Family wealth advisers get richer - right along with their clients

Family wealth advisers get richer - right along with their clients”

Family office wage bills climbed sharply over the last 12 months, with average remuneration packages for chief executives up 9.8% and for chief operating officers 10.1%, according to Campden Wealth and UBS.

'This increase in investment towards succession planning matches the sentiment expressed by family offices previous year, as their number one ranked priority was to focus on planning for the transition of the next generation of wealth holders, ' said the researchers.

"We see younger family members in APAC bringing in new values focused largely on social and environmental impact", said Anurag Mahesh head of global family offices in the APAC region at UBS Wealth Management. They notched 7% returns past year on average, up from just 0.3% in 2015. The gains were strongest among North American firms, which had less money invested in real estate than their worldwide counterparts.

When bonuses are included, North American family office chief executives earned $631, compared with $497 for their counterparts in Europe.

China's newly wealthy families have increased their overseas investments in European properties and technology stocks in the U.S., according to research by UBS and Campden.

Samuelson said family offices, which were pioneered by the Rockefeller's when John D established one for the family in 1882 in his effort to preserve its wealth for coming generations, made a huge rebound from their 0.3% average return in 2015 thanks to booming equity markets and successful private equity deals, noting long-term investors had made "slightly riskier bets and chosen to select more illiquid strategies that have delivered better returns and yields". Women appeared more frequently as chief operations officers and chief financial officers.

Returns have risen as rich families embraced risk by pushing cash towards public and private equity investments. Hedge fund allocations have fallen to an average of 7.1 per cent in 2017 from 8 per cent in 2016, despite improved performance. The UBS/Campden report is based on a survey of 262 families between February and May with an average wealth of US$921 million.

With a reading of 6.7 percent, APAC family offices in 2016 recorded the second-strongest performance compared to other regions with portfolios favoring private equity and equities. Sixty-eight per cent of respondents manage money for a single family.

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