Short-Term Tariffs, Long-Term Turmoil: Inside the Family Office Fear Gauge

Short-Term Tariffs, Long-Term Turmoil: Inside the Family Office Fear Gauge

Even before the so-called «Liberation Day», many family offices had already named the trade war as the top risk when managing their portfolios, according to a UBS report. But in the longer term, the possibility of a major geopolitical conflict is the leading concern.

More than two-thirds (70 percent) of family offices named a global trade war as the most worrying risk in the next 12 months, according to UBS’ «Global Family Office Report 2025».

The survey was conducted from January 22 to April 4 this year, which was further supplemented by in-depth interviews between April 9 and May 7.

«Even with the survey largely conducted in the first quarter, family offices were already acutely aware of the challenges posed by a global trade war, identifying it as the year’s greatest risk,» said Benjamin Cavalli, head of strategic clients at UBS Global Wealth Management. «Yet in interviews conducted following the market turmoil that erupted in early April, they reiterated their diversified, all-weather strategic asset allocation.»

Longer Term Concern

However, family offices viewed the trade war and US President Donald Trump’s tariffs as a much less concerning matter in the longer term. Over the next five years, a major geopolitical conflict was the top risk, according to 61 percent of respondents, followed by the possibility of a global recession (53 percent) and a debt crisis (50 percent). Only 40 percent said the trade war was a top worry.

In terms of managing portfolio risks, finding the right risk-offsetting asset or strategy (38 percent), predictability of safety assets such as instability in correlations (29 percent) and costs or fees (26 percent) were the top challenges cited.

Asset Class Preferences

In terms of investments, developed market equities were the most preferred asset class (46 percent), followed by direct private equity investments (37 percent), private equity funds (34 percent), and emerging market equities (34 percent). By region, Asia Pacific ex-Greater China was the top target for increasing investments (35 percent), with North America (32 percent) in a close second.

The sixth edition of the report was based on responses from 317 family office clients with an average net worth of $2.7 billion from various markets in the US, Latin America, Asia Pacific, Switzerland, and the rest of Europe and the Middle East.