There is no doubt the world’s wealth continues to grow, even in the midst of the unprecedented events of the beginning of the 2020s. The number of billionaires rose by 38.9% in 2019, and Asia in particular became a magnet for wealth. A 7.9% growth in the regional high-net-worth (HNW) sector has undoubtedly caused a rise in family offices in Singapore as well.

With it grows the number of high-net-worth individuals (HNWI) and ultra high-net-worth individuals (UHNWI) looking to not just secure their considerable financial interests, but guarantee their legacy by ensuring the succession of wealth for the prosperity of their children and grandchildren.

This is of course no easy undertaking, and the combined expectations of managing both one’s assets, and the future of their descendants for generations to come requires a rethink of traditional wealth management models. 

Why the Family Office Has Become the Preferred Vehicle for the HNWI and UHNWI

It is in this context that we have seen the ascent of the family office as a superior vehicle for managing the wealth of HNWI and UHNWI, by incorporating every conceivable facet of financial management for multigenerational well-being. 

In the past, HNWI and UHNWI have had their wealth managers utilise holding companies and special purpose vehicles in an effort to diversify holdings, ring fence risks, and keep confidentiality at the forefront of operations. These vehicles, while quite effective, have been found to be unwieldy due to their multiple jurisdictions, and create a number of inefficiencies for management and operation.

A family office on the other hand, offers all of the benefits of holding companies and special purpose vehicles, but without the complications and inefficiencies, by among other things, being based in a single jurisdiction, in this case, Singapore.

A family office is not just a wealth management vehicle, it is a specialised and dedicated vehicle for managing both the wealth of the HNWI/UHNWI, and the intergenerational succession of wealth beyond that individual’s lifetime. 

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In essence, a family office is an end to end service for ensuring the legacy of a HNWI or UHNWI, by providing a dedicated staff to work on the following:

Wealth Management	Concierge Services	Planning & Budgeting	Tax & Legal Services
Wealth Succession	Property Management	Payroll and Human Resources	Family Governance
Investment Education for the Next Generations	Establishment and Operations of Private Foundations	Charitable Giving

While the staff of a family office will be dedicated to the aforementioned services, the HNWI and UHNWI will have ultimate control of its activities, according to their values and wishes for the future of their family.

Why Singapore Has Become the Face of Family Offices in Asia

There is no secret Asia has had its fair share of instability in the last year or so, however it is in that turmoil that Singapore has risen to show itself as the secure and stable beacon for the region. While Singapore’s Asian sibling Hong Kong continues to struggle, Singapore has remained as stable as ever, continuing to have its inherent benefits shine on the world stage.

For the very reasons Singapore retains its crown as the world’s freest economy, it is also the ideal location for a family office for a HNWI or UHNWI:

• Singapore has some of the world’s simplest and lowest tax systems in the world
• A renowned financial services industry
• Excellent transparency
• Stable governance
• World class infrastructure
• Ideal and secure geographic bridge to China
• Active intellectual property protection
• Strong rule of law
• Essentially free of corruption 
• Top-tier quality of life

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Your Considerations for a Family Office in Singapore

When you talk to a family office service provider, we would expect them to go over the following with you to ensure your family’s needs are met in their entirety:

• What is your top consideration for your family office? It might be discretion, simplification, or perhaps teaching your children and grandchildren how to manage their wealth. Whatever it is, allow your family’s values to influence what it is you ultimately want to achieve with your family office.
• Consider what assets you will be injecting into your family office. This will help create a clear picture for future utilisation of those assets, but also to set up the family office in an optimal fashion for legal and tax responsibilities.
• Does your appetite for risk align with that of your children? Will they be able to manage that same risk profile, or should you adjust for their needs as investors?
• What tax exemptions will your family office qualify for? Does the family office provider have in-house tax specialists, or do they outsource those services?
• What are your licencing responsibilities? Does the family office provider have adequate legal and regulatory counsel in-house, or do they outsource those services?
• Consider exactly what services you require from the long list a family office provides. Every service will add up in cost, so talk to your family office service provider to examine wisely. 

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How Rikvin can help in setting up a Singapore Family Office 

Despite its comparative simplicity, a family office can still ultimately be a complex vehicle with many intricacies depending on your discerning needs. A family office differs from traditional wealth management vehicles in that you will need a full complement of staff ranging from lawyers, to accountants, bankers and human resource specialists. 

If you have any questions at all about what a Singapore family office could look like for you and your family, please do contact us to see how we can secure the prosperity of your children, and their children after that.