The existence of Family Offices in Europe has always stood second next to the United States. In more precise—yet blunt—words, Family Offices in the United States tower above those in Europe. With an 85% market penetration, and nearly 5,000 Multi-Family Offices (over double of those in Europe) in the United States, it is no secret to which country is dominating the global market with such evolved and effective business models. However, this is all on the brink of changing, as Europe is rapidly catching up to the U.S. in the race for Family Office implementation.
Global Custodian presented some interesting statistics when they gathered that “the European high net worth market represents nearly 27% of total wealth and has been growing at a consistent 8% rate in the last two to three years, versus a market average of 10-11%.” The latter alone tells a tale of Family Office growth in Europe. The climate for evolution of this master business model has been set, and economists and business giants are seeing a rapid expansion in Europe’s market.
Currently, there is somewhere around 28,500 ultra-high net worth individuals in Europe, collectively contributing about 3.3 trillion of the global market. With this gargantuan group of ultra-high net worth individuals in Europe—one that is largely expanding—a “perfect storm” is brewing for Family Offices. Single-Family Offices, private banks, global banks, and especially the Multi-Family Offices can serve these high-stake-holders with efficient and exclusive services—ranging anywhere from investment to asset protection. With the growth of wealthy individuals tremendously inclining in Europe, the annual growth of Family Offices will inevitably follow the inclination.
In Monaco, history has cherished Single Family Offices, but this, too, is beginning to change. The Carey Group reported that 85% of the Family Office sector is made up of Multi-Family Offices—and business giants in Monaco are beginning to deeply considers such methods. Gerard Cohen, a banking veteran is one of the individuals pushing for more MFOs in Monaco. He encourages Family Offices—especially Multi-Family Offices—by iterating the opportunity for economic growth and investment in Monaco.
“People need to realise that times are changing,” says Gerard Cohen, “and anyone in the finance sector needs to embrace this, not fight it. Family Offices are huge inhibitors for wealth and a more substantial economy; not just in Monaco, but globally.”
The fact that Family Offices are investing huge sums into technology to further the satisfaction for their wealthy clients coincides with Cohen’s statement, and in the next two years, it is possible that Europe will dominate the Family Office sector—and therefore, the global economy.
Photo: © Konstantin Yuganov / Adobe Stock