Secrecy is inherent to the nature of Single Family Offices. Another hallmark is their economic power: Single Family Offices (SFO) manage vast fortunes. In the industry, they are often referred to as a sleeping giant.

Young Industry

This description fits quite well, as a study by the Swiss Institute of Banking and Finance at the University of St. Gallen (SBF-HSG) commissioned by the Swiss Single Family Office Association (SFOA) shows. It concludes that the net assets of SFO amount to 600 billion francs, including stakes in family-owned businesses. By comparison, external asset managers (EAM), including Multi-Family Offices, managed assets of around 500 billion Swiss francs.

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The study also shows that SFO are a young industry. Unlike SFOs abroad which often serve a family over many generations, most Family Offices in Switzerland primarily serve the first and second generations.

Many Single Family Offices are Backed by SME Companies

For the study, 220 SFO based in Switzerland were contacted, and 70 responded. The association estimates that there are between 250 and 300 SFOs in Switzerland, so the responses represent about 25 percent of the industry.

It is also noteworthy that 70 percent of the surveyed SFOs are backed by a family business, mostly SMEs. This underscores their significance as an economic factor. In 70 percent of Swiss SFO, the family is actively involved. «Single Family Offices are an essential part of the DNA of the entrepreneurial country Switzerland,» says Kurt Moosmann, President of the SFOA, in an interview with finews.ch.

Industry Calls for Self-Regulation

The study not only depicts the current situation but also identifies areas for action. For instance, a majority of respondents favor the introduction of a licensing regime based on self-regulation. These guidelines are designed to provide stronger protection for the industry against unscrupulous players.

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The SFOA wants to take the lead and present corresponding standards to the financial market supervisory authority (Finma). «We do this not for its own sake, but because we consider it important for the protection and strengthening of the Swiss financial center,» says Moosmann.

Since there are hardly any international standards of this kind, Switzerland could indeed take on a pioneering role in this area. The industry also talks about a gold standard. «In any case, such a regulation would enhance the attractiveness of Switzerland as a location,» says Felix Oeschger, board member of the SFOA against the backdrop of international competitors like Singapore or Dubai, which have gained significant ground in terms of Family Offices in recent years.

Strengthen Exchange with the Confederation and Cantons

In addition, the SFOA sees a need for political action to better protect capital more effectively. This includes human, financial, and social capital. The latter refers particularly to philanthropy. There needs to be increased exchange between the federal government and the cantons, says SFOA President Moosmann: «Many Single Family Offices are now set up in a hybrid manner, meaning they are no longer concentrated in just one financial center. They can move away just as quickly if the conditions are no longer favorable,» he warns.