المكاتب العائلية في الإمارات العربية المتحدة: التعقيدات والرقمنة والاتجاهات المتطورة التي تم استكشافها في مناقشة فكرية قيادية في Hubbis

Hubbis recently hosted an exclusive thought-leadership discussion at ZUMA in Dubai’s DIFC, co-hosted with Bryan Henning, SVP, Head of International at Eton Solutions. The event brought together senior management from Single and Multi-Family Offices, private client lawyers, tax advisers, and other professional service firms to explore the complexities of setting up and managing a family office. Henning, with over three decades of experience working with UHNW families across global financial hubs, shared his insights on the evolving role of family offices, particularly in the UAE.

Henning discussed key considerations when establishing a family office, addressing challenges such as tax complexities, governance structures, legal requirements, and the distinction between a family office and an investment office. The conversation also touched on the increasing role of digitalization, AI-driven efficiencies, and operational challenges specific to family offices in the UAE, Southeast Asia, India, and China. The session highlighted both common pitfalls and innovative solutions for optimizing family office operations in today’s fast-changing environment.

The Increasing Demand for Family Offices

In recent years, family offices have gained significant prominence as ultra-high-net-worth (UHNW) families seek more control over their wealth and investments. Dubai has emerged as a major hub for this growth, attracting families from around the world, particularly from the UAE, China, Southeast Asia, and India. During an exclusive thought-leadership discussion hosted by Hubbis at ZUMA in Dubai’s DIFC, Bryan Henning, SVP, Head of International at Eton Solutions, delved into the pressing challenges and considerations facing UHNW families as they establish and manage family offices.

Henning’s insights, drawn from his extensive experience working with private banks and family offices, provided invaluable guidance for attendees, which included senior management from Single and Multi-Family Offices, private client lawyers, and tax advisers. The conversation began by addressing the fundamental question: Why establish a family office?

Why Set Up a Family Office?

The primary driver behind setting up a family office, Henning noted, is the need for centralized control over a family’s wealth, investments, and governance. “Family offices provide the ability to tailor wealth management to the specific needs of the family, integrating aspects such as estate planning, tax structuring, and investment management,” Henning explained. This personalized approach allows for long-term planning, multi-generational wealth transfer, and protection from risks such as tax changes or regulatory shifts.

However, Henning was quick to caution that the decision to set up a family office should not be taken lightly. “While the benefits are clear, families need to understand the complexities and ongoing responsibilities involved in running a family office, from regulatory compliance to operational efficiency.”

Key Considerations and Challenges

Henning highlighted several key considerations for families looking to establish a family office, many of which were especially relevant to the audience in Dubai.

Tax Considerations

One of the most immediate challenges families face when establishing a family office is navigating the tax landscape. This is particularly complex in multi-jurisdictional scenarios, which are common in the UAE, given the international composition of its UHNW families. Henning pointed out that families often rely on legal and tax advisers to structure their offices in a tax-efficient manner, but he stressed that operationalizing this advice is another challenge altogether. “Families need to think beyond the tax advice they receive initially and focus on how they can implement and manage their structures in the long term,” he explained.

The importance of efficient tax reporting cannot be overstated, particularly for families with global assets. Eton Solutions has developed integrated tools that streamline tax reporting, ensuring families have a comprehensive view of their assets and liabilities across jurisdictions. "Our platform allows for accurate tracking of all types of assets and their related tax implications, which is essential in today's increasingly complex regulatory environment," Henning said.

The Division Between Family Office and Investment Office

Henning also addressed the crucial distinction between a family office and an investment office. While many families initially focus on wealth management and investments, a family office encompasses far more than just an investment strategy. It is also responsible for legal matters, estate planning, and even lifestyle management for family members.

“For many families, the confusion lies in the overlap between managing assets and managing broader family affairs,” Henning noted. “A well-structured family office should separate these roles clearly, ensuring that investment professionals focus solely on financial strategies while governance and operational matters are handled by a dedicated team.”

