Asia's super rich prefer single-family offices to multi-family ones: Study

Wealthy families in region opt for such offices to have greater control over assets

- Angela Tan

Asia's super rich families prefer single-family offices for tighter control over their wealth, compared with their Western peers who are more open to multi-family offices that serve more than one family and offer services at a lower cost.

"The core difference is the professionalisation of the family office governance model, which is well established in the West," a McKinsey & Co study said, adding that family offices in Asia tend to have a heavier influence from the family on investment strategies.

Family offices can be either multi-family offices (MFOS), which manage assets of more than one family, or single-family offices (SFOS) that manage assets belonging to only one family.

Professionalised SFOs have inhouse chief investment officers and have higher than average assets under management. They follow a clear portfolio strategy, aiming for wealth preservation with conservative returns of 5 per cent to 6 per cent or growth-oriented strategies seeking higher returns of about 15 per cent.

Family offices have been slower to catch on in Asia than in Europe and North America, where wealth has been inherited for many generations, the study said.

About 5 per cent of the region's super rich, or individuals with more than US$50 million (S$65 million) in personal financial assets, have SFOs. In Europe and North America, the share is greater than 15 per cent.