A Deloitte report forecasts assets under management increasing by almost three-quarters by the end of the 2020s. In pure numbers, Asia has already overtaken Europe. 

Some growth trends are more secular than others, and the family office space seems to be one of them, according to Deloitte, an international auditor and consultant.

The second report of its Family Office Insights series, released Wednesday, is a case in point. It said there are currently 8,030 single-family offices in the world today, up from 6,130 in 2019.

Customized Investments

Moreover, by 2030, it expects their numbers to top out at 10,720, with the level of assets under management for the sector rising by almost three-quarters (73 percent) from current levels.

Several trends are currently driving growth, among them the increased wealth concentration in the world, the successful transfer of generational wealth, receptive private equity and M&A markets – and the need for more customized investment strategies and services.

Cookie-Cutter Banks

finews.asia sees the last two as clear red flags for private banks and wealth managers the world over, given the move by their wealthiest client segment to set up shop may downgrade them into generic, cookie-cutter-type service providers.

Globally, Deloitte indicated there are currently 3,180 family offices in North America, 2,290 in Asia, 2,020 in Europe, 290 in the Middle East, 190 in South America, and 60 in Africa.

North America Leads While Asia Overtakes Europe

Growth in North America will continue to surpass all the other regions, as the number of family offices is expected to almost double to 4,190 by 2030 from 2,210 in 2019.

«However, Asia Pacific is gaining considerable steam and has surpassed Europe in terms of its number of family offices (2,290 versus 2,020 for Europe). It is expected to outpace North America in terms of its speed of growth between now and 2030,» Deloitte indicates.

Nearing Gender Parity

Another important trend the consultant indicated is that women now serve as principles in 15 percent of family offices internationally.

«The findings also reveal that, on a like-for-like basis, women are more likely than men to utilize a family office for their wealth management,» Deloitte indicated. 

Expanding Field of Operations 

Moreover, more than a quarter of all family offices have more than one branch with 12 percent of them planning on taking things a step further.

North America and Asia Pacific are currently considered the most attractive locations, with 34 percent of all family offices considering basing subsidiary operations there, which is also significantly higher than Europe, where only 24 percent of them are thinking of going.

The Millenium Inflection Point

Deloitte also came up with a remarkable statistic. About 68 percent of all family offices were created after the turn of the millennium, a fact that is sure to have 19th-century family office pioneer J.D. Rockefeller turning in his grave.

The total wealth managed by family offices is expected to rise to $9.5 trillion by 2030, implying an 189 percent gain since 2019, something that is also changing the fundamental face of wealth.

Rise of the Nouveau Riche

Most family offices, or 41 percent, now serve first-generation wealth, with 30 percent managing second-generation wealth and only 19 percent, traditionally the segment’s main bracket, the third-generation and beyond.

Currently, many of the offices remain embedded in family businesses, although it is expected that they will increasingly transition into being independent structures with expanded service offerings while adopting digital technology for operations and sustainable investment methods.

New Age Private Bank

«As the wealth management sector matures, the enablement for firms to scale-up in sophistication and reach creates further opportunities for growth,» said Adrian Batty, an enterprise leader at Deloitte Private Global.

Reading between the lines, it very much sounds like the family office is taking shape as the new private bank of our time.