Last week, Agreus and KPMG Private Enterprise co-hosted the Family Office Forum – Unlocking Wealth, Legacy & Impact in Dubai. This event brought together in excess of 60 Family Office professionals from the UAE. The event also saw the launch of the UAE Findings of Agreus and KPMG's 2023 Global Family Office Compensation Benchmark Report.
The Family Office Compensation Benchmarking Survey: UAE Findings report analyses the role of Family Offices, compensation structures and highlights the UAE’s appeal as a Family Office hub. Drawing on these findings, we discussed all the critical considerations surrounding the benefits of establishing a Family Office, structuring and the importance of professionalising by recruiting, compensating and retaining key staff, with a focus on the UAE region.
Agreus’ co-founder Tayyab Mohamed sat on the panel alongside three other esteemed panellists, Greg Limb, the Global Head of Private Clients and Partner at KPMG UK, Alice Killingbeck, a Partner at KPMG UK and Joe Pacelli, the Head of Tax and Partner at KPMG Lower Gulf in the “Structuring your Family Office for long-term success” session. This session featured a comprehensive discussion of Family Office structuring and professionalisation. Family Offices are often sceptical of hiring external experts into the entity as the principals value trust and tend to hire people from their network. However, we have seen a shift in recent years, where more Family Offices are open to taking an institutional approach to managing the entity, even with a small team. This is particularly visible in the more mature markets such as the UK and USA.
The panellists also advised the audience on how to choose the right structure, governance processes and jurisdictions for a Family Office. Tayyab Mohamed and Alice Killingbeck both noted the importance of a Trust protector in a trust, as they can provide checks and balances on the wide-ranging powers of the trustee. Additionally, Family Offices must look out for the legal and tax requirements in their respective jurisdictions as they vary across the world, and some are more favourable. The speakers also suggested that Family Offices should have an integrated process when it comes to relocation and have a disaster strategy in place.
The KPMG tax experts specialising in the private wealth space advised the audience on how to take advantage of the global minimum taxation as a Family Office. This was an informative session that offered insights into the shift to global minimum tax, also known as the OECD Pillar 2. The speakers dissected the tax implications for different Family Office structures, with a focus on the impact on Trusts. Greg Limb pointed out the importance of acting upon the global implementation of OECD Pillar 2 in 2024, stating that this is an incredible opportunity for ultra-high-net-worth individuals and families.
The second half of the event featured another panel discussion that is moderated by Greg Limb, featuring esteemed speakers from the Family Office space. Vignesh Vijaykumar, the Director of Miras Family Office, Soumik Bandyopadhyay, the Director of Soumik Bandyopadhyay Advisors and Raajeev Batra, the Head of Private Enterprise and Partner at KPMG Lower Gulf joined forces to unveil the Family Office dynamics for wealth management, growth and legacy preservation to the audience. The speakers highlighted a number of trends in the Family Office space. It is believed that Family Offices are becoming more institutionally organised over the years and are focusing on generating a sustainable return. They also noted that there is a trend of Family Offices using philanthropy to enhance the participation of the next generation as well as the external reputation of the Family Office, especially in the UAE.
As an expert in Family Office recruitment, Tayyab Mohamed shared the key UAE findings of the 2023 Global Family Office Compensation Benchmarking Report with the audience. He highlighted the pain points and unique challenges faced by Family Offices, including the cost of operating a Family Office, dominating asset classes and compensation of Executive employees. He pointed out that Family Offices in the UAE are more keen on growth compared to their global counterparts. On top of that, as the Family Office industry in the UAE is still in the nascent stage, it has a higher average operation cost compared to other regions.
Our biggest takeaway from the event is the importance of professionalisation by implementing the right governance practices and planning ahead. All speakers advised Family Offices in the UAE to carefully assess their purpose, the needs of the family and their governance structures. The purpose of a Family Office is particularly important, as highlighted by one of the speakers, a well-structured Family Office will make a massive difference to the beneficiaries by properly protecting their legacy and looking after their affairs.
The full Family Office Compensation Benchmark Report 2023 can be accessed on our website. For a tailored conversation about how Agreus can help you hire talent in the UAE and Middle Eastern region, please do not hesitate to get in touch.
