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FAMILY OFFICE TRENDS


The evolving family office


The financial elite are a discerning and demanding population that force change and innovation from the companies and people around them. As a result, family offices exist in an environment of continual improvement and transformation that is often a leading indicator for the rest of the financial services industry.


From SFO to MFO More and more, single family offices (SFOs) are becoming structurally opportunistic – if changing the way they operate can deliver concrete benefits to the family, they’re likely to take action. This will often take the form of an SFO expanding beyond their own family to work with one or more other wealthy families, in effect transforming from an SFO to a multi-family office (MFO). SFOs may merge with another SFO or join an established MFO in order to be more profitable, access a broader range of services or increase the chance of achieving their wealth management goals. About two fifths of SFOs are exploring making one of these types of changes.


Turnarounds and liftoffs Many people are taking stock of their finances in the aftermath of the GFC. But often the results are lacking. Ambitious sorts are committing themselves to recouping their losses or super-charging their earning power to catapult themselves to the next level – and looking for assistance from their MFOs. This expertise


Advisory firms from 2004 to 2008 Year


Sample size


2004 2005 2006 2007 2008


206 198 216 179 244


usually comes in the form of an action plan with precise, mutually agreed upon, measurable outcomes, complemented with business consulting, administrative support, advanced planning strategies and private investment banking.


Average client assets ($m)


$22.6 $19.8 $35.4 $31.7 $16.9


38 FAMILY OFFICE: ASIA TOMORROW


% want to become MFOs


48.1 51.5 65.3 68.2 71.3


Creation versus preservation In years past, family offices have been categorized as either an SFO or an MFO or by domicile. Increasingly, private wealth is derived from businesses that cross international borders and, as a result, the principal location of a family office is frequently less relevant than other aspects of how the endeavor is structured and managed. A third way of analyzing family offices is by looking at an office’s attitude and approach toward wealth management. Today’s family offices are focused either on the creation or the preservation of wealth, with the former outnumbering the latter by about three to two. This segmentation provides an important perspective that helps families clarify their primary goals and structure their SFO or, in the case of an MFO, match them with the capabilities of an organization.


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