If a family office is asked to manage a friend’s portfolio, review the regulatory position before accepting the mandate. A close personal relationship does not necessarily make the assets part of the same family’s wealth for the relevant framework.
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MAS’s wealth-management guidance distinguishes single-family offices managing one family’s assets from multi-family offices managing third-party assets. Do not assume the SFO’s existing arrangements cover a new outside client.
Describe the proposed activity precisely
Identify whose assets are involved, who owns the accounts and who will make investment decisions. Distinguish informal discussion, administration, advice and discretionary management. Their treatment requires assessment on the actual facts.
Record proposed remuneration and any other benefit. A promise not to charge a conventional management fee does not, on its own, answer every regulatory question.
Example: a friend wants the office to trade for them
A family principal asks the investment team to operate a friend’s account alongside family accounts. The office should not begin using trading access while waiting to review the arrangement. Establish the proposed authority, activities and legal framework before accepting responsibility.
Prepare the facts for regulatory advice
- Asset owners and relationship to the family.
- Account and fund structures.
- Activities the office would perform.
- Who has investment discretion and transaction authority.
- Fees, benefits and contractual responsibilities.
- Existing exemption, licence and tax-incentive arrangements.
Give advisers the actual proposal rather than asking only whether the business can keep calling itself an SFO. The label is not a substitute for examining activities and clients.
Review regulatory and tax matters separately
A licensing or exemption assessment is distinct from a fund’s tax-incentive assessment. Adding assets or changing the office’s business can affect more than one set of arrangements. Review each with the relevant advisers before treating the proposal as a simple operational expansion.
Do not assume an existing fund-tax award authorises regulated services for an outside person. Equally, a regulatory conclusion does not automatically extend an incentive to a new vehicle.
Keep access and funds separate while reviewing
Do not mix a friend’s assets with the family’s accounts or provide the team with unrestricted account access before the arrangement is assessed. Clarify who owns information, what instructions are authorised and how any funds would move.
If someone has already started providing services, preserve the facts and seek advice promptly. Do not rewrite the arrangement afterwards to make it appear that all assets were always family assets.
Choose a lawful operating route
The outcome may involve declining the request, referring it to a properly authorised provider or using another lawfully assessed structure. Document the decision and its basis. Do not promise that incorporation of an additional company automatically removes regulatory requirements.
Does friendship make the assets family assets?
Do not assume that. Apply the actual framework to the relationship and ownership facts.
Can we start managing the portfolio and regularise later?
Review the applicable requirements before commencing the proposed activity.
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For family-office administration, accounting or tax advisory support, email [email protected] or WhatsApp +65 8501 7133. Legal advisers from our associated law firms can assist with structuring, contracts and regulatory advice where needed. Any incentive or regulatory application remains subject to the applicable official requirements and assessment.