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The IFOA predicts that in the next 10-20 years there


will be more wealthy people in Asia than the rest of the world combined. As discussed earlier, we also know that as many more of the next generation have been educated outside of Asia, there will be a push to diversify away from their home bias risk, and a wish to globalise their investment interests. We are seeing this trend already by the huge foreign direct investment in 2011 by Chinese – in African infrastructure alone – estimated by the World Bank to be US$100 billion.


Sewing all the ‘new’ pieces together The new wealthy will want to maintain an active interest in their future affairs. As many have the education and ability to oversee their Family Wealth, we anticipate the growth of both the multi-family office model and single Family Offices will also grow rapidly. This trend is not hard to identify when the GFC of 2008 highlighted that banks globally cannot always be fully relied upon. As a result, a prudent person will seek a structure that provides flexibility, transparency, liquidity and global accurate risk management limits. Those with big money will make time to approach


the IFOA and learn about the private Family Office solution. They will want to learn about investing in global


asset allocation structures. They will want to preserve wealth for future generations and protect assets and confidentiality Further, the wealthy will see that the Family Office


model provides control, ownership and flexibility of investment choice as never before. No more relying on investment and private banks for investment advice when they can learn how to be as good at less cost and teach the children how to learn to be independent from overpaid – and sometimes incompetent – advisers. The Family Office structure provides a flexible global solution for the ultra wealthy group that has enough money to employ the best minds and have them dedicated to the interests of one family group rather than external, arms-length stakeholders of investment shops. In other words, a Family Office structure provides a unique alignment of interests for the UHNW. This innovative and time-tested concept provides the UHNW with unassailability and the peace of mind that is demanded in these volatile times.


Scott AJ MacDonald is executive chairman and co-founder of the IFOA scott@ifoa.com.au


FAMILY OFFICE: THE FUTURE 15


YOUR FAMILY OFFICE FUTURE


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