Ultra wealthy seek a new kind of family office talent as they move to UAE

Family offices have needed to adopt more innovative business models to address the changing requirements of the UAE's affluent families

The UAE offers a tax-free environment, with no personal income tax, capital gains tax or inheritance tax. Getty Images

In 2024, we are witnessing a significant trend of the world's affluent individuals relocating and restructuring their financial assets. This year marks a period of global transformation characterised by political instability and widespread uncertainty, posing inherent risks when managing one's finances, especially when considering long-term planning.

The UAE established itself as the leading destination for high-net worth individuals globally in 2024, attracting more than 6700 millionaires, according to British investment migration consultancy Henley & Partners. This is creating a greater need for services capable of fulfilling their needs in the Gulf country, and at scale.

Geopolitical cocktail

Political uncertainty has increased around the world. In September, French President Emmanuel Macron announced his new government, weeks after a snap general election that resulted in a hung parliament. The new government in the UK plans to abolish its non-domicile tax regime from April 2025, sparking concerns about a potential mass departure of affluent people. Likewise, Donald Trump's return to the White House brings with it many unknowns.

Many established economic, social, and geopolitical certainties are fraying amid military conflicts, tech disruption from AI, and differing responses to climate change. It is little surprise that ultra-high net worth individuals (UHNWIs) are pausing to consider where best to find peace, stability, predictability, and a beneficial financial environment.

In tandem, succession planning is front of mind – requiring attention from wealthy families. The world is set for a massive wealth transfer over the next 25 years – as family heads bequeath around $100 trillion of assets to the next generation.

This cocktail of factors has made the UAE attractive as UHNWIs seek help with all sorts of things – including how to structure their assets; their need for diversification of risk; and where to (physically) live and for families to be educated.

Changing roles

Family Offices – specialist teams of consultants working to protect the wealth and interests of UHNWIs – have existed for decades. However, in recent times, many of these family offices have needed to adopt more innovative business models to address the changing requirements of affluent families who are increasingly seeking sophisticated wealth management solutions and investment strategies. Originally, family offices served single families with a close-knit approach to wealth management. Today’s family offices are evolving – catering to multiple families, with the model now accessible to a broader client range.

Family Offices are more open to external advice and professional investment, embracing sophisticated, diversified approaches to governance and operations. Outsourcing is a reliable, proven model and applying it to family offices – one of the world’s most exciting, fast-growing industries – makes sense.

A related, important trend is the emergence of Family Office as a Service (FOaaS), a subscription-based model providing comprehensive family office services. This provides access to a wide, deep skill set – above the level of human capital that an emerging market such as the UAE might previously have had.

While Dubai is addressing the talent gap for effective family office recruitment, the FOaaS one-stop shop reduces the need for multiple consultants. This saves time and money – eliminating task repetition and improving security – with sensitive data only needing to be shared once.

A Closer Look: UAE continues to be world's top millionaire magnet

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Here at Octagon, the most common enquiries from UHNWIs we see are for structuring, restructuring, relocation, asset dispersion, and relationships. Almost all clients – even the most conservative ones – want asset management simplicity.

But there is also growing demand for diversification. Clients are moving away from traditional strategies such as fixed income, which may no longer be as effective. Instead, they are exploring private deals, new markets and innovative ideas.

Modern UHNWIs are open-minded geographically. Opportunities in emerging markets, such as Vietnam and India, are diverse and promising, particularly in industries like copper that are gaining importance due to the shift towards clean energy.

For instance, by heeding our guidance, an Indian family office effectively executed a copper mining venture in the US, taking advantage of the increasing demand for copper in electric vehicles and renewable energy. This success story in India is just one of many examples showcasing how family offices are becoming increasingly attuned to global trends.

A third key area is physical relocation, particularly in the Mena region and the UAE. A major influx of private wealth is from the UK, Europe, Italy, China, and Russia. They see the UAE as a safe haven for their families and want advice on good education options.

Top international schools, such as Raffles School from Singapore and the North London Collegiate School, are now in the UAE. Prestigious universities, such as the American University, Sorbonne University and New York University have all established campuses here.

Relationship reassurance is vital too. While new jurisdictions can be welcoming environments for relocating families – navigational challenges still occur. Having advisers with established relationships reassures UHNWIs that even the most complex situations can be navigated smoothly.

Millionaire migration

Evidence of wealth’s migration to the UAE is not difficult to find. The UAE’s dynamic pro-investment community and location enables easy operations across many time zones.

Last year’s Brics Wealth Report by Henley & Partners, noted that Dubai hosts 15 billionaires, 212 centi-millionaires (net worth of investable assets of $100 million or more) and 72,273 millionaires. Further Henley data forecasts the UAE will attract 4,500 more millionaires by the year end.

Knight Frank’s Wealth Report 2024 noted THAT the UAE enjoyed a 18.1 per cent increase in UHNWIs, ahead of Saudi Arabia’s 10.4 per cent. And no wonder. A report by Knight Frank showed that while prime prices in Dubai have increased by 134 per cent since the beginning of the pandemic, they remain significantly lower than those in more established markets. In Dubai, $1 million can purchase 91 square metres of property, which is more than four times the equivalent in Hong Kong.

The UAE’s favourable tax policies and regulations – residency procedures and the reintroduced 90-day visit visa – reaffirm Dubai as a destination for UHNWIs managing risk and uncertainty. Other attractive public policy initiatives are permission for 100 per cent foreign ownership of non-strategic companies; and a 10-year golden visa scheme, bringing in skilled, diverse international talent.

Such transformative policies have helped family offices grow rapidly in the UAE – with total assets under management forecast to hit $500 billion by 2025.

Location and safety are influential. Straddling East and West, the UAE is an aviation and shipping hub. The enhanced Al Maktoum International Airport, worth Dh128 billion ($35.85 billion) is set to become the world’s largest airport. The UAE is also safe for wealthy individuals seeking a secure environment. Online database Numbeo ranks Abu Dhabi the world’s safest city – with Dubai, Ajman, and Ras Al Khaimah ranked fourth, fifth and sixth safest respectively.

Public policy, progressive regulation, thriving GDP growth, accessibility and safety shows the UAE is strategically creating the best environment for private, high-net-worth capital.

Dubai’s regulatory structure and geography are attractive for wealth creators. It has a business-friendly environment; state-of-the-art infrastructure; high-quality lifestyle, appealing regulations – such as the DIFC’s Family Wealth Centre and the Family Arrangements Regulations 2023 – are all tailored ideally to family offices.

Ekaterina Chernova is founder of Octagon, a UAE-based family office-as-a-service provider