Family offices in the US have emerged as the fastest growing wealth management segment in terms of assets under management, according to the findings of a Cerulli Associates study, due to be released next month.

For the past four years, assets in the top 80 family offices in the US have grown 15.9 per cent compounding annually, according to Robert Testa, Cerulli Associates analyst.
 
“There has been explosion of wealth in the upper tiers in the US,” says Mr Testa.

Family offices – a sub group of the Registered Investment Advisory segment – have emerged as the preferred structure for ultra high net worth individuals in US.

“When the ultra high net worth individuals are looking for truly independent advice, that’s when they’ll move towards the FO structure,” he said.

Based on the findings of the Cerulli research, discussed in advance of official release with WealthBriefing, there is estimated to be around 3,500 to 4,000 family offices nationwide.

According to Mr Testa, the average size of a US multi-family offices around $4 billion in assets under advisement, while single FOs on average advise on around $400 million of assets.

Mr Testa said the total size of the US family office market segment is difficult to define because these advisory structures are managing intergenerational family wealth, they don’t like to make their information public.

According to research by Schwab Institutional – a third party custodian that manages assets on behalf of family offices – the market segment could represent as much as $1 trillion of client assets in the US.

Total assets managed by fee-only advisory practices in the US are currently estimated to be around $2.4 trillion.
 
While Mr Testa poited out the 15.9 per cent CGAR doesn’t represent the growth of the overall FO market he said the figure is representative of the most prominent and high-profile firms in the industry.