Family offices to push growth of financial wealth in Singapore

There are now 800 family offices in the city, compared to only 100 five years ago.

The growing number of family offices in Singapore is pushing up the amount of financial wealth in the Lion City by 9% through 2027, according to a report by the Boston Consulting Group.

Financial wealth booked in Singapore is expected to rise by a compound annual growth rate (CAGR) of 9% through 2027, partly spurred by family offices.

There are now roughly 800 family offices in Singapore, growing over the past five years from only 100 previously. More are awaiting regulatory approval, BCG said. In its BCG Global Wealth Report 2023.

Hong Kong remains the Asian market with the highest assets under management (AUM) growth rate among top booking centers over the last five years, growing at a CAGR of 13%. However, BCG said that Singapore is shaping up to be a strong competition, especially with more investors perceiving the Lion City as a safe-haven gateway to the Asia Pacific region. 

Globally, the global financial wealth shrank 4% to $255t in BCG, declining for the first time in 15 years.

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“Drivers include spiking inflation, the resulting rise in interest rates, and poor equity market performance against the backdrop of geopolitical uncertainty sparked by the war in Ukraine,” BCG noted.

The decline is expected to be short lived, with a 5% rebound to $267t in 2023.

“The first downturn in the global financial wealth market since the 2008 crisis came after a 10% rise in value in 2021, which was one of the sharpest in over a decade,” said Michael Kahlich, a BCG managing director and partner, and coauthor of the report. 

“We expect that the improving macroeconomic outlook and rebound in stock markets will drive a return to growth in financial wealth as early as 2023, and our five-year compound annual growth rate forecast to 2027 remains a healthy 5.3%,” Kahlich added.