Family offices interviewed are based in the UK, Switzerland, Mauritius, South Africa, India, Hong Kong, Singapore, Taiwan, UAE, Saudi Arabia, Bahrain, US, Jersey, Guernsey, Bermuda and Cayman.
New global research from Ocorian, the specialist global provider of services for asset managers and owners, including private client, fund administration, capital markets, corporate, and regulatory solutions, shows family offices are becoming increasingly professionalised on governance, structuring and investment portfolio management .
The study among family members and senior family office employees responsible for total wealth of $119.37 billion found almost half (47%) say it’s now an investment committee which is the ultimate decision maker when it comes to major investments or structuring. Just 6% say it’s still the founding family member.
Nearly two fifths (39%) say the ultimate decision maker is a member of the next generation while 6% say it’s external advisers and 3% say it’s a family council or board.
All of the family offices surveyed agree that their set up has become more professional over the past year and they have made a number of changes to achieve this.
For more than half (54%) that is developing a more diverse and professionally managed investment portfolio while 51% have secured the support of more third-party professionals. Just under half (46%) say they have strengthened their compliance, tax and legal infrastructure and the same number have developed a stronger succession plan.
Other moves to professionalisation include developing a more cohesive and robust philanthropy programme (42%) and strengthening the management team that runs the family office (41%).
All respondents say they have a formal governance structure of some sort. Over two thirds (65%) of family offices surveyed have an investment committee with independent members, and 60% have a next generation advisory board. Over half (56%) have a formal risk committee and a similar number (54%) say they have external independent trustees or a board. Around a third (35%) have a family council and just under a fifth (18%) have a family constitution or charter.
However, family offices are still facing a number of challenges particularly when it comes to regulation. Only 8% of those surveyed say that they are very well advised and well equipped to meet the current global regulatory demands they face. Around three quarters (74%) say they are in quite a strong position to meet these, and 18% say their ability to meet these current regulatory challenges is average.
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