India Family Offices

Family Offices Gain Popularity with India's HNIs

The number of high net worth individuals (HNIs) has grown impressively leading to a similar rise in Multi-Family Offices. India had the second-highest increase in high net worth individuals in 2006 and 2008. India now has an estimated 84,000 families with net assets of at least $1 million (roughly Rs 5 crore). Family offices have emerged as a helpful way to manage that wealth.

What makes MFOs popular is that they earn money on the fee clients pay and ability to work with other financial services companies. This is absent in wealth management companies that earn income from selling in-house products.

“Ultra-rich families are increasingly thinking that product-driven wealth management companies do not serve purpose,” said Richa Karpe, director, investments at Altamount Capital Management, a multi-family office firm.

"Family office is at the top of the pyramid in wealth management space. It is for people who have liquid financial assets over Rs 50 crore,” said Rajesh Saluja, CEO, ASK Wealth Advisors. For any amount below that, the cost of managing the assets will shoot up. Most of the companies agree with this. Client Associate is the only exception that takes families on board with investible surplus of Rs 10 crore.

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