Higher operating costs are a stone in the shoe – even for the rich eyeing family offices

[SINGAPORE] The compliance costs incurred when setting up single-family offices (SFOs) in Singapore are nudging the ultra-rich towards considering the more cost-effective alternatives offered by private banks.

Those that choose to go with these banks’ services are essentially getting the banks to manage their wealth. The payoff is that these ultra-high-net-worth individuals (UHNWIs) enjoy the tax perks of setting up SFOs without having to do so.

Observers say, however, that although having the option of another route is a positive thing for these ultra-rich families, the downsides are the possible lack of customisation that comes with having the financial and personal affairs of the one family managed by a dedicated private organisation. The potential conflicts of interest are another downside.