2026 Risk Watch for HNW Families: Strategic & Governance Risks (Part 2)

This is a two part series to kick off 2026 with a strategic risk focus for the new year. Many of the families I work with conduct annual planning after the summer holidays and I recommend including these areas of focus in your agenda.

The first part of this series addressed compliance and regulatory pressures, either heightened focus from regulators on existing rules or new or proposed rules requiring consideration of current treatment.

The second part of this series addresses the strategic and governance pressures across families that can include investment and the global landscape, technology and intergenerational success.

Key strategic and governance issues for 2026 will be:

1. Investment Strategy in a More Fragile World

Geopolitics, climate risk, concentration risk and technology disruption are now permanent conditions, not cycles. The sooner we understand that nothing remains static and plan for the unexpected the more resilient and adaptable we will be.

Families should conduct balance sheet reviews and consider the following key risks:

• Over-concentration in legacy assets (property, private businesses, home country bias)

• Illiquidity risk in private markets

• Valuation opacity in PE / VC / private credit

• Misalignment between investment risk and family time horizons

Scenario planning, stress testing and simulations can provide forward visibility into cash flow, liquidity and downside exposure, allowing families to model capital calls, market shocks, asset repricing and unexpected spending needs before they occur. This discipline shifts the conversation from reactive decision-making to proactive preparation.

For example, a sudden drawdown in private markets or a spike in gold prices may increase reported wealth, yet still leave limited accessible cash. Without deliberate liquidity buffers, families can be forced to sell quality assets at the wrong time or defer strategic opportunities.

2. AI and Technology

Technology is both an opportunity and a risk. When managing significant intergenerational wealth, families should be run like a business. Families need a superior technology strategy to optimise the business while managing risk. 

One of the biggest mistakes I see when families set up a family office is underinvestment in technology strategy, resulting in inefficiency, duplication, high costs, a lack of controls and not staying up to date. And then we add in AI and Cyber Risk - the two biggest opportunities and risks in technology. 

AI is now embedded in investment research, reporting, legal drafting, admin, and even family communications. The risk is not “using AI”, rather using it informally, inconsistently or without governance. Family offices need a clear distinction between using AI for decision support vs decision-making. I recommend establishing a “Use of AI” policy that clearly manages risks from the appropriate use of AI tools all the way to the right settings in these tools to ensure privacy.

Managing cyber risk is ever important and unfortunately significant families will always be the target of cyber attacks. Simple processes such as ongoing cyber training for all family members and staff, enforced password resets, mandatory use of password managers and multi-factor authentication, antivirus software and enterprise-grade monitoring and filtering tools including email and web protection, device management, network firewalls, and real-time threat detection to proactively identify, prevent and respond to suspicious activity. 

3. Continuity, Capability and Control

Continuity, capability and control is the operating system of an enduring family enterprise. It is the deliberate design of structures, people and processes that ensure the family can make good decisions, manage complexity and transfer wealth and responsibility smoothly across generations.

Importantly, this is not a new or emerging risk. It has always existed. What has changed is the pace, visibility and complexity of modern family life. Governance gaps that were once manageable now compound quickly through larger balance sheets, more stakeholders, faster transitions and greater public scrutiny. Continuity requires constant attention and intentional design.

Endurance requires the ongoing strengthening of three foundations: 

• Family Office effectiveness: ensuring a clear mandate and accountability will ensure costs are controlled, KPIs are met and governance is embedded.

• Human capital: preparing the next generation, accounting for differing skills and interest levels, succession planning, clear governance and open communication.

• Family values: ensuring purpose and intergenerational alignment to guide the family with shared intent. Investing time in defining the family’s mission, vision and values will anchor the family for generations.

Conclusion

The families who endure are those who treat their enterprise with the same discipline as a well-run business: actively managing liquidity and risk, investing in robust systems and controls, and deliberately building the governance, capability and shared purpose that hold everything together. By embedding these practices into ongoing planning, families move from reacting to events to confidently shaping their future, protecting not just financial capital, but the relationships, trust and legacy that matter most across generations.

Reach out if you need assistance. Kinexis helps navigate the complexities of significant family wealth.