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The family office continues to grow and increases in popularity.  The number of wealthy families increases as family enterprises develop and diversifies into mature investments.  At present, the family offices take on formal governance structures, realigning organizational format, implementing various risk management programs which includes more fixed controls and verifying policies on systems and technology.  It remains ardently competitive as it continuously evolves such that single family offices, more often than not, turn into a formal wealth management institution.  Family offices are formulating long-term objectives to establish a strategy wherein the business pushes further into a common direction within the developing market.

There are many internal and external factors involving the changes.  There is the development on processes, policies and procedures as the family office adopts a more formal and structured administration.  As such it is the family’s vision to have a strong foundation in bringing about focus on the strategy and goals. It should be able to manage the complexities of family relationships while defining the specific roles and responsibilities of the different family members.

The creation of family offices is a global trend.  It will continue to increase as there is also a rise in the number of ultra high net worth individuals and families.  These families can surely benefit from the use of a family office.  Plus, it is a fact that billionaires are integral part in the demographics in the family office market since they mostly control the wealth and investments.

In the coming years, there will be a large number of wealth transfers which will enable the continuous growth of affluent families.  It is anticipated that the family office concept will also explore and develop in new markets, such as Asia as part of the long term projection across the region.

Even with the expansion or creation of a family office, it could not be denied that various family offices are having difficulties in terms of elder family office principals.  The challenge is manifested on the transfer of wealth to the future generation as they seek for opportunities, exit strategies and provide a succession plan to build the family legacy.  The single family office may consider an opportunity to merge or consolidate with other single family offices (SFOs) and ponder how to sustain the family office and consider an approach with minimal cost in handling the wealth management affairs of the family.

The popularity of family offices also draws out interest on financial institutions in order to gain access with the wealthy families.  Banking on the concept of a “family office”, some financial institutions branded themselves as one, even though their services are limited and mostly focused on handling investment management.  A number of professionals such as accountants, lawyers and other wealth managers are rather interested in providing services and reaping the benefits like of a family office.  Despite the lack of services offered, they manage to call themselves as such which now leads to confusion in the industry.  Apparently, there is no standard definition of a family office.  It can be observed that even global investment firms employing a number of employees, identify themselves as a family office.

A family office has become an interesting market niche to some professionals.  It is also brought about by the evolving financial situation such that professionals are no longer attracted in joining private banking firms since job security is not as definite as compared in the past. Professionals with experience on private banking background are more inclined in joining a family office.  Other financial advisors are also intrigued and even strive to provide external services to family offices.

Family offices also aim to have industry standards in order to gauge their pool of talents.  Families would want to measure if the staff members have the required set of skills and credentials in performing the functions in the family office.  Aside from the credentials, it is also important to participate in training programs in relation to the professional’s job functions.  However, there appears to be no specific or available training associated with the family office.

Another area to look into the family office is the emergence of cross-country agreement.  It has been brought up in the past and has not been realized until recently.  Children of family office principals were able to marry other nationals or have managed to invest overseas and were mainly aggressive to form partnerships or alliances with other families.  A number of family offices also established small offices in other locations which are located in a foreign country. Creating small offices enables sharing of investment strategies, helpful insights and excellent performance of a professional.

The situation for the family office identified all leads to the continued rising and development of family offices.  As a result, there will be a constant demand of talents and skills relative to putting up a family office.  Having no common training ground for family office professionals, there is an opportunity for educators or skills providers in filling the gap by coming up with standards or certifications in developing a program for training future professionals in the field.  The demand for a wider and diversified coverage for the family office is also anticipated and with the rising costs, families will also seek venues to minimize or share costs with other family offices.