Chee Hong Tat: Building a stronger tomorrow: family offices in our
flourishing wealth management landscape
Speech by Mr Chee Hong Tat, Minister for Transport and Second Minister for Finance,
and Deputy Chairman of the Monetary Authority of Singapore, at the Global-Asia Family
Office Summit, Singapore, 16 September 2024.
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CEO of the Wealth Management Institute, Ms Foo Mee Har
Distinguished Guests, Ladies and Gentlemen,
I am delighted to be here at the Global-Asia Family Office Summit. Earlier this year, I
joined the Monetary Authority of Singapore (MAS) as a board member, and I have
enjoyed meeting with management and professionals running our financial industry,
ranging from banks to asset managers, insurers and capital market entities. Today, I
look forward to speaking with the community of family offices in Singapore.
Continued growth in wealth management sector
The family office community in Singapore is a vibrant and growing space. From just 400
single family offices awarded MAS tax incentives as at 2020, it grew 3.5 times to 1,400
at the end of last year. In the first 8 months this year, we added another 250 to reach
1,650 single family offices. Growth has continued to be robust, and we expect the
number of new single family offices for 2024 to surpass the 300 that we added in 2023.
To those who have recently chosen to set up your family office here, a warm welcome
to Singapore. You have joined us at a good time - Asia's prospects ahead are bright
and the growth momentum remains strong. The Asia Pacific region is expected to grow
by 4.9% in 2025, faster than any other part of the world. And Singapore as a hub in
Asia will benefit from this positive development, growing together with our region.
As a strategic gateway to Asia, Singapore remains a trusted financial centre and
wellregarded destination for asset and wealth management. Growth in assets under
management, or AUM, last year was driven by increase in valuation and net inflows
across traditional and alternative assets, as well as in wealth management and many
other activities. The wealth management AUM recorded a growth of more than 8% in
2023, continuing the trend of growth in the past few years. And overall, the 5-year
compounded annual growth rate of wealth management AUM came up to about 10%.
Wealth owners choose Singapore for many reasons - our strong rule of law, robust and
predictable regulatory regime and a comprehensive ecosystem of wealth managers and
professional service providers are also some of the reasons. Equally important to
wealth owners who spend time here is our high quality of life, our safe and secure
environment which is family-friendly, and our excellent connectivity with the rest of the
world, as well as our world-class education and healthcare systems.
Local banks like the Bank of Singapore and UOB, as well as global private banks such
as Citi, HSBC and Nomura, have announced their plans to continue expanding their
teams and offerings in Singapore. A survey conducted by MAS with a group of leading
private banks in Singapore earlier this year found that client assets in the first quarter of
2024 grew by 9.5% compared to the same quarter one year ago. And this was echoed
by BCG's Global Wealth Report which projected that Singapore would grow by 8.5%
per annum between 2023 to 2028, faster than any other global wealth centres.
Singapore's high standards of regulation foster a reputable environment for genuine
investments and wealth management activities to flourish and bloom. And this is our
strength and our branding. We will continue to provide a trusted and stable
environment, giving investors assurance and confidence - in Chinese, what people
would say "" as a sense of assurance. We need to strike the right balance between
having robust regulation and growth, and continue to be the key to success of our
wealth management sector. We do not want to dilute our focus on providing this safe,
trusted environment, which will require robust regulations. But robust regulations and
proper safeguards can go hand in hand with an environment that is also
businessfriendly - and that is what we want to achieve.
I would like to reassure our industry stakeholders that Singapore will continue to
welcome legitimate wealth, genuine investments and complementary international
talent from around the world. And the more turbulent and disruptive the external
environment becomes, the more we must remain open, welcoming, stable and secure
to differentiate ourselves.
MAS will continue to focus on providing a conducive environment for wealth owners and
family offices. For example, in response to industry feedback, MAS recently provided
guidance to financial institutions on how they can implement risk-proportionate due
diligence checks on the source of wealth of their customers to avoid undue delays in
bank account opening timeliness. MAS has also streamlined the tax incentive
application process, to reduce the waiting time for family office funds. We will work
together with our industry partners to improve our processes to make them simpler,
better and faster.
Impact created for Singapore
The family office ecosystem has added diversity to our financial sector and created
value for Singapore's economy and society. I would like to acknowledge and express
my appreciation to the family office community for your contributions to Singapore.
Family offices have created good jobs in Singapore, both directly, when you hire
your investment professionals locally, and indirectly, when you engage the
services provided by our private banks, fund managers, as well as legal and tax
firms.
The patient capital that families bring, along with your business know-how and
networks, can greatly contribute to nurturing our local ventures and innovation
activities. Take for example, Treïs Group, whose S$20 million investments
spurred the growth of GetGo, the largest carsharing platform in Singapore, with
the mission to promote sustainable mobility.
Family-led enterprises have also been key contributors to climate mitigation and
adaptation causes. For example, the Olayan Group donated towards the Asia
Climate Solutions Design Grant launched by MAS in partnership with
Convergence. The grant defrays the cost of early-stage preparation and design of
innovative blended finance solutions. The grant has supported projects coming
from clean energy transition to nature-based solutions, catalysing a pipeline of
investible projects that would otherwise be under-capitalised.
Conducive and rich ecosystem of service offerings
There is further potential for family offices to grow and contribute. To achieve this, we
must strengthen the value proposition of our family office ecosystem, through three key
areas:
First, families' interest in philanthropy and doing good by giving back to help
others in society.
Second, families' interest in investing as private equity or venture capital.
And third, to build talent and capabilities in the family office space.
I'll touch on each one briefly.
Starting off with philanthropy. Many family offices are already keenly aware of the
important role they can play in contributing to the broader community and helping the
less fortunate. Indeed, we are seeing growing interest from family offices to become a
"force for good" - so not just to do well, but also to do good -and establish a legacy that
extends beyond financial gains and wealth accumulation.
For example,
The Ishk Tolaram Foundation supports education and skills training for dyslexic
pre-schoolers and autistic talent to pursue engineering careers.
The Tsao Foundation contributed significantly to eldercare solutions in the
community and brings together stakeholders to implement programmes and policy
research on effective ageing.
Yet many families are often faced with questions like how to give, and what
organisation to give to? Like a trekker looking upwards towards Mount Everest,
wondering how to take your first step that will pave your way to reach the summit. This
is why Singapore is developing a range of initiatives to support your philanthropy and
impact journey.
This includes mountain guides to support you on your climb. We have been
systematically deepening the pool of professionals in Singapore with expertise in
philanthropic advisory and impact capital.
In 2021, MAS and the Institute of Banking & Finance launched the
Philanthropy Advisory Technical Skills and Competencies to provide
guidance on the skills and competencies that professionals should possess
to support the philanthropic aspirations of high-net-worth individuals and
families. This served as a resource for training providers in the design of
relevant training curriculum.
We then set up a dedicated Centre for Sustainable Finance and Private
Wealth in 2022, founded by the University of Zurich, to equip finance
professionals in Singapore with the knowledge to drive sustainable
investment strategies for their clients in Asia. More than 800 professionals
have participated in training courses since its inception, acquiring valuable
skills in sustainable finance, impact investing and mobilising private capital
for sustainable development.
The Wealth Management Institute has also seen significant enrolments in
sustainable finance courses: in the last 2 years, it saw more than 2,000
enrolments into sustainable finance courses.
And earlier this year, the Asia Centre for Changemakers, hosted under the
WMI, launched the Certified Impact Philanthropy Professional, Asia's
firstever dedicated certification mapped to industry skillsets for philanthropy
advisors.
Now, besides mountain guides to help family offices who want to scale to the
summit, we also want to provide you with climbing mates who share your passion
and who can climb the mountain together with you. We are growing a community
with the "Impact Philanthropy Partnership" that is led by WMI and the Private
Banking Industry Group, where families can share on their philanthropic
experiences and build a network of like-minded peers. There is no need to climb
the summit on your own. You will have mountain guides to help you, and you will
have climbing mates to make your journey together.
And of course, you must also have good climbing gear and we are catalysing the
growth of tools and structures, such as Donor Advised Funds, and deal-share,
due diligence and impact monitoring platforms to make it easier to give by
handling the administrative work and research.
And finally, to provide a conducive climate for your climb. We have introduced tax
policies to encourage donations both locally and overseas. Singapore has been
granting 250% tax deductions on donations to local Institutions of Public
Character for more than a decade. For overseas donations, we have seen
growing interest from family offices in the Philanthropy Tax Incentive Scheme
launched at the start of this year to provide qualifying donors with a 100% tax
deduction.
Philanthropy is a long journey, but we believe that with skilled mountain guides,
likeminded companionship, good climbing gear, and a conducive climate, you will be
successful in your philanthropic ascent. And I hope that you will tap on these resources
and be a part of our journey as we develop Singapore into a global centre for
philanthropy.
Beyond philanthropy, we also want to give wealth owners the best opportunities in
preserving and growing your wealth. As I mentioned earlier, we need to do well so that
we can continue to do good. To achieve this, Singapore is home to more than 300
private equity and venture capital fund managers, many who are keen to partner family
offices like yourselves on co-investment opportunities.
MAS has been working closely with the industry to develop Singapore's private
markets over the last few years. We enhanced the operating environment for VC
investments through calibration of our regulatory framework for VC managers.
Singapore currently has four private market platforms that are established in
Singapore, such as ADDX and Capbridge, and we are working to anchor more of
such players here.
And to further strengthen linkages between family offices and the local investment
and innovation ecosystem, the Economic Development Board and MAS will
continue to work closely with Enterprise Singapore and SGInnovate, and we have
set up several platforms to connect local companies to potential investors like
family offices. This is another area which you can deploy your wealth, which is to
help grow the start-up ecosystem. And hopefully, you can also get good
investment returns.
Skills development for the industry
And finally, we believe that good talent is the bedrock of a successful family office
ecosystem. I am pleased that WMI is supporting the development and upskilling of
Singapore's family office-related workforce. With over 5,000 enrolments since 2020,
feedback of the programmes have been positive and have provided valuable
networking opportunities for learners with educators and other industry professionals.
Now importantly, WMI is not resting on its laurels. Earlier this morning, WMI announced
that they will be embarking on two new flagship programmes - the Changemaker
Impact Endeavour Fellowship Programme to support Asia's philanthropists bringing
about effective change and impact, and a new Dalio Investment Principles programme
to build stronger portfolio management capabilities among family offices principals and
investment teams. Two good new initiatives.
These programmes will complement WMI's existing suite of training programmes for
family office principals and professionals, and take our family office ecosystem to
greater heights. I want to thank Ms Foo Mee Har and her team at WMI for their good job
and for playing this important role to grow the wealth management sector from strength
to strength.
Conclusion
Ladies and gentlemen, let me conclude the speech by reiterating that Singapore will
continue to enhance our ecosystem of service offerings, underpinned by trust, strong
regulation and supportive government policies. This is a place that you can put your
money for investments for the long-term and be assured of the stability and trust here.
My colleagues and I are confident that the sector has much potential to grow further in
the years ahead, and we want to work together with all of you to contribute more
opportunities for Singapore and create more good jobs for Singaporeans. We also want
to help you, in the process of investing here and setting up your family office, to do well
and do good, to achieve the impact and legacy that you want for your families.
Thank you for being here today, and I hope that the Summit will bring you insightful
learnings, foster meaningful connections, and facilitate greater positive impact for
Singapore and the region. Thank you very much.