July 31: Family offices are increasingly turning to specialist third parties for sophisticated, specialist services in order to overcome new challenges and expand internationally, global research* from Ocorian, the specialist global provider of services to high-net-worth individuals and family offices, financial institutions, asset managers and corporates, shows.
Ocorian’s study among family members and senior family office employees responsible for total wealth of $119.37 billion found that advice on illiquid investments (55%) and cyber security (49%) is currently most received from third parties, closely followed by advice on personal finances (48%).
At the other end of the spectrum, only 3% of family offices surveyed say they currently receive third-party support on extended family services, such as concierge needs, global insurance programmes and extended family financial support.
However, demand is set to rise, with over three quarters (77%) of respondents citing their use of third-party support for key services will increase across the board over the next three years, with just 21% saying it will stay the same as it is today. The main reason given is a desire for more sophisticated services (74%), followed by a lack of expertise in-house as family offices grow (62%) and the realisation that third parties are more cost-effective (55%).
More specifically, 70% said the plan to increase third party support for extended family services as their needs and requirements change and they are faced with new, emerging challenges. More than two-thirds (68%) said their use of outsourcing around wealth planning will increase in the next three years.
The study in 16 countries or territories including the UK, UAE, Singapore, Switzerland, Hong Kong, South Africa, Saudi Arabia, Mauritius and Bahrain found that when looking to appoint third party specialists, the most important factor cited by 62% of family offices is the capability to operate across multiple regions followed by the ability to establish a strong, trusted relationship (58%). This is followed by their technology and reporting proficiency (53%) and then cost (52%).
Lana So Wan Yuen, Head of Private Clients – Mauritius, at Ocorian said: “Family offices are facing new challenges as they grow and become increasingly international. That means they are looking for third-party specialist expertise which can not only support them with the skills they need but also operate across multiple jurisdictions. In addition to still needing support with core services, our research findings also point towards family offices increasingly looking for support with extended services as they grow, such as concierge needs and global insurance programmes.”
Rebecca Thrope, Global Head of Regulatory Consulting at Ocorian added: “Outsourcing to a third-party not only provides family offices access to specialist technical advice, but also can help reduce cost, increase efficiency and help manage risk. Choosing the right partner is critical, and the upfront due diligence and ongoing monitoring and oversight is equally important to ensure the benefits of outsourcing are realised.”
Ocorian’s award winning dedicated family office team provides a seamless and holistic approach to the challenges and opportunities families face. Its service is built on long-term personal relationships that are founded on a deep understanding of what matters to family office clients. Its global presence means Ocorian can provide bespoke structures and services for international families no matter where they live.
Key services include formation and administration of family offices, HR support services, support with lifestyle and luxury assets, family governance, resident and relocation services and specialist support with immigration, visas, payroll, marine and aircraft crew management and financial reporting.
