Family offices or private investment vehicles are increasingly mushrooming around Singapore and Hong Kong as they scramble to cater to the wealth management needs of Asia’s ultra-rich.
The rich are favouring family offices as they get personalised attention and are able to have a bigger say in their wealth management, Reuters reports.
A relatively new concept in the region, there are an estimated less than 500 family offices in Asia compared to thousands in the West that offer a one-stop and personalised management solution for high-net worth individuals including investments, charitable giving, taxation and wealth transfers.
“This year the activity for setting up family offices is definitely more,” Lee Wong, Swiss private bank Lombard Odier Asia’s head of family services told Reuters. “The growth of family offices in Asia should continue on its current trajectory.”
Six private bankers on average estimated the number of new family offices in Asia had risen 15% in the first three quarters of this year over the year-ago period. This could pick up pace with a worldwide wealth transition of $3.4trn expected over the next two decades, as per the UBS/PwC report.
In fact, the number of family offices in Singapore quadrupled between 2015 and 2017, a spokesperson from the Monetary Authority of Singapore told Reuters. On its end, Hong Kong plans to introduce a new structure that will offer more flexibility and choices in setting up funds.
Private bank units of global firms are also cashing in on this development with Citi, Credit Suisse, HSBC and UBS reportedly beefing up teams who will focus on family office clients.
“Offshore Chinese wealth will continue to grow, so family offices business is going to be a multi-year trend,” said Ivan Wong, head of investment services and product solutions for Asia Pacific at HSBC Private Bank.
HSBC Asia private bank will add 700 people by 2022, and some of those new hires will focus on family office clients, he told Reuters.