Single family offices in Singapore balloon to 1,650 amid thriving wealth management sector

SINGAPORE - Singapore’s wealth management sector continues to flourish, with the number of single family offices (SFOs) set up by the super rich ballooning to 1,650 at the end of August, fuelling optimism that the growth of SFOs in 2024 will surpass that in 2023. 

From just 400 SFOs awarded tax incentives by the Monetary Authority of Singapore (MAS) in 2020, the number of family offices grew to 1,400 at the end of 2023. An SFO manages assets belonging to only one family. 

“In the first eight months this year, we added another 250 to reach 1,650 single family offices. Growth has continued to be robust, and we expect the number of new single family offices for 2024 to surpass the 300 that we added in 2023,” said Mr Chee Hong Tat, Minister for Transport and Second Minister for Finance.

Speaking at the Global-Asia Family Office Summit on Sept 16, Mr Chee, who is also the deputy chairman of MAS, said the Asia-Pacific region is expected to grow by 4.9 per cent in 2025, faster than any other part of the world. 

The Republic’s financial sector had a good showing in 2023, with a 10 per cent growth in assets under management (AUM) to $5.41 trillion as at Dec 31, 2023. 

Growth in AUM in 2023 was driven by an increase in valuation and net inflows across traditional and alternative assets, as well as in wealth management and other activities, Mr Chee said. 

Singapore’s wealth management AUM recorded a growth of more than 8 per cent in 2023. The five-year compounded annual growth rate of wealth management AUM came up to about 10 per cent, he added.

The rich choose Singapore for many reasons, including its strong rule of law, robust and predictable regulatory regime, an ecosystem of wealth managers and professional service providers, safe and family-friendly environment, as well as its world-class education and healthcare systems, the minister said.

He said MAS will continue to focus on providing a conducive environment for legitimate wealth and family offices.

“MAS has also streamlined the tax incentive application process to reduce the waiting time for family office funds. We will work together with our industry partners to improve our processes to make them simpler, better and faster,” Mr Chee said.

Several banks, such as the Bank of Singapore, UOB, Citi, HSBC and Nomura, plan to continue expanding their teams and offerings in Singapore, he added.

The family office ecosystem has added diversity to Singapore’s financial sector and contributed to its economy and society, in terms of good jobs and capital, as well as climate mitigation and adaptation causes, Mr Chee said.

But there is still room for them to grow and contribute, whether in philanthropy, investing as private equity or venture capital, or building talent and capabilities in the family office space, he added.

To develop a range of initiatives to support their philanthropy and impact journey, the MAS and the Institute of Banking and Finance launched the Philanthropy Advisory Technical Skills and Competencies in 2021.

A dedicated Centre for Sustainable Finance and Private Wealth was set up in 2022, founded by the University of Zurich, to equip finance professionals here with the knowledge to drive sustainable investment strategies for clients in Asia. More than 800 professionals have participated in training courses since its inception.

Singapore has introduced tax policies to encourage donations both locally and overseas. It

has been granting 250 per cent tax deductions

on donations to local institutions of a public character for more than a decade.

For overseas donations, it has seen growing interest from family offices in the Philanthropy Tax Incentive Scheme launched at the start of 2024 to provide qualifying donors with a 100 per cent tax deduction.

Mr Chee said Singapore is working to further develop the private markets. Four private market platforms, including ADDX and CapBridge, have been established in Singapore, he said, and “we are working to anchor more of such players here”.

To strengthen linkages between family offices and the local investment and innovation ecosystem, the Economic Development Board and MAS will continue to work closely with Enterprise Singapore and SGInnovate to set up several platforms to connect local companies to potential investors like family offices. 

To further develop skills and talent, the Wealth Management Institute will kick off two new flagship programmes – the Changemaker Impact Endeavour Fellowship Programme to support Asia’s philanthropists to bring about effective change and impact, and the Dalio Investment Principles Programme to build stronger portfolio management capabilities among family office principals and investment teams.