Single, Multi or …?
What kind of family office do you have? What kind would you like? Would you like fries with that? There’s regularly talk of family office trends and predictions, especially at this time of year, and the service models are regularly evolving.
Given family offices are entities that are (well, ought to be) built for the long term, it’s worth stepping back and looking at some macro trends. In the US, the family office market is mature yet still growing at a healthy rate. In Singapore, the number of family offices has grown nearly three-fold in the past three years, and in Australia half the family offices have been established in just the last ten years.
Such significant growth means the big picture of who is managing family wealth will look very different in five years to what it looked five years ago. The proliferation of family offices will take AUM away from large wealth firms and towards a multitude of family offices.
That means the market will be far more fragmented. This change poses a huge threat: a potential shortage in quality people to staff family offices. Families will either not have high quality staff (which may lead to poor decision making), need to develop generous compensation packages to retain staff, or seek economies of scale, probably by working with other families.
Also see Family Office Essentials on my web site.
Consider This: How does your family recruit and reward family office professionals? Has your family considered the key person risks associated with a single family office?
Further reading: https://www.asianinvestor.net/article/why-single-family-offices-are-transitioning-to-multi-family-models/492135, https://www.forbes.com/sites/paulwestall/2023/11/15/what-does-a-family-office-in-the-usa-look-like/?sh=6228c6342a19, https://www.linkedin.com/pulse/debunking-family-office-trend-landscape-why-focusing-issues-marshall/, https://www.forbes.com/sites/forbesfinancecouncil/2023/08/22/is-it-time-to-consider-a-multifamily-office/?sh=672aa6ce6f077, https://www.wealthprofessional.ca/news/industry-news/the-multi-family-office-structure-to-support-success/355383, https://www.ft.com/content/4e4f3a07-e2e8-43be-b024-9a24aed6069f, https://www.forbes.com/sites/francoisbotha/2020/06/28/how-to-identify-a-true-multi-family-office/?ss=leadership-strategy#301b1fcf4869, https://www.forbes.com/sites/whittiertrust/2020/04/01/why-high-net-worth-families-need-more-than-just-a-bookkeeper/#2678e1e65304, https://www.fa-mag.com/news/why-establish-a-virtual-multifamily-office-43191.html
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