The rise of the Multi-Family Office

The Multi-Family Office (MFO) is designed to be the ultimate platform for serving ultra-high net worth individuals (UHNWIs). You need liquid assets totalling more than US$30 million. The MFO is a concept that began in the States, but it’s something we’re going to hear a great deal more of in the years to come.

The Rise of the MFO

A true “360 service”, an MFO both facilitates and manages the financial, social and familial aspects of the super-rich. Crucially, the setup is designed to perpetuate and protect a client’s lifestyle by becoming an integral and indispensable service. It also ensures that wealth is reinvested wisely to preserve it for future generations.

Tax, legal, investment, payroll, admin, land management, education and travel all fall under the remit of a Multi-Family Office. The relationship between client and MFO is a deeply involved one. It’s a level of service that can only be offered if there is complete trust between both parties. MFO’s are truly client aligned, offering objective financial advice from an assortment of suppliers.

It’s a niche service accessible to only a tiny few. Yet this market is quietly growing at an astonishing rate against the backdrop of a global downturn. It’s so specialised that mainstream banks can’t offer it with any real credibility. With an MFO, the client has access to more integrated services than offered collectively elsewhere and has more direct influence over financial affairs.

MFO’s are set to boom for the simple reason that the world’s UHNWIs are growing. Unsurprisingly, one of the most prominent emerging markets is Russia where wealth has been created due to new economic freedoms, increased domestic consumption and political stability.

Forbes recently reported that there are currently more UHNWIs based in Moscow than in any other city and there are 101 billionaires within Russia.

Asia toppled Europe’s millionaire figure for the first time in 2010 with 3.3 million US$ millionaires. Singapore will become the world’s top wealth management centre by 2013 according to PricewaterhouseCoopers LLP. Furthermore, China’s economy has been projected to surpass America’s as the biggest in the world by 2030.

Asia’s rapid growth has created a new generation of affluent families but also huge potential for more UHNWIs in the near future. These affluent families need to be schooled in the preservation and succession of wealth and so it is little wonder that Asian countries have quickly embraced the MFO concept.

MFO’s will do great business in the coming years, providing the quality and integrity of their service is in place. New players in the market should be aware that this is a highly specialised area and a tough one to enter. It requires the right affiliations plus a real understanding of a relatively unknown demographic and their native socio-cultural nuances.

MFO’s are set to boom for the simple reason that the world’s UHNWIs are growing. Unsurprisingly, one of the most prominent emerging markets is Russia where wealth has been created due to new economic freedoms, increased domestic consumption and political stability.

Forbes recently reported that there are currently more UHNWIs based in Moscow than in any other city and there are 101 billionaires within Russia.

Asia toppled Europe’s millionaire figure for the first time in 2010 with 3.3 million US$ millionaires. Singapore will become the world’s top wealth management centre by 2013 according to PricewaterhouseCoopers LLP. Furthermore, China’s economy has been projected to surpass America’s as the biggest in the world by 2030.

Asia’s rapid growth has created a new generation of affluent families but also huge potential for more UHNWIs in the near future. These affluent families need to be schooled in the preservation and succession of wealth and so it is little wonder that Asian countries have quickly embraced the MFO concept.

MFO’s will do great business in the coming years, providing the quality and integrity of their service is in place. New players in the market should be aware that this is a highly specialised area and a tough one to enter. It requires the right affiliations plus a real understanding of a relatively unknown demographic and their native socio-cultural nuances.

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