DBS Private Bank sees strong growth in family-office services
Variable Capital Companies framework launched by MAS and ACRA may also be suitable for single family offices seeking multi-family office solutions.
DBS Private Bank (PB) is recording a strong response to its family-office services as the pandemic drives greater awareness of the need for wealth structuring, tax planning and philanthropic outreach.
Since it was established last year, the number of these privately held, wealth-management companies for wealthy families which the unit has helped set up has more than doubled; assets under management (AUM) has grown by 40 per cent.
Lee Woon Shiu, DBS PB regional head of wealth planning, family office and insurance solutions, said the unit expects a compound annual growth of 20 per cent in family-office AUM over the next three to five years, and that the pace of growth would typically be more rapid at the start.
"But we're confident in what we've established, have a strong pipeline and are well-placed to maintain this growth trajectory.
"Despite our being a new entrant, we've been very well received by the market and by our stakeholders. We're seeing a lot of enquiries, not just from Singapore, but from esteemed advisers in the family-office space who reached out to us from the west ... to enquire about the single family-office landscape and the options available to them in Singapore."
The family offices that DBS PB has helped to establish have on average assets of around US$150 million.
Mr Lee said Singapore's response to Covid-19 has burnished its standing and reputation as a wealth-management hub.
"Through the pandemic, we've seen rising interest from the east and west. We saw families particularly pivoting to Singapore, which is seen as a safe pair of hands and a gateway to Asia's opportunities.
"Singapore's handling of the pandemic was seen to demonstrate qualities such as transparency and tenacity, and was viewed as a candid way of dealing with problems as they arise, instead of sweeping them under the carpet.
"Families, especially those of ultra-high net worth, appreciate the certainty and transparency."
Confidence in the rule of law and a business-friendly regime are other factors. Mr Lee said families were also surprised at the speed and commitment of the authorities to developing Singapore as a choice destination for family offices.
There are a number of tax incentives, for instance, which give tax holidays to specified income from certain designated investments.
Earlier this year, the Monetary Authority of Singapore and the Accounting and Corporate Regulatory Authority (ACRA) launched the Variable Capital Companies (VCC) framework, which may be suitable for single family offices seeking multi-family office solutions.
Wealthy families in Europe and the US are acutely aware that governments in the west may seek to raise wealth, inheritance and estate taxes as a means of funding the multi-billion dollar stimulus and measures that have been rolled out to support economies through the pandemic.
Globally, around US$15 trillion of wealth generated is expected to be transferred to the next generation in the next decade, with Asia accounting for US$2 trillion.
DBS PB will host a webinar for clients on Thursday, during which it will launch a publication produced jointly with the Economist Intelligence Unit: "The Family Office Boom - Contrast between East & West". Among other things, the study seeks to shed light on a number of issues, such as cultural differences between the east and west in family office structure and approach, and east-west distinctions in succession planning.
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