Thinking about setting up a single-family office? Here’s what to consider

Family finances

An SFO can help safeguard your family's wealth to be passed down to the next generation.


Globalization and a growing population of high-net-worth individuals (the global HNWI population expanded by 7.8 percent in 2021 ) are fuelling a rise of family offices.

According to global professional services network EY, there are at least 10,000  single-family offices around the world – most of which were set up in the past 15 years.

The purpose of a family office

A single-family office (SFO) oversees the administration and management of the financial and non-financial (for example, legacy preservation and giving back to the community) needs of a family. It may be a solution for managing the complexities of a single family’s wealth and centralizing control of their assets.

“In addition to investment management, a common reason for setting up an SFO may be borne out of a family’s desire to consolidate and professionalize its wealth,” says Alvin Chiam, a wealth planner at RBC Wealth Management in Asia.

Families who are considering an SFO may also think about big-picture plans outside of their immediate financial assets. Michelle Lau, a wealth planner at RBC Wealth Management in Asia, notes, “Families may be looking at issues such as succession planning and governance. Setting up a family office could support those objectives.”

Lau says one potential objective of an SFO is for the younger generation to use it as an opportunity to learn from the more experienced generation. For example, young family members could shadow their parents and grandparents in the day-to-day investment activities undertaken by the family office. By doing so, they may have the opportunity to be exposed to the decision-making process and also gain an understanding of the investment principles of the family.

Another important feature of an SFO is that it can help lay the foundation for continual education across generations, enabling members to better understand the family’s dynamics and business fundamentals. Encouraging regular and open communication in which everyone involved is aware and supportive of the SFO’s goals and objectives can put the group in a better position to work together as one unit, thereby minimizing conflict and inspiring family harmony.

Determining whether to set up a family office depends not only on a family’s net worth, but also on how complex their financial affairs are.

“Families with larger pools of assets which comprise of assets across various geographical locations and asset classes may want to manage that in a more consolidated manner,” Lau says.

Chiam adds that a corporate structure in an SFO may allow for greater accountability and support the delineation of responsibilities and level of involvement among family members and the team of experts running the SFO.

A simple starting point

A single-family office has to be tailored to the family’s preferences – and aligned with its objectives. The purpose of the office should be clearly defined, so that it can support the family’s objective – for example, to grow, protect and/or transfer their wealth.

Lau says the starting point could be as simple as having an SFO as an investment management vehicle. As time goes on, a family may realize that aside from using it as a vehicle to facilitate wealth enhancement and accumulation, they may also want to use the SFO for succession planning.

Key questions

Before setting up a single-family office, it’s important to have a deep understanding of your family’s dynamics, needs and aspirations. The following questions can help determine what’s needed in order for you to build a successful SFO.

  • What are your objectives – to protect and grow your wealth or to pass it on to the next generation?
  • What kind of assets would you like your SFO to manage? What is the size of these assets?
  • What kind of services do you need (e.g., investment management services, legal and/or tax advice)?
  • What types of asset-holding structures are there and what are the implications of each?

Wealth advisors can support a family through their SFO journey, from helping them assess their needs to facilitating multi-generational conversations,” Chiam says.

He explains that during an assessment, a family may realize that they require a trust or a liquidity solution, rather than an SFO.

Other than coordinating the logistics of setting up an SFO, an advisor may also be able to draw upon past experiences from guiding other families through the process, including coordinating the logistics of setting up an SFO, adds Lau.

Select the jurisdiction

Another pivotal decision is where to set up the family office. Singapore, for example, is becoming one of the top destinations for HNWIs to set up their SFOs. As of 2021, the country had about 700 family offices, up from 400 at the end of 2020, and up sevenfold from 2017, according to estimates from Singapore’s Economic Development Board  .

When selecting a location for an SFO, families may want to consider whether the host jurisdiction has the following:

  • Access to investment and advisory professionals
  • Robust infrastructure and strong global connectivity
  • Strong and respected rule of law
  • Stable economic and political environments
  • Safe jurisdiction with low crime rates
  • Tax neutrality for investment structure

“It is important to bear in mind that an SFO is something built to last for generations, so you’ll want a [jurisdiction] that has consistent stability to provide a base for wealth management,” Chiam says.

Before embarking on an SFO journey, think about whether it aligns with your family’s objectives. If you’re looking to safeguard your family’s wealth and create a lasting legacy for future generations, it could be the right choice.

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