Trusts, Structures, and Governance

Henning emphasized the importance of choosing the right legal structures, such as trusts, for wealth preservation and asset protection. In jurisdictions like the UAE, where many families have assets spread across multiple countries, establishing trusts or similar structures is essential for efficient succession planning.

“Families often make the mistake of underestimating the complexity of governance,” Henning observed. He elaborated on the need for proper documentation, governance protocols, and clear lines of authority to avoid disputes between family members. “Governance is not just about legal structures; it’s about making sure the family’s wishes are carried out in a transparent and orderly fashion.”

Henning added that many families fail to keep up with the rapidly evolving regulatory and legal environment. Eton Solutions addresses this by providing real-time data aggregation and document management systems that help family offices stay compliant while reducing the risk of errors.

Managing Legal and Procedural Requirements

Keeping abreast of legal and procedural requirements is an ongoing challenge for family offices, particularly those managing assets across multiple jurisdictions. Henning pointed out that many family offices start with basic operational systems, such as spreadsheets, and soon find themselves overwhelmed as the complexities grow. “You can’t manage a sophisticated family office with basic tools,” he stated. “The sheer volume of documentation, transactions, and compliance requirements necessitates a robust, integrated platform.”

Eton Solutions offers a comprehensive ERP platform that consolidates all family office activities into one system. From trust accounting to tax reporting, the platform enables real-time tracking and provides a 360-degree view of the family’s wealth. This level of integration helps family offices avoid common pitfalls, such as compliance lapses or mismanagement of assets.

What Typically Goes Wrong?

Henning addressed some of the most common mistakes families make when setting up a family office. One major issue is underestimating the cost and complexity of running a family office.

“Families often assume that once they’ve set up the office, it will run itself. In reality, managing a family office requires ongoing attention to detail, significant resources, and a dedicated team,” he said.

Another common pitfall is inadequate governance. Without clear structures and processes, family offices can become mired in disputes or face operational inefficiencies. “Governance is not just a box to check. It’s an essential framework that ensures the family’s vision is executed effectively,” Henning emphasized.

Differences in Regional Expectations

The needs and expectations of family office clients vary significantly depending on their region of origin. Henning pointed out that families from the UAE, China, Southeast Asia, and India each have distinct approaches to wealth management, influenced by cultural, legal, and financial factors.

“In the UAE, for example, we see a strong focus on real estate investments and a desire for tax-efficient structures. In contrast, families in Southeast Asia might prioritize more complex trust structures to accommodate diverse asset classes,” Henning explained. Eton Solutions works closely with clients to tailor solutions that meet these regional differences, ensuring that each family’s unique needs are addressed.

The Role of AI in Family Office Operations

As family offices grapple with growing complexities, technology—particularly artificial intelligence (AI)—has emerged as a crucial tool for creating operational efficiencies. Henning described how Eton Solutions is leveraging AI to enhance its platform, providing advanced data analysis, automated document management, and even predictive analytics for investment strategies.

“Our goal is to reduce the administrative burden on family offices, allowing them to focus on high-value activities like strategic planning,” Henning explained. AI also plays a key role in risk management, identifying potential issues before they escalate and ensuring compliance with global regulations.

Adapting to a Complex Future

Henning closed the discussion by looking ahead to the future of family offices. He stressed that, while technology will continue to drive operational efficiencies, it cannot replace the human element. “Family offices still need expert advice from legal, tax, and financial professionals,” he said. “What technology does is enable these professionals to deliver their advice more efficiently, ensuring that family offices can operate smoothly in today’s fast-changing environment.”

Ultimately, Henning’s message was clear: family offices are becoming more essential as UHNW families seek greater control over their wealth, but the challenges are significant. Success lies in understanding the complexities, leveraging the right technology, and working with the right advisers to ensure long-term sustainability.