Family offices are set to outsource more key services as pressure builds from clients for a wider range of support and more sophistication, new global research* from Ocorian, the specialist global provider of services to high net worth individuals and family offices, financial institutions, asset managers, corporates, shows.
More than nine out of 10 family office professionals predict a rise in outsourcing of key services over the next three years
Ocorian’s international study with more than 130 family office professionals responsible for around $62.425 billion assets under management found 91% say outsourcing will grow over the next three years with 28% predicting a dramatic increase over the period. Just 3% believe outsourcing to third parties will decrease.
HNW families and individuals want a wider range of services and risk appetite is growing
The key reason for increased outsourcing identified by the research from Ocorian, which works with more than 60 family offices around the world, is pressure from family office clients for more sophisticated services.
Around 83% of family office professionals predicting an increase in outsourcing say family offices want more specialised services. However, 57% say the rising risk appetite of family offices globally is also driving increased demand for outsourcing.
Regulatory pressures are driving family offices to turn to outsourced suppliers
Nearly two out of five (37%) believe regulatory pressures are driving family offices to turn to outsourced suppliers for support while around one in five (20%) say outsourcing is more cost-effective.
The research for Ocorian, which provides services to HNW individuals and family offices as well as financial institutions, corporates and asset managers, found family offices already make extensive use of support from third parties.
71% of family office professionals say outsourcing will enable them to improve overall service levels
Nearly two out of three (63%) say they use third parties for support on illiquid assets such as private equity while 60% turn to third parties for help with personal financial management for family members. Nearly half (48%) receive support with liquid investments. Around 71% of family office professionals questioned say outsourcing will enable them to improve overall service levels while 59% say it allows them to focus on their core strengths.
72% of family office professionals expect third parties to provide access to an increasingly globalised network of administrative centres
The study found family office professionals expect third-party outsourcing services to develop in response to growing demand from family offices. Nearly three out of four (72%) expect third parties to provide access to an increasingly globalised network of administrative centres while 60% expect them to offer a broader range of financial services.
Amy Collins, Head of Family Office at Ocorian, said: “Everything’s widening so much that many family offices simply can’t provide all the services that HNW families and individuals need so increasingly – as the research shows – they need support from third parties.
“We take on all the tedious work so that our family office clients can focus on their areas of expertise, for instance, family office professionals can focus on sourcing investments whilst we can deal with the administrative matters, which is reflected in the predictions of our survey that demand for outsourcing will increase.
“The family office sector is growing strongly as more family offices are established and increasingly more family members want to play an active role in managing their assets in the most efficient way. That applies particularly to younger family members who want access to a broader range of asset classes in addition to wanting to take more control.”
Ocorian’s award-winning dedicated family office team provides a seamless and holistic approach to the challenges and opportunities families face. Its service is built on long-term personal relationships that are founded on a deep understanding of what matters to family office clients. Its global presence means Ocorian can provide bespoke structures and services for international families no matter where they live.
* Ocorian commissioned independent research company PureProfile to interview 134 family office investment managers working for family offices which use third-party private client services providers to support in the preservation and protection of their clients’ wealth. The investment managers interviewed are responsible for assets under management of $62.45 billion and include 63 working for multi-family offices. The global study interviewed family offices in the US, UK, Canada, China, Germany, India, Norway, Saudi Arabia, Singapore, South Africa, Sweden Switzerland, UAE, Denmark, France and Japan.