Family offices are increasingly setting up physical offices in new jurisdictions as family members move abroad or live in different countries, with this trend set to rise over the next five years.

Research from Ocorian found that 78 per cent of family offices have opened more offices in different jurisdictions over the past five years.

The survey of more than 300 family office professionals showed that the majority expected the trend of having multiple citizenships to increase over the next five years.

Family members moving abroad or living in different countries was the primary reason for opening offices in new jurisdictions, cited by 79 per cent of respondents.

However, 57 per cent said more offices were needed as investment portfolios had diversified or become more sophisticated, while 41 per cent had expanded to new jurisdictions in response to risk posed by geopolitical issues.

Four in 10 (40 per cent) opened more offices for tax and regulatory issues, and 11 per cent said they had already opened offices in different jurisdictions due to a shortage of skills.

Ocorian noted that the trend of opening more offices in different jurisdictions because of family members moving abroad looked set to increase in the future.

When asked whether they had seen an increase in family members having different or multiple citizenships or residing in different countries over the past five years, almost nine in 10 (89 per cent) family office professionals said they had.

Of these, 86 per cent forecast this trend to increase over the next five years, with 9 per cent saying it would increase dramatically.

More than a third (36 per cent) of family office professionals surveyed said they currently have three physical offices, followed by 27 per cent who have more than five.

Around 15 per cent have four, 14 per cent have two, 5 per cent have five, and just 4 per cent have one physical office.

Access to professional services and related infrastructure was the top issue considered by family offices when deciding where to open a physical office, followed by access to talent and skilled professionals, economic and political stability, and regulatory framework and legal structures.

“There has been a significant increase in the numbers of physical offices opened by high-net-worth families in the last five years, and what our research shows is the market trend we see where clients are setting up their own family offices, wherever they happen to be, rather than using an existing family office,” commented Ocorian commercial director, private client, Michael Harman.

“People want to live internationally and also have their investment interests internationally based – there are evident upsides to diversifying in this way, not least in respect of managing risk.

“So, we’d expect this trend is only set to continue further in the next five years, and we expect to see more family offices setting up new physical offices in new jurisdictions, indeed our research suggests we can look to locations such as the Cayman Islands, Hong Kong, and Singapore for this growth.

“However, the strongholds still remain highly relevant – jurisdictions like the UK remain steadfastly used – even US individuals setting up family offices want access to such established regulatory and legislative environments as the UK offers, this is also the case for the crown dependencies; strongholds that also boast a deep and experienced talent pool.

“There is a lot to consider when deciding where to set up, but having access to the right professional services and infrastructure is essential.”

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