Private banking through a multi-family office in Singapore

Bank selection, onboarding and ongoing support

The MFO’s role

A multi-family office can coordinate private-bank selection, account documentation and ongoing investment services for a family. The arrangement brings bank custody and lending together with the MFO’s wealth-management mandate. This guide sets out the responsibilities of each party and the documents required for onboarding.

Role of Multi-Family Offices (MFOs) in Facilitating Private Bank Accounts

What Are Multi-Family Offices (MFOs)?

• Definition: Multi-family offices are private wealth management entities that serve multiple families, offering comprehensive financial and non-financial services.
• Purpose: They consolidate resources to provide HNWIs with tailored solutions at a cost-efficient rate compared to setting up a single-family office (SFO).

How MFOs Assist with Opening Private Bank Accounts

Bank Selection

• MFOs assess a client’s financial goals and recommend suitable private banks by evaluating:
  • Minimum deposit requirements.
  • Specialized services, such as ESG investments or real estate advisory.
  • Geographic investment preferences and market access.

Relationship Management

• Leverage established networks to introduce clients to senior relationship managers at leading private banks.
• Coordinate the introduction and discuss service arrangements suited to the client’s requirements; the bank determines acceptance, terms and timing.

Documentation and Compliance Support

• Assist clients with preparing and submitting documentation, including:
  • Source of wealth verification (e.g., business ownership records, investment portfolios).
  • Tax compliance forms, such as FATCA and CRS certifications.
  • Enhanced due diligence (EDD) requirements for high-risk clients, such as politically exposed persons (PEPs).

Streamlined Onboarding Process

• Facilitate smoother account setup by:
  • Coordinating directly with the bank’s compliance teams.
  • Addressing potential documentation or verification issues proactively.
  • Reducing administrative burdens to save time.

Access to Premium Banking Packages

• Negotiate exclusive account packages, including:
  • Lower fees for wealth management and investment advisory services.
  • Priority access to private equity, hedge funds, and IPOs.
  • Customized lending solutions, such as Lombard loans or real estate financing.

Customized Investment Strategies

• Collaborate with private banks to align account features with client goals:
  • Asset allocation across equities, fixed income, and alternative investments.
  • Structuring cross-border investments for tax efficiency.

Ongoing Support and Monitoring

• Act as intermediaries between clients and banks, ensuring effective communication and service delivery.
• Monitor account performance and suggest optimizations or alternative providers when needed.

Negotiating banking terms

• Use the wider client relationship to negotiate banking fees and services. Terms remain subject to the bank’s assessment and the agreement for each account.

Eligibility Criteria

Financial Thresholds

• HNWIs: Minimum deposit or investable assets of USD 1 million to USD 5 million.
• UHNWIs: Minimum investable assets exceeding USD 30 million.

Documentation Requirements

• Personal identification (passport or government-issued ID).
• Proof of address (recent utility bill or bank statement).
• Source of wealth (business ownership records, investment portfolio, or income statements).

Compliance and Due Diligence

• Banks require Anti-Money Laundering (AML) and Counter-Terrorism Financing (CFT) compliance.
• Enhanced scrutiny applies to PEPs and clients from high-risk jurisdictions.

Steps to Open a Private Bank Account

Step 1: Bank Selection

• Choose a private bank that aligns with your goals, risk tolerance, and geographic focus.
• Leading banks in Singapore include:
  • Bank of Singapore.
  • DBS Private Bank.
  • HSBC Global Private Banking.

Step 2: Initial Consultation

• Meet with a relationship manager, facilitated by your MFO if applicable, to outline financial objectives and service requirements.

Step 3: Documentation Submission

• Provide all necessary documentation, including proof of wealth and compliance forms.
• MFOs can assist in verifying and compiling documents for accuracy.

Step 4: Compliance Review

• Banks conduct due diligence to verify wealth legitimacy and compliance.

Step 5: Funding the Account

• Deposit the minimum required assets to activate your account.

Step 6: Begin Private Banking Services

• Access tailored financial services, including investment advisory, tax planning, and exclusive investment opportunities.

Key Services Offered by Private Banks

• Wealth Management: Personalized portfolios aligned with your financial goals and risk tolerance.
• Lending and Financing: Real estate financing, Lombard loans, and bridge loans.
• Estate Planning: Structuring trusts and wills for intergenerational wealth transfer.
• Exclusive Investments: Access to private equity, venture capital, and IPOs.

Advantages of Multi-Family Offices for HNWIs

Comprehensive Financial Oversight

• Manage all aspects of a client’s financial life, from account opening to long-term wealth planning.

Cost Efficiency

• Shared resources reduce operational costs compared to single-family offices.

Cross-Border Expertise

• MFOs can coordinate the management of global assets and work with advisers on cross-border tax and regulatory requirements.

Investment advice and remuneration

• Assess the MFO’s independence through its ownership, fees, product relationships and management mandate.

Legacy and Philanthropy

• Provide frameworks for legacy planning and charitable giving to align with family values.

Benefits of Opening a Private Bank Account in Singapore

• Global Market Access: Proximity to Asia-Pacific’s high-growth markets and access to international investment products.
• Tax Efficiency: No capital gains tax and access to Singapore’s Double Taxation Avoidance Agreements (DTAs).
• Confidentiality: Strong banking secrecy and data protection laws ensure privacy.
• Tailored Services: Custom wealth solutions, exclusive investments, and estate planning tools.

Defining the banking mandate

The value of an MFO arrangement depends on the work it undertakes: selecting banks, coordinating documentation, negotiating terms and monitoring the relationship. Agree the service scope and fees before onboarding, including how the MFO and bank will communicate and who will make investment decisions.

FAQ: Private Bank Accounts in Singapore with MFOs

What is a Multi-Family Office (MFO)?

An MFO is a wealth management firm that serves multiple families, offering financial services like investment management, tax planning, and private banking assistance.

How can MFOs help open a private bank account in Singapore?

MFOs can shortlist banks, coordinate documentation and discuss account terms. Each bank conducts its own due diligence and decides whether to accept the relationship.

What are the eligibility requirements for private bank accounts?

• HNWIs: Minimum USD 1 million to USD 5 million in assets.
• UHNWIs: Minimum USD 30 million in assets.
  Required documents include ID, proof of address, wealth verification, and tax compliance forms.

What are the benefits of private banking in Singapore?

• Access to global investments and exclusive opportunities.
• Tax efficiency with no capital gains tax.
• Strong confidentiality and banking secrecy laws.

How long does it take to open a private bank account?

The process takes a few weeks, depending on the bank’s due diligence and compliance checks.

What investments are available through private banking?

Private banks offer equities, fixed income, real estate, private equity, hedge funds, and access to IPOs and tailored funds.

Why choose an MFO over direct private banking?

An MFO can coordinate investment advice, cross-border services and banking negotiations across a family’s accounts. Compare those services and their cost with the bank’s direct offering, and review how the MFO is remunerated.