Top 5 risks multi-family offices must know

High net worth individuals (HNWI) have been on the rise globally, reaching 2.34 million in 2024. Asia saw a 5% growth last year and is expected to accelerate with an anticipated 8.7% increase in Asia’s HNWI population by 2028.¹ Singapore, with its quality of life, strong financial infrastructure, and business-friendly policies, has become a major recipient of these wealth inflows and financial assets.²

This presents an opportunity for Singapore-based multi-family offices (MFOs) to offer more comprehensive services – including (but not limited to) investment strategy, succession and estate planning, and tax optimisation. MFOs can help high-net-worth families build wealth while simultaneously managing risks.

Amidst heightened regulatory scrutiny, technological advances, evolving investment strategies, and looming tariff impacts, MFOs have their hands full seeking “alpha” while staying in tune with the unique dynamics within affluent families.³

In this increasingly complex risk environment, MFOs can leverage insurance solutions to mitigate the risks they face while managing their clients’ investments. Let’s look at the five significant risks MFOs face and the specific insurance products that can mitigate them.

1. Complying with evolving regulations

Singapore MFOs must adhere to a complex web of regulatory requirements spanning financial compliance, tax laws, data protection, and corporate governance, including emerging risks like cybersecurity and ESG.

For instance, Singapore requires MFOs to report on foreign accounts and comply with cross-border tax standards like the OECD’s Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA).

Non-compliance can lead to hefty fines, reputational damage, and legal trouble. In December 2023, The Monetary Authority of Singapore (MAS) fined Credit Suisse S$3.9 million for failing to detect misconduct by relationship managers at its Singapore branch.⁴ The misconduct involved inaccurate post-trade disclosures, resulting in clients being overcharged in 39 bond transactions.

MAS’s crackdown on non-compliance and business misconduct has resulted in massive penalties on financial institutions and investment firms like MFOs. MAS imposed a total of S$20.8 million in penalties for breaches of its regulations in 2022 until mid-2023.⁵ It imposed five penalties with a total worth of S$7.7 million in 2024.⁶

Coverage for compliance errors

To protect against the financial fallout of compliance failures, directors' and officers' liability insurance or professional indemnity insurance can help pay for regulatory investigation costs. For example, if a regulator finds gaps in an MFO’s know-your-client (KYC) requirements, these insurances can cover any investigation costs, settlement, defence costs and even civil fines.

2. Compromised cybersecurity

Singapore experienced 2,217,922 cyber instances between 2023 and 2024, a 33.5 per cent increase from the previous year.⁷ Despite MFOs' strict adherence to the Personal Data Protection Act (PDPA), which mandates safeguarding client data and ensuring privacy, they remain prime targets for cyberattacks due to the sensitive data they store, including financial portfolios, estate plans, and tax details.

Protect against cyber incidents-related losses

Cyber insurance is crucial for MFOs to shield against financial losses  from cyber incidents, including crisis management costs, legal fees,  forensic expenses, and insurable fines. Investing in comprehensive cyber insurance safeguards assets and maintains client trust in a growing digital world.

3. Requirements for ESG-oriented investments

Singapore investors are expected to allocate increasingly more of their portfolio to sustainable assets. Adoption of environmental, social, and governance (ESG) factors into MFO investment strategies “kills two birds with one stone”, so to speak: it helps them comply with new regulations while meeting a growing demand for sustainable investments.

On the compliance side, the Singapore government has also introduced initiatives to crack down on “greenwashing” or making misleading claims about the eco-friendliness of one’s products or services. For instance, the Competition and Consumer Commission of Singapore (CCCS) has developed guideline⁸ to address misleading environmental claims, while updated ESG fund transparency rules⁹ aim to prevent greenwashing in investment products.

Create a safety net for ESG-related challenges

To protect against ESG-related regulatory issues and greenwashing claims, MFOs can adopt professional indemnity insurance and directors’ and officers’ insurance. These insurances can cover any investigation costs, damages, settlement, defence and civil costs and provide MFOs stability in an evolving regulatory environment.

4. Litigation and legal liabilities

Disputes may arise over the management of clients’ financial assets. Additionally, expanding across multiple jurisdictions raises the risk of cross-border litigation, which can be costly and complex to navigate. Investment firms, their directors, officers or employees may face claims from investors or regulators arising from their MFO-services.

Safeguard against legal exposure

Director's and officers’ insurance and professional indemnity play a vital role in protecting against these risks. Such policies help MFOs navigate potential client litigation and shield against professional liability claims, ensuring financial security and peace of mind.

5. Direct financial losses

MFOs can also be vulnerable to direct financial losses arising from fraudulent or dishonest acts by employees or third parties. The financial blowback resulting from these incidents can significantly damage both the firm and its clients.

For instance, an ultra-high-net-worth Chinese businessman recently sued four former employees of his Singapore-based companies for allegedly embezzling S$74 million and transferring the funds into their accounts.¹⁰ He sought a court order to freeze assets and impose injunctions against the employees and their holding company.

Incidents such as this underscore the critical need for MFOs to set up strong internal controls and protective measures to detect and prevent fraud, misconduct, and social engineering designed to deceive individuals into divulging sensitive information and transferring financial assets.

Protect against criminal activity of employees or third persons

MFOs must guard against direct financial losses from fraud – a task that becomes increasingly challenging as their financial operations grow more complex. This involves conducting thorough employee background checks, strengthening cybersecurity controls, regular training for employees and adopting comprehensive insurance to mitigate risks.

Crime insurance, in particular, can provide a crucial safety net for MFOs to mitigate the financial losses of fraud-related incidents and social engineering, and reduce the reputational damage that inevitably follows.

Tailor insurance strategies for wealth preservation

These are exciting times for Singapore, as high-net-worth families explore their wealth-building opportunities and pass down assets from generation to generation.

This dynamic environment gives MFOs a unique chance to provide specialised solutions that safeguard and grow client wealth over the long term. By leveraging a combination of targeted insurance products, MFOs can effectively manage risk, optimise investment strategies, and preserve wealth for future generations.

Our Financial Lines experts offer strategic advice and tailored solutions to ensure MFOs receive the best possible protection. By adopting a strategic and comprehensive approach to risk management, MFOs can protect both their clients’ wealth and their business continuity.

¹ Knight Frank, The Wealth Report 2025 , 2025.
² Singapore Business Review, Singapore ranks top choice for high net worth individuals: report, 2025.
³ Investopedia, Alpha: Its Meaning in Investing, With Examples, 2024.
⁴ The Straits Times, Credit Suisse handed $3.9m civil penalty by MAS for relationship managers’ misconduct, 2023.
⁵ The Business Times, MAS reports S$20.8 million in penalties, 39 convictions from 2022 to mid-2023, 2023.
⁶ Family Wealth Report, Financial Regulators Turn Up Heat On Miscreants, 2025.
⁷ Security Brief Asia, Singapore reports record cyberattacks in Southeast Asia 2024, 2025.
⁸ Global Compliance News, Singapore: CCCS to develop guideline on potential greenwashing conduct, 2023.
⁹ Responsible Investor, Singapore updates anti-greenwash transparency guidelines for ESG funds, 2024.
¹⁰ The Straits Times, Chinese businessman alleges $74m theft by Singapore-based family office staff, 2025.