FAMILY OFFICE & SUCCESSION PLANNING
Family Growth and Development The Middle East is witnessing a record emergence in family offices as the region evolves into an emerging global economic powerhouse, with trends and instruments changing as succeeding generations take grasp of the reins
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amily offices are a fast-growing segment of the GCC region’s wealth management industry. They are increasingly becoming the preferred instrument vehicle for ultrahigh-net-worth individuals (UHNWIs) and wealthy families due to the greater deal of control and flexibility that they provide as compared to traditional wealth management firms. “The growth of family offices in the Middle East is evidenced by an increase in the creation of formalised family office structures and governance activities where informal structures such as
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‘embedded family offices’ and ‘virtual family offices’ are evolving into more formal, staffed family office entities,” Shadi AlNasr, Principle, Senior Client Strategist, Global Family Office, BNY Mellon Wealth Management. Family offices go wherever wealth goes. HSBC said in emerging markets, especially Asia and the Middle East, the family office is a relatively new structure that is gaining traction among the first-generation founders of successful businesses. Events of the past three years – the economic impact of COVID-19, geopolitical tensions and a slowing global
Banking and Finance news in the MEA market
economy – have seen their emergence in GCC as the region transforms into a global economic powerhouse. The GCC, one of the world’s hotbeds of wealth creation, has seen an acceleration in trends relating to succession planning, alternate investment vehicles, wealth preservation, digitisation in wealth management and growing interest in sustainable investing. Enterprising families in the Gulf region understand the importance of succession planning and wealth transfer. According to Lombard Odier, HNWIs in the Middle East have a strong desire to leave a lasting legacy to the next generation and society more broadly. However, a survey of 300 established HNWIs in the Middle East revealed that almost 90% believe that their family business is set up for an efficient wealth transfer to the next generation whilst 24% have a full estate plan in place. As the UAE is gearing up to host the Middle East’s consecutive climate change conference (COP28) in November, wealthy families – and their family offices – are