Rising complexity drives family offices toward external specialists

Six in 10 respondents use third-party providers for personal financial management advice.

Family offices are increasingly relying on third-party specialists for complex services as they face new challenges and expand their operations internationally, according to a global research by Ocorian.

The survey of family members and senior family office executives in Singapore found that third-party providers are most commonly used for personal financial management advice, cited by 60% of respondents, followed by cybersecurity support at 52%.

Other areas where family offices are turning to outside specialists include advice on liquid investments, illiquid investments, and passion assets, each cited by 44% of respondents.

However, none of the Singapore-based family offices surveyed currently use third-party providers for extended family services, such as concierge support, global insurance programmes, or financial assistance for wider family members.

That is expected to change, as 76% of respondents said their reliance on external providers for key services is likely to increase over the next three years, whilst 20% expect usage levels to remain unchanged.

The main drivers behind greater outsourcing are the need for more specialised services, cited by 68% of respondents, followed by cost considerations (63%), limited in-house expertise as family offices expand (53%), and a growing risk appetite of clients (53%).

Extended family services are expected to see the biggest rise in demand, with 80% of respondents saying they plan to increase their use of external providers in this area as family needs evolve and new challenges emerge.

Other areas expected to see greater reliance on third parties include passion assets (72%), wealth planning (68%), and illiquid investments (68%).

When selecting external specialists, the ability to build a trusted relationship was the most important consideration for Singapore family offices, cited by 72% of respondents.

This was followed by the ability to operate across multiple regions and cost, both at 60%.

The findings are based on responses from 25 participants in Singapore’s family office sector, including family members and full-time family office employees.