found 43% of family offices had a cyberattack in the past 12 to 24 months, up from 15% in 2016. Yet nearly a third don’t have a cybersecurity strategy in place, Gooch said.

Although many families now have stories to tell, they “still have a long way to go before they are adequately prepared—and the threats around them, particularly with AI and deep fakes, are rapidly growing in sophistication.”

Corrections & Amplifications

The rich, ailing patriarch described in the report is failing to put a succession plan in place because he fears upsetting those who have taken on senior roles in the family office. An earlier version of this article incorrectly said it was family members who have taken on senior roles.

Yet nearly a third of those surveyed don’t have a cybersecurity strategy in place. An earlier version of this article incorrectly said it was more than a third.

Former New Hampshire Gov. Chris Sununu delivered a warning to Treasury Secretary Scott Bessent during a recent visit to Washington: Already-high airfares will surge if the war in Iran doesn’t end soon.

Sununu, a Republican who represents some of the biggest airlines as president of the industry group Airlines for America, has for weeks sounded the alarm to Trump administration officials about the economic fallout from high jet fuel prices. The war, Sununu has argued, must come to a close soon, or things will get worse.

Administration officials have gotten the message.

Privately, President Trump’s advisers are increasingly worried that Republicans will pay a political price for the rising fuel costs, according to people familiar with the matter. Many of those advisers are eager to end the war, hoping prices will begin to moderate before November’s midterm elections.

The fallout from the U.S.-Israeli attack in late February has slowed traffic through the Strait of Hormuz, a vital shipping lane, triggering a sharp increase in oil, gasoline and jet-fuel prices.

That means consumers are grappling with high costs ahead of the summer travel season, as they consider vacation plans.

Sixty-three per cent of Americans said they put a great deal or a good amount of blame on Trump for the increase in gas prices, according to a new poll conducted by NPR, PBS and Marist.

More than 8 in 10 Americans said struggles at the gas pump are putting strain on their finances.

Jet-fuel prices roughly doubled in a matter of weeks after the war began, and they have remained high. Airlines have said that will add billions of dollars of additional expenses this year, squeezing profit margins.

U.S. airlines spent more than $5 billion on fuel in March—up 30% from a year earlier, according to government data.

Carriers have been raising ticket prices, hoping to pass the cost along to consumers, and they are culling flights that will no longer make money at higher price levels.

In March, the price of a U.S. domestic round-trip economy ticket rose 21% from a year earlier to $570, according to Airlines Reporting Corp., which tracks travel-agency sales.

So far, airlines have said the higher fares haven’t deterred bookings and they are hoping to recoup more of the fuel-cost increases as the year goes on.

Earlier this week, Trump said the current price of oil is “a very small price to pay for getting rid of a nuclear weapon from people that are really mentally deranged.”

Secretary of State Marco Rubio told reporters that if Iran got a nuclear weapon, the country would have more leverage to keep the strait closed and “make our gas prices like $9 a gallon or $8 a gallon.”

Trump has taken steps in recent days to bring the war to an end. Late Tuesday, the president paused a plan to help guide trapped commercial ships out of the Strait of Hormuz, expressing optimism that a deal could be reached with Iran to end the conflict.

Crude oil prices fell below $100 a barrel on Wednesday, after reports that Iran and the U.S. are working with mediators on a one-page framework to restart negotiations aimed at ending the conflict and opening the strait.

Sununu said Trump administration officials are conscious of the economic fallout from the war: “They get it…and I think that’s why they’re trying to get through the war as fast as they can.”

But he cautioned that it could take months for prices to return to prewar levels.

“Ticket prices won’t go down immediately” after the strait is fully reopened, Sununu said. “You’re looking at elevated ticket prices through the summer and fall because it takes a while for the prices to go down.”

Since the initial U.S.-Israeli attack in late February, Sununu has met in Washington with National Economic Council Director Kevin Hassett, representatives from the Transportation Department and senior White House officials.

A White House official confirmed that Hassett and Sununu have discussed the effect of increased fuel prices on the airline industry. The official said the conversation touched on how the industry can mitigate the impact of high jet fuel prices on consumers.

“The president and his entire energy team anticipated these short-term disruptions to the global energy markets from Operation Epic Fury and had a plan prepared to mitigate these disruptions,” White House spokeswoman Taylor Rogers said, pointing to the administration’s decision to waive a century-old shipping law in a bid to lower the cost of moving oil.

Rogers said the administration is working with industry representatives to “address their concerns, explore potential actions, and inform the president’s policy decisions.”

A Treasury Department spokesman pointed to Bessent’s recent comments on Fox News that the U.S. economy remains strong despite price increases. The spokesman said Treasury officials have met with airline executives, who have reaffirmed strong ticket bookings.

“We’re cognizant that this short-term move up in prices is affecting the American people, but I am also confident, on the other side of this, prices will come down very quickly,” Bessent told Fox News on Monday.

The war has already contributed to one casualty in the industry: Spirit Airlines. Company representatives have said they were forced to close the airline because the sustained surge in jet-fuel prices derailed the company’s plan to emerge from chapter 11 bankruptcy.

The Trump administration and Spirit failed to come to an agreement for the company to receive a financial lifeline of as much as $500 million from the federal government.

Transportation Secretary Sean Duffy has argued that the Iran war wasn’t the cause of Spirit’s demise, pointing to the company’s past financial struggles, as well as the Biden administration’s decision to challenge a merger with JetBlue.

Other budget airlines have also turned to the federal government for help since the U.S.-Israeli attack. A group of budget airlines last month sought $2.5 billion in financial assistance to offset higher fuel costs, and they separately wrote to lawmakers asking for relief from certain ticket taxes.

Family Is What Threatens a Family’s Fortune. Tales From Those in the Know.

Administration officials have spoken to the airline industry, which has voiced concerns about the rising costs.