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.

DeepSeek just might derail the stock market’s rally.

The S&P 500 hasn’t had a correction , a 10% pullback from a high, since October 2023. Investors kept buying throughout 2024 despite angst surrounding the Federal Reserve and interest rates, not to mention numerous international concerns.

But now, worries about cheaper artificial intelligence models from the Chinese-developed app named DeepSeek may be the excuse that investors were waiting for to finally sell shares in earnest. Stocks plunged Monday .

The declines were biggest in ing tech companies, such as Nvidia , Broadcom and Microsoft . But other sectors, namely manufacturing and the utility or energy stocks that have big ties to the AI theme, were hit hard as well

The S&P 500 and Nasdaq Composite tumbled 1.5% and more than 3% respectively. The Dow Jones Industrial Average , which is less exposed to tech, gained nearly 300 points, or 0.7% .

The market is now closer to correction territory than it has been since August , when worries about a surge in the value of the Japanese yen versus the dollar spooked investors and led to a spike in volatility. But the major stock indexes still have a way to go before the declines from their peaks reach 10%.

The S&P 500 ended Monday at around 6012 , putting it just 2% below its record high. The blue-chip index would need to fall another 8% to just above 5500 to reach correction status. The Nasdaq is closer: It has fallen more than 4% from its peak and is 6% above the correction- territory level of 18,156.50.

But even before Monday’s DeepSeek bombshell, there were growing concerns that stocks may head into a correction. Barry Bannister, chief equity strategist at Stifel, recently reiterated a July call for the S&P 500 to fall 10% from its peak. He thinks it will drop to about 5500 later this year.

Bannister has been fairly bearish for the better part of a year. He said in a report Sunday that there is too much optimism about fiscal stimulus from President Donald Trump; the notion of American exceptionalism, or that stocks here have better prospects because the U.S. economy is more innovative and entrepreneurial; and hype about the Magnificent Seven of tech.

Bannister worries that core inflation and longer-term bond yields will remain higher for longer, creating a “a mild case of stagflation”—the dreaded combination of stagnant growth and persistent inflation. That may mean fewer Fed rate interest-rate cuts until the economy actually weakens, “which itself is not bullish,” Bannister wrote.

Trump’s threat of tariffs and stricter immigration policies, which would boost the cost of imported goods and potentially drive wages higher by curtailing the supply of labor, may also stoke fear of more persistent inflation.

So what should investors do now?

Bannister argues that “defensive value” stocks, such as healthcare and consumer staples companies, should outperform. Investors seem to agree: Both the Health Care Select Sector SPDR and the Consumer Staples Select Sector SPDR exchange-traded funds were up more than 2% as the broader market fell on Monday.

Bannister likes utilities too, but that sector is trickier. The group as a whole sank Monday, led lower by significant drops in Vistra and Constellation Energy , the two utilities that have gotten the biggest boost from AI’s demand for energy. But shares of classic, less exciting, regulated utilities, such as Duke Energy, Dominion Energy, and Xcel Energy , rallied. All three stocks have big dividend yields.

Dividend payers across all sectors could hold up better in a suddenly more volatile market. Simeon Hyman, global investment strategist with ProShares , told Barron’s that companies that pay dividends tend to be more stable. Companies may pull back on plans to buy back more stock or invest in their future if conditions change, but with rare exceptions “once you commit to dividend growth, you stick with it,” he said.

The SPDR S&P Dividend ETF and ProShares S&P 500 Dividend Aristocrats ETF , which recently added FactSet Research System , Erie Indemnity , and Eversource Energy to the fund, were both up nearly 2% Monday.

Still, even investors in dividend stocks need to be wary. There could be more downside ahead for the broader market. Simply put, stocks are arguably long overdue for a correction.

“The last time the market entered an official correction was 309 trading days ago, spanning well beyond the average number of 173 trading days without a correction since 1928,” Adam Turnquist, chief technical strategist for LPL Financial , said in a report last week.

There is a case to be made that there was too much optimism on the part of investors. Katie Stockton, founder and managing partner of Fairlead Strategies, noted that the Cboe Volatility Index, known as Wall Street’s fear gauge, recently fell to levels in the midteens from a three-month high of nearly 28 in mid-December. She thinks a VIX reading that low was reflecting complacency. The VIX surged to just under 20 Monday.

Stockton now thinks that Monday’s market pullback could lead to more downside for the next few weeks. She said investors should keep an eye on two key technical support levels for the S&P 500: the closing level of about 5783 that it traded at on Election Day, and if stocks dip below that, the 200-day moving average of 5608.

Remember, the level that would bring the market into correction territory is just above 5500, in flirting distance from the 200-day average.