Research among family offices managing a combined $119.37 billion found that a clear majority expect to use more outsourced expertise as demand for sophisticated services gains ground.
Family offices expect to increase their use of third-party
specialists for tasks such as managing illiquid investments and
cybersecurity over the next three years, according to
research from Ocorian,
a global provider of fund, corporate and fiduciary services.
Three-quarters of respondents (77 per cent) said their use of
outsourced support across “key services” would rise. Only 21 per
cent of them did not expect to see a change.
The study surveyed 200 family members and senior employees at
family offices across 16 countries and territories, including the
UK, the UAE, Singapore, Switzerland, and Hong Kong, collectively
managing $119.37 billion in wealth. It was carried out by
PureProfile in February.
The survey plays to a discussion that has taken place for
years in the family offices industry about the benefits and
costs of trying to carry out services in-house or farm them out
to specialist providers. The pressure to take the latter course
tends to rise among smaller family offices which may lack
the resources to perform such tasks cost-efficiently.
Illiquid investment advice is the most commonly outsourced
service, cited by 55 per cent of respondents. This
is followed by cyber security (49 per cent) and personal
finance advice (48 per cent). Extended family services, such as
concierge support and global insurance programmes, remain the
least outsourced, at just 3 per cent. However, 70 per
cent of respondents said they plan to increase use of such
services as needs evolve. A further 68 per cent expect to
increase outsourcing of wealth planning specifically, the survey
found.
Respondents cited demand for more sophisticated services (74 per
cent) as the primary driver of increased outsourcing, ahead of a
lack of in-house expertise as family offices grow (62 per cent)
and the cost-effectiveness of third-party providers (55 per
cent). When selecting specialists, the ability to operate across
multiple jurisdictions was the most important factor, cited by 62
per cent, followed by trusts (58 per cent), technology and
reporting capability (53 per cent), and costs (52 per cent).
Ocorian issued a report in 2023 making a
similar prediction about family offices” outsourcing
intentions.