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Family Office Market size was valued at USD 17.94 billion in 2023 and is expected to reach USD 40.18 billion by 2036, registering around 6.4% CAGR during the forecast period i.e., between 2024-2036. In the year 2024, the industry size of family office is assessed at USD 18.86 billion.
The global family office market is thriving on the back of the rising need amongst families or individuals to outsource their entire financial management. Family offices are a means of investment management for affluent families. Family offices provide their clients with a wide range of services including tax planning, budgeting, insurance, among others besides investment. The most important aspect of every family office is the handling of private wealth along with privacy and the highest possible level of confidentiality. The family office often is and should be, the only entity that keeps all the information for all family members, covering the entire portfolio of assets and general personal information.
Growth Indicators
Increasing Wealth of High-Net-Worth Individuals (HNWI)
Growing investment in fashion, technology, real estate and financing has drastically increased the wealth of high-net worth individuals across the world during the past three decades. During the era of Dot Com Boom, many giant organizations grew their assets multiple fold, therefore creating opportunities for other companies across the world. Additionally, the significant growth of billionaires was led by the high returns gained across almost all major asset classes, despite a loss of momentum in the global economy and turbulent geopolitical environment. Moreover, despite the trade wars, slowing global growth and the volatile stock market, the total number of millionaires in the world increased significantly.
Numerous Benefits Associated With Family Office
The family office plays an important role in asset management of HNWI. It further helps the HNWI with succession planning within the business to expand in different regions worldwide. Wealthy families are setting up family offices with a growing interest in sustainability and impact investing. Most family offices are established as a result of the management of succession and transfer of wealth from one generation to another. Moreover, family offices also provide greater confidentiality & privacy and higher returns, and further ensures that there is good governance and better alignment of interest. It further addresses a wide range of complexity of the financial services demanded by the HNWIs. Such factors are anticipated to drive the growth of the global family office market.
Challenges
High Cost of Operation
One of the major challenges faced by family offices is to control the cost of operations, which includes staffing costs, operational cost of running IT systems and the overhead administrative costs. The challenges observed in structuring the family office to maximize cost-effectiveness and expense deductibility is causing great concerns amongst the family office members, which is anticipated to restrain the family office market growth during the forecast period.
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
6.4% |
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Base Year Market Size (2023) |
USD 17.94 billion |
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Forecast Year Market Size (2036) |
USD 40.18 billion |
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Regional Scope |
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The global family office market has been segmented on the basis of type into single family office and multi-family office. Single family office registered the largest market share along with a value of USD 13.39 billion in the year 2019 and is projected to reach revenue share of 49.52% by the end of 2036 by growing at a CAGR of 4.50% during the forecast period. The increasing need for wealth management, backed by the growing number of billionaires is significantly driving the single-family office segment. With several new organizations and companies being launched every day, there is a significant rise in the growth of the single-family offices, which in turn is driving the growth of the segment. Single-family offices either have occasionally adjusted term sheets or standard protection requirements while making investments. The majority of single-family offices provide family services such as accounting, and tax management followed by succession planning.
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By Family Type |
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Office Type |
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Managed Net Worth |
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The global family office market is segmented by regions into North America, Latin America, Europe, Asia Pacific, Middle East and Africa. North America industry is anticipated to account for largest revenue share of 44% by 2036. Presence of numerous ultra-high-net-worth individuals who are increasingly establishing family offices in order to have greater control over their investments, along with the fact that the financial services for HNIs are not fulfilled by wealth management firms and private banks, are some of the factors raising the demand for establishing family offices in the region, which in turn is anticipated to drive the family office market growth in North America.
In July 2020, BNY Mellon and Deutche Bank collaborated to develop a new API-enabled foreign exchange solution to improve confirmation times for restricted emerging-market currency trades.
In June 2019, UBS AG and Sumitomo Mitsui Trust Holdings, Inc. announced that they have partnered together to launch a strategic wealth management venture in Japan.
Author Credits: Parul Atri
Copyright © 2024 Research Nester. All Rights Reserved
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