Singapore continues to solidify its position as a global hub for wealth management, attracting an increasing number of family offices from around the world. This article delves into the new faces of family offices in Singapore, highlighting the city-state’s evolving wealth management landscape and the innovative solutions being introduced.
Landscape
The Monetary Authority of Singapore (MAS) has seen a surge in family office applications, with more than 100 approvals in the first four months of 2022 alone. This trend is indicative of Singapore’s growing appeal as a wealth management destination, further reinforced by the expected net inbound migration of 2,800 high-net-worth individuals in 2022, marking an 87% increase from 2019.
High Net Worth Individual Influx
Prominent figures such as Google Co-Founder Sergey Brin, Indian business magnate Mukesh Ambani, and American hedge fund investor Ray Dalio have established family offices in Singapore, further bolstering the city-state’s reputation as a global wealth hub. These high-profile establishments underscore Singapore’s growing reputation as a global wealth hub and its ability to attract some of the world’s wealthiest and most influential individuals.
In a groundbreaking move, DBS Private Bank has launched the world’s first multi-family office (MFO) that leverages the variable capital company (VCC) structure to meet demand from ultra-high-net-worth individuals around the world looking to set up family offices in Singapore. The DBS Multi Family Office Foundry VCC operates as an umbrella VCC with underlying sub-funds, offering a unique and flexible solution for ultra-high-net-worth families to manage their wealth. This innovative offering is a testament to Singapore’s commitment to staying at the forefront of wealth management trends and providing cutting-edge solutions to meet the evolving needs of its high-net-worth residents.
Singapore Family Office Attractiveness
Singapore’s attractiveness as a destination for family offices is not coincidental. The city-state offers a stable political environment, robust public safety, a business-friendly climate, a tax-friendly system, and a stringent regulatory environment. Furthermore, Singapore’s strategic location and English-speaking environment make it an attractive choice for wealthy families worldwide. These factors, combined with the city-state’s commitment to innovation and adaptability, have made Singapore a preferred destination for family offices.
The Singapore Global Investor Program further enhances the city-state’s appeal by offering family office principals the opportunity to apply for Singapore permanent residency status. This policy, coupled with the city-state’s robust wealth management ecosystem, has contributed to a significant increase in the number of family offices. From 2017 to 2019, the number of family offices in Singapore increased fivefold, reaching 400 by the end of 2020. As of 2023, there are now 700 family offices in the country. This rapid growth is a testament to the effectiveness of Singapore’s policies and its appeal to high-net-worth individuals and families.
Wealth Influx
The influx of wealth into Singapore is not limited to a specific region. While a significant portion of the new wealth comes from Mainland China, Hong Kong, and India, wealthy families from Southeast Asian countries like Malaysia, Indonesia, and Thailand, as well as the United States, have also found Singapore attractive. This diversity of wealth sources reflects Singapore’s global appeal and its ability to cater to a wide range of wealth management needs.
According to data analytics firm Handshakes, family offices have seen robust interest in Singapore, with 182 opening already in 2023 following two years of strong growth. The offices that started operations from January to April 24 come on top of the 690 that opened in 2022 and the 672 in 2021. This steady growth underscores the sustained interest in Singapore as a wealth management hub and the city-state’sability to meet the evolving needs of high-net-worth families.
Talent Outsourcing
As the number of family offices in Singapore grows, so does the demand for talent in this sector. Despite the increasing demand, there is a shortage of skilled professionals in the family office sector. To address this gap, Singapore’s Wealth Management Institute has laid out training plans to increase family office talent and competency levels. By 2025, the institute aims to enroll 5,000 participants. This initiative is a testament to Singapore’s commitment to developing a robust talent pool to support its growing wealth management sector.
In addition to developing local talent, family offices in Singapore are also exploring outsourcing opportunities. Services such as bookkeeping, compliance, IT, and accounting can be performed by third parties, allowing family offices to focus more on their core competencies. This trend towards outsourcing is expected to continue as the family office sector in Singapore continues to grow. It reflects the sector’s adaptability and its commitment to efficiency and effectiveness.
More Programs to Attract Family Offices
Moreover, the introduction of the DBS Multi Family Office Foundry VCC is a significant development in Singapore’s wealth management landscape. This innovative solution offers ultra-high-net-worth families a flexible and efficient way to manage their wealth. By leveraging the VCC structure, these families can diversify their investment risks and maintain a level of privacy for their investments in a legalized manner. This offering is a testament to Singapore’s commitment to innovation and its ability to provide cutting-edge solutions to meet the evolving needs of its high-net-worth residents.
Conclusion
The face of family offices in Singapore is changing rapidly. With the influx of global wealth and the city-state’s conducive environment for wealth management, Singapore is poised to remain a leading hub for family offices in 2023 and beyond. As the sector continues to evolve, family offices in Singapore are likely to continue exploring innovative strategies, such as outsourcing and automation, to manage their operations effectively and efficiently. The introduction of innovative solutions like the DBS Multi Family Office Foundry VCC further underscores the city-state’s commitment to providing flexible and efficient wealth management solutions for ultra-high-net-worth families. As we move forward, we can expect to see even more innovative solutions and trends emerging in Singapore’s vibrant wealth management landscape.
