Family offices see growth outside Bermuda
While the Government introduced a framework of solutions for family offices some six months ago, it appears there will be slow progress in attracting the speciality business of wealthy clients.
A family office is a privately held company that handles philanthropy, together with the investment and wealth management for the world’s richest families, with the goal being to effectively grow the significant investable assets and transfer wealth across generations.
But a recent study that surveyed family office professionals in Bermuda and 24 other countries did not place the island favourably.
Jason Hayward, the Minister of Economy and Labour, said in March that family offices have helped to shape enduring legacies of people such as Michael Jordan, Oprah Winfrey and Bill Gates.
Mr Hayward said: “Bermuda boasts an attractive framework for family offices that stands out against other jurisdictions. Our strong asset protection, tax efficiency, political stability and well-defined regulatory regime are just some of the ways in which Bermuda has set itself apart from its competitors.
“Our framework includes a unique mixture of a best-in-class financial services regulatory regime that facilitates access to investment opportunities in cutting-edge digital assets, emerging technologies and innovative insurance solutions. Government support further enhances the family office framework.”
But new 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 family offices are confident their wealth will continue to grow with Singapore, the Cayman Islands and Hong Kong.
They are believed to be the jurisdictions set to capitalise the most.
Novia Lu, commercial director, APAC, Ocorian said: “These survey results show that family offices are flourishing and they’re only predicting further growth in their wealth in the future – which is good news for all jurisdictions globally.”
Ocorian’s international study among more than 300 family office professionals collectively responsible for about $155 billion assets under management reveals almost seven in ten say the value of the assets held by their family office has increased during the past five years.
Of these, 9 per cent say the value has increased dramatically. Just under a third say the value has stayed the same and only 2 per cent say values have decreased.
Some 92 per cent of those who have seen asset values increase expect even more growth over the next five years with 48 per cent expecting dramatic increases.
The report said: “The research shows that Singapore, the Cayman Islands and Hong Kong are the top three jurisdictions which are most likely to benefit from this increasing wealth over the next three years.
“Nearly half (45 per cent) of family office professionals think Singapore will see the biggest growth in family offices and businesses using them for wealth planning or structuring their wealth over the next three years.
“This was followed by the Cayman Islands (41 per cent) and Hong Kong (32 per cent).
“The family office professionals surveyed said the top factor to consider when choosing a jurisdiction to structure wealth was the ability to manage costs, followed by cultural considerations and a transparent tax regime.
“This was followed by being fluent in the native language, having a better time zone, and political stability.
“The seventh to tenth ranked factors are international reputation, infrastructure and expertise, common law jurisdiction and how accessible the jurisdiction is for travel.”
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