Globally, a boom in family offices is expected over the next 3–5 years. For example, the category “Chinese entrepreneurs” has grown to be the second-largest group of the world’s billionaires. However, in 2017, only 5% of the world’s family offices were located in Asia, but locations such as Singapore are gearing up to host an increasing number of family offices for Asia’s wealthy families.

Traditionally, the family office is known for helping the wealthy family with:


·         Tax planning

·         Investment strategy

·         Wealth management

·         Legal advice

·         Dealing with real estate

·         Succession planning

·         Strategy and anchoring of philanthropic initiatives

·         Service functions such as housekeeping, travel planning, etc.

However, the demands and expectations of the modern family office are evolving rapidly as the world is seeing more and more new, younger billionaires.


The World’s Billionaires are Making New Demands

2020 saw the highest number of global billionaires ever. Despite the pandemic, their wealth increased by 27%. It is now up to family offices to keep up with the demands of the new wealthy families to manage their growing wealth. Harbour has compiled a list of seven of the biggest challenges facing the local and global family office in 2021 and beyond.


1. Succession Planning

It is an evergreen among family offices. Always on the agenda, rarely finalised. According to a 2020 report by UBS, one-third of family offices have no succession plan.


2. Competence Development of Family Members to Become Responsible Wealth Managers

Another family office classic but one that is often difficult to get to grips with. Here, the UBS report shows that European family offices are lagging behind Asia and the US when it comes to preparing the next generation to become skilled wealth managers.


3. Implementation of Risk Assessment and Action Plans

If there was one thing we learnt from 2020, it was the need to always be prepared. Family offices will also more often deal with more global families, whereby the risk assessment should be more nuanced and take into account threat scenarios outside Denmark.


4. Branding the Family Name

Who are we? What do we represent? How do we want to be remembered? Younger wealthy families in particular have a strong desire to stand out by focusing on personal branding. The family office will face new demands to manage the family’s narrative in order to create an identity and sense of belonging for future generations.


5. The Sustainable and Socially Responsible Family

Does the family office know enough about the SDGs and impact investing? Sustainable investment fulfils both the desire for a return – as opposed to pure philanthropy – and the desire to make a difference and contribute to positive societal development. Moreover, a focus on impact investing is also a way in which the family office can contribute to building intergenerational family unity and act in synergy with family values.


6. The Prince Charles Effect

We are living longer and as such generational handovers are happening later and later. Meanwhile, the second or third generation is ready to take the baton well into old age. Often, it is up to the family office to keep motivation high, ensure continuous competence development, and initiate the negotiations for an exit/entry date.


7. Managing the Dynamics of the Modern Family

Who is the “real” family in the modern family structure, which often consists of stepchildren, half-siblings, cohabitants, bonus parents, and rainbow families? Here, the family constitution is the best tool for the family officer trying to keep track of the relationships and each family member’s expectations and requirements for involvement.


Please contact us to learn more about setting up a family office or about competence development in family offices.