The quiet rise of the Family CIO, and why succession is so important

By Susie Grehl, Executive General Manager, Wealth & Private, Commonwealth Bank

Across Australia, wealthy families are managing increasingly complex life, investment and financial priorities.

These dynamics are partly driven by demographic and social forces and the accelerating movement of wealth across generations. Generation X now holds the largest share of wealth, with women more likely to be the primary beneficiaries. Many families are simultaneously supporting younger and older family members, funding lifestyles and ventures while also seeking investment outcomes that balance income, capital preservation, long-term growth and legacy.

As a result, more families must think like capital allocators when managing competing priorities, particularly as wealth is passed down. Decisions involve deliberate trade-offs across time horizons, liquidity needs and family circumstances. This shifts the focus away from individual assets towards a more holistic, family-centred view of wealth stewardship.

Navigating these demands means families are building capabilities once associated with professional investors. This includes deeper investment literacy, governance awareness, and, crucially, a clearer view of the purpose of wealth decisions. This shift is fuelling the quiet rise of the family CIO, a role whose responsibilities straddle managing wealth today and ensuring their successors can carry it forward.

The Family CIO’s scope

Any focus on the headline figures around the scale of assets changing hands across Australia misses an important point. Wealth transfer can be incremental, ongoing and success often hinges more on the readiness of the recipient than asset type or value.

Astute Family CIOs recognise this. Defining the purpose of wealth transfer is the first step, often across multi-generational horizons. They make intentional decisions about why assets are handed down, whether that’s to support family members’ lifestyle or educational expenses, maximising capital preservation, or leave a lasting charitable legacy.

They also account for the realities of modern family dynamics. Family structures, involvement in family businesses, and family members with specific needs all affect how wealth is shared. On top of that, Family CIOs are conscious of the changing social, economic and market settings that impact wealth and family decisions.

The ability to manage this multi-layered complexity is what defines the Family CIO’s role, and makes it so important to maintain as wealth changes hands. After all, the greatest risk to successful intergenerational wealth transfer doesn’t tend to be tax treatment or asset selection, but the problems that arise when wealth is transferred before capability.

Developing joint-stewardship

Every family is different, so pathways to developing skills and responsibility in younger generations can vary widely. Factors such as age, foundational knowledge and nature of assets involved all play a role.

What is common among Family CIOs is that conversations about education and knowledge transfer tend to happen well before any formal wealth transfer event. Rather than handing down assets or portfolios in full, many families seek ways to build responsibility and wealth stewardship progressively, allowing for an orderly transfer of capabilities.

Among Commonwealth Private clients, while some are most comfortable with a single, diversified core portfolio, we are seeing a trend towards more hands-on management and a modular approach to designing portfolios, now the approach the majority of our clients take.

While that tends to be led by Family CIOs, it also creates an opportunity to start smaller and build familiarity and responsibility among the next generation. It isn’t unusual for a Family CIO to first provide a family member with a modest portion of an overall allocation earmarked to be handed down. This allows them to better understand the investment universe, the support available to them and practice decision-making without taking on too much risk.

That allocation might be invested in a professionally managed, diversified core portfolio, or used to gain exposure to assets outside of more commonly understood listed equities and property, like alternatives. This can be facilitated through a portfolio of alternative assets, assistance to invest based on interest and risk appetites, or, for the more sophisticated, selecting an individual manager.

We see clients take multiple routes, so aligning capability with opportunity and providing appropriate insights and support when needed is important.

Capability-building over a lifetime

For many family members, investment literacy is limited or still developing. In these cases, capability-building might start with family conversations or with experts explaining the investment landscape and the behaviour and risk-reward profiles of public and private market assets.

Joining communities of like-minded people in similar circumstances can offer a safe and supportive environment to learn and share ideas. That may be for younger cohorts that prefer digital learning or for women seeking to connect with other women. Our own experience has shown us that group learning tends to outlast any information shared.

Even earlier, exercises might involve encouraging or supporting micro-investing in equities to make learning to invest a daily habit. A recurring contribution of a few dollars can leave a lasting impression about compounding value, which then becomes part of an emerging Family CIOs’ toolkit.

The capabilities of the Family CIO can be built over a lifetime, and while not linear, can step up from an investment perspective from literacy, to investing small, perhaps gravitating to ETFs, then gaining confidence and maturity to consider diversified portfolios and more modular asset exposures.

When it comes time to consider family dynamics and broader settings, the second and third layers of the Family CIO role, this grounding supports a deliberate and well-informed approach to protecting and growing what’s important for the generations that follow.

To learn more about how Commonwealth Private can help you with your private banking needs visit commbank.com.au/private

The article provides general information and has been prepared without taking into account any of your objectives, financial situation, or needs. You should consider whether the information in this article is appropriate for you before you act on the information. Eligibility criteria applies. Investment carries risk. No liability is accepted by Commonwealth Private, its related entities, agents and employees for any loss arising from reliance on its content. Commonwealth Private Limited ABN 30 125 238 039 AFSL 314018 (Commonwealth Private), a wholly owned non-guaranteed subsidiary of the Commonwealth Bank of Australia ABN 48123 123 124 AFSL and Australian credit licence 234945 (Commonwealth Bank). Private Bankers are representatives of Commonwealth Bank and Investment Directors are representatives of Commonwealth Private.