Family offices plan to increase their reliance on third-party providers, especially for liquid investments, concierge services and wealth planning, according to new research from the UK-based financial services firm Ocorian.
Over the next three years, 77% of surveyed family offices plan to increase outsourcing for liquid investments. The same percentage said they would increase outsourcing for extended family tasks such as concierge services, while 78% will devote more outsourcing to wealth planning.
"What’s clear from other segments of our research in tandem with our experience is that family offices are increasingly adopting institutional-level governance and investment strategies, with a strong focus on professionalization and diversification,” said Annerien Hurter, global head of private client at Ocorian.
The survey separated family office responses by plans to “dramatically increase” and “increase” outsourcing to specific areas. At 44%, illiquid investments received the most responses for dramatically increasing outsourcing over the next three years.
“By outsourcing complex areas like private equity to outsourced chief investment officers, they can maintain control over liquid assets while navigating the challenges of illiquidity,” Hurter said. “As these offices become more sophisticated, the trend is clearly moving toward outsourcing more investment functions to access top talent and ensure greater efficiency.”
Ocorian’s international study garnered responses from more than 300 family office investors who manage a combined $155 billion in assets.
The study also found that family offices plan to increase outsourcing over the next three years for services across personal financial management, passion assets, family homes, philanthropy and document repository.
“It's essential for advisers and service providers alike to deeply understand the unique risk appetite and governance needs of each family, ensuring transparency and trust in every decision,” Hurter said. “The key to success for third party providers will be being able to offer a seamless global service.”
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