Wealthy Families Increasingly Question Where in the World to Keep Their Assets

Ultra-rich families have often run their wealth from a single-family office located where their business exists, or their money was made, and where most members of their family live. But the dynamics for many of these families has radically changed as their businesses, homes, and children spread across the world, according to a report from Citi Private Bank.

Dealing with multiple jurisdictions creates possibilities but also complexities and raises a question for families of where the bulk of their assets should reside, as the bank details in the report, titled Asset Location and Global Mobility. Citi, through