Nearly half (49%) of wealthy Indian families use family office services, according to a report from Edelweiss Financial Services and Campden Family Connect.
The firms surveyed 78 wealthy families in India with an average net worth of the $645m (£503m, €565m).
The report found: “The rapid expansion of ultra-high net worth individuals in India has led to a growing appetite for more efficient, effective and prosperous ways to invest money and manage assets.”
Of the respondents using family office services, 19% have established single family offices that are independent of the family business, while around 8% have established or are joining multi-family offices.
When asked why they do not use family office services, the remaining 51% said that they do not use wealth management services (32%); they take their wealth management advice from family or friends (18%), or they rely on external advisers.
Reasons for family offices
The core reasons for founding family office are to add a layer of professionalism to their family business and investment structures (53%), to help successfully transfer wealth between generations (44%) and to embark on co-investing opportunities (38%).
Also, the most common responsibility that families allocate to their family offices is to act as an investment management service (69%).
They also want the family office to support new family businesses (63%); and to provide tax and legal advice (57%).
The report added: “Fuelled by global trends and a desire to further professionalise a family’s practice, families of great wealth are starting to set up family offices as vehicles through which they can invest their wealth into different asset classes; such as equities, private equity, real estate, fixed income and hedge funds.”
Succession plans
The report also looked at the wealth transfer and found around 62% of families in India now have some form of succession plan in place.
However, only 19% of these are written and formally agreed. The remainder are either simply verbally agreed (14%) or informally written (29%).
Also, over half (56%) of those surveyed said the next generation of family members currently hold family office/wealth management roles, while a fifth (20%) sit on the board.
Roughly two-thirds (64%) said that they have a strong influence over the family business, while notable proportions also claimed that they have a strong influence over long-term investment decisions (57%) and the operations of the family office (43%).
Investing
Lastly, nearly every family represented within the research invests in India (99%).
Outside of this, 14% also invest in North America, 11% in Europe, 10% in Asia Pacific, 7% in the Middle East and 5% in Africa.
