Do You Need A Family Office? When, Why, And How To Set One Up

By Ian J Pryor & Aaron Vessels

There are three stages to your relationship with money. Stage one, you worry because you don’t have enough. Stage two, you stop worrying because you have more than enough. And stage three, you start to worry again because you have way too much. When your personal assets reach a certain level, you stop being a wealthy person and start being an institution. The time and effort required to manage the volume of assets becomes harder than earning them in the first place. If you are in the third stage, a family office might be the right option for you.

What is a family office?

All wealthy people have a relationship with a lawyer, an accountant, and a financial adviser who manage basic tax planning, portfolio management, the management of legal entities, and the occasional dispute. And this setup works fine – up to a point.

As your wealth grows the amount of time needed to manage these professionals grows proportionally. If you do business across multiple countries, it is your job ensure your accountant in Singapore is talking with your accountant in your home country. It is your job that overseas assets are properly reported in your home country’s tax return. It is up to you to ensure that your financial adviser and legal team and Trust terms are compliant in each relevant jurisdiction. None of these people will pay your phone or electric bills. None of these people will develop relationships with your children to implement a succession plan.

When your assets require the daily coordination of many professionals, centralizing operations becomes efficient. You might hire a full-time accountant to manage bill payments, staff salaries and other expenses. You then might hire an investment officer to oversee public and private portfolios. You then might hire a full-time lawyer to manage trusts and estate planning. Put them all under a CEO and congratulations — you have created a Single-Family Office.

Family offices offer complete control, discretion, and the flexibility to manage everything from investments and succession planning to household staff and even medical needs. Some large offices even employ family counselors. The average family office has 3–5 employees, but they scale up fast. Jeff Bezos’s family office employs over 150 people.

Singapore has seen explosive growth in the number of family offices in the past five years, making it one of Asia’s top wealth hubs. Over 300 family offices were set up 2023 alone according to the MAS¹, with the total number reaching 2000 by the end of 2024².

When It Make Sense to Set Up a Family Office

Generally, single-family offices begin to make sense when assets exceed $100 million. For $25–100 million, a multi-family office might be more efficient. For below $25 million, traditional wealth management or private banking may be preferred³

Certain triggers may push families toward creating a family office, namely large liquidity events like an IPO or business sales. If you are a tech founder that had an IPO, you suddenly have millions of dollars that used to be tied up in stock that now needs to be effectively managed. Others create one as they age and start thinking about succession. Most wealth never makes it past the third generation, but family offices can prevent that.

Lifestyle also plays a role. If you have multiple homes, a yacht, philanthropic efforts, or art collections, and if you employ household staff or have complex family dynamics, a family office can bring order to the chaos.

Pros and Cons of a Family Office

Alternatives

Private banks offer bundled services from access to private equity and hedge funds to tax and estate planning. It is less personal and tailored but can be more convenient, especially if assets are less than $25 million. Many fee-only financial advisers can also offer similar services with a personal touch—and without transaction-based fees.

Multi-family offices serve multiple families under one roof, giving you access to institutional-quality service without the cost of going solo. They offer many of the same benefits, but you give up control. You may have to share a chief investment officer or estate lawyers with other families. The office might have to manage competing interests of families or may offer proprietary products. Also, multi-family offices are often still more expensive than private banking or DIY strategies due to the additional advisory infrastructure and product layers.

If you’re not sure what structure makes sense for your family, reach out to us at IPP. We’ll help you understand your options and what set-up best fits your goals and scale. If you are still on your wealth creation journey and need tailored financial advice and someone to help you manage your money, again, reach out to us IPP to learn more.

The article above should not be taken as financial advice. Investments and their corresponding products have risks. Please seek advice from a financial adviser representative before making any investment decisions. In the event that you choose not to seek advice from a financial adviser representative, you should consider whether the investment or product in question is suitable for you.

EXPAT ADVISORY GROUP

Ian J Pryor

“This advertisement has not been reviewed by the Monetary Authority of Singapore”