In 2025, wealth management firms continued to experiment with and leverage artificial intelligence, and the total costs associated with it were not readily clear. Among dozens of top firms representing trillions of dollars of wealth surveyed by F2 Strategy, a consultant to wealth and asset managers and family offices, only 14% had a dedicated line item for AI in their technology budgets.
That suddenly changed this year. In another F2 survey in May, 67% of those firms surveyed had a new dedicated line item for AI spending.
“The sharp increase in budget specificity demonstrates firms’ movement from AI experimentation to deployment. We don’t expect a slowdown in 2027,” F2 said in its report. Firms said they were focused on using AI to become more efficient, not generate revenue, and there was significant dispersion among their capabilities. The “leaders” that had assembled an “agentic stack” (usually a combination of Microsoft Copilot, domain AI, and custom agents) were already one to two years ahead of all others.
While family offices exist to meet wants and needs that commercial organizations can’t or won’t, they can still learn from wealth managers.
But is AI getting the same line-item treatment at family offices?
“My initial view is that most family offices today do not have a dedicated budget line item specifically for artificial intelligence. In my experience advising family offices, there is tremendous interest in AI, but not all of that interest has yet translated into formal AI budgets,” Michael Perez, a managing director at F2 Strategy, who works with family offices to improve their technology, told Modus.
At family offices, Perez said, AI is getting funded through the usual expense categories: information technology, software and apps, investment reporting and analytics, accounting systems, document management, and operational improvement. That is expected. Virtually all the software used to support those business activities now includes AI tools of some kind, or is launching them.
Addepar launched Addison this year; Arch hired a new CTO, who has the explicit directive of unlocking AI insights for its users; iPaladin is investing in AI capabilities; the education platform Tamarind Learning said it was raising capital partly to build AI tools; and many others are doing the same. (Related: A surge in new family offices after SpaceX and other expected mega IPOs this year has sparked a total software war over making them customers.)
Seeing an opportunity, a herd of consultants has also emerged to help family offices navigate and make decisions about their own fragmented AI universe; LinkedIn feels swamped with content from some of them about it (or at least this reporter’s feed is).
Dedicated line item or not, AI is not a standalone software exercise.
“Family offices should first establish a strong technology foundation and future-state operating model, then determine where AI can meaningfully reduce manual effort, improve consistency, and increase operational capacity. After all, AI can't fix disconnected systems any more than buying a faster printer fixes a broken accounting process. (I've yet to see that work.),” Perez wrote in an email.
AI is an “accelerator” of an operating model, not a substitute, and offices that recognize and achieve that will spend more on it and analyze that spend like wealth management firms are already doing.
“I suspect that as family offices move from AI experimentation to enterprise adoption over the next few planning cycles, we’ll begin to see dedicated AI budget line items emerge,” Perez said. “Until then, the more important question is not, ‘Do we have an AI budget?’ but rather, ‘What business problems are we trying to solve, and where can AI deliver measurable value?’”
The 2026 US Open Tennis Championships are only a month away—do you have your seat yet?
Privée Odyssey, a private brokerage for unique goods, services and experiences, helps clients make the tournament unforgettable every year.
Privée is a white-glove point of contact for a distinct network and, with the utmost discretion, works with ultra-wealthy individuals, their family offices and financial advisors.
2026 US Open Tennis Championships
DATE: Sunday, August 30th through Sunday, September 13th
VENUE: USTA Billie Jean King National Tennis Center (NYC)
ACCESS:
• Courtside seats
• Suite reservations
• Aces and Champions Bar & Grill
Interested?
Simply email Privée using the link below for options curated for you or your clients.
Don't need the suite but want to attend the US Open and other events?
Explore other opportunities with Privée using the link below.
More News
- Last week’s Modus exclusive: iPaladin Gets a New Patent and a Favorable Court Ruling in Its Lawsuit Against Orca.
- Speaking of AI: d1g1t launched its MCP and Advyzon launched AI within its platform.
- And is AI in the family office = the “Frankenstein” monster?
- Review Says Gates Foundation Did Not Participate in Epstein Crimes.
- Ink routinely spills everywhere about single-family offices investing more money directly in private companies. It’s happening; this is technically true.
There are more offices, they are getting wealthier, and generally their investment management is more sophisticated than ever—which means more dollars are being invested and more often. But is this a sea change in the way the richest private investors invest? As a slice of family-office portfolios (or at least the portfolios of hundreds of large offices surveyed by UBS), offices are actually allocating less to both private-equity funds and directly in companies. Nonetheless, this is a topic Modus readers are interested in.
“Direct deals” might chiefly be a cool thing to do and to tell people about, but many offices have the right combination of expertise and network to create worthwhile opportunities to invest in private companies directly, and choose to do so for various reasons. They strive to generate higher returns than fund companies, or think they can do as good a job without paying the associated fees. Maybe an office likes a business and its long-term prospects, and those things align with the office's investment timelines or personal interests.
Offices also invest directly in private companies because they seek more “control” over when they can exit those investments, and how the companies are managed. Everyone in the latter camp should read “Making the Leap from Corporate Leader to PE-Backed CEO” in Harvard Business Review.
Finding good leadership for private companies with “bolder value-creation plans, and increasingly complex transformations” is getting harder, according to the authors.
“In recent years our PE clients have increasingly recruited leaders from corporate talent pools, and more corporate C-suite executives now view PE-backed firms as a compelling pathway to their first CEO role. That trend has been fueled by the rapid growth in the number of PE-owned businesses and the resulting supply-demand imbalance for CEOs with experience running them.”
Whoever “controls” a portfolio company’s leadership—whether it’s a PE firm or a family office—has the job of finding those leaders, and it’s getting harder… - …but good news! The number of NDAs was up 7.2% year over year in June, suggesting that a private markets recovery is underway.
- Heirs apparent: meet the billionaire scions fighting to escape the family shadow.
- Devon Pendleton at Bloomberg wrote a long feature about dinos as an asset class.
Jobs
- The IKEA Foundation, the independent philanthropy organization founded by Swedish entrepreneur Ingvar Kamprad that “fights global warming with and for the many people,” is hiring its first-ever director of impact investing in Leiden, the Netherlands.
- Bank of America is hiring a managing director and family office strategist in New York. In a sentence, this person’s job is to deliver an “institutional-quality family office experience that differentiates the Private Bank in the $100M+ wealth segment.” Tall order!
Other Stuff
- Follow Modus on LinkedIn. 2,150+ other people do because it only posts relevant stuff a few times per week—no AI slop clogging up your feed from us!
- Have a news tip? Share information in confidence by replying to this email, or messaging me on Signal using a personal device that your employer cannot access: +1 330-962-6441.
- Modus has never had a better pipeline of original journalism and sponsors, and there’s some exciting stuff coming this fall. Want to sponsor the newsletter and be a part of it? Fill out this form for the media kit.
I'll be in...
- Brooklyn, at home, hosting some family visiting.
- Edmonton, Alberta, at “the cabin” for the August long weekend.
- Geneva, Lausanne, Bern, Zurich and Dubrovnik in mid-August.
