Increasing concerns about risk, coupled with the desire for control, are driving demand amongst the ultra-rich to opt for single-family offices over multi-family offices, according to Julius Baer’s Singapore head of wealth planning Kevin Tay.

At an estimated $100 million or above, the ultra-rich can begin to consider if they would like to opt to establish a single-family office (SFO) or choose to be serviced by multi-family offices (MFO). 

Both have their own pros and cons. SFOs allow for greater control by individual families but at a much higher price tag. At the expense of some of this control, MFOs allow for greater cost efficiency and scalability. 

Not Just Economics

But considerations are increasingly not just limited to cost and return but also non-economic factors. This may include specific preferences related to investment approach, philanthropy, legacy planning or legal and compliance. From this perspective, MFOs tend to manage a limited number of families with common interests or backgrounds while also holding pre-existing long-term relationships.

«Currently, we are seeing more interest in single-family offices over multi-family offices,» said Julius Baer head wealth planning and family office services Singapore Kevin Tay in an interview with finews.asia.

Limited Talent Pool

Along with opportunities from the growing number of SFOs, there will also be challenges for the broader wealth management industry in Asia from «even greater competition for a limited talent pool».

This will especially be the case for the North Asia market with expectations of a continued strong interest in family offices as China and Hong Kong reopen their economies, according to Tay.

Rival Hub Singapore

Both Hong Kong and Singapore are expected to retain their positions as the preferred jurisdictions to set up family offices in Asia. In Hong Kong, the government recently introduced a series of supportive measures as part of plans to attract at least another 200 family offices to establish or expand operations in the city by the end of 2025. 

Rival hub Singapore is home to about 700 family offices, up from 400 in the end of 2020, with around 200 pending applicants for SFO tax incentives, according to the city-state’s government.