Asia-Pacific Family Offices Face Five Key Governance and Technology Challenges

Family offices combine investment, tax, succession and governance functions as first- and second-generation entrepreneurs across Asia-Pacific enter a peak period for wealth transfers. McKinsey estimated on September 9, 2024, that $5.8 trillion would change hands in the region between 2023 and 2030, with ultra-high-net-worth families accounting for about 60%. The number of single-family offices in Hong Kong and Singapore has risen to about 4,000 since 2020, intensifying the need for professionalization.

McKinsey interviews identified five major challenges: weak governance, operating costs and talent attrition, insufficiently tailored alternative investments, fragmented services and lagging technology. An HSBC Global Private Banking executive warned that attrition is more severe at family offices lacking professional management. At single-family offices with $15 million to $500 million in assets under management, personnel accounts for 45%–65% of operating expenses, while technology represents 3%–7% of total spending. Data integration and AI are becoming critical to their transformation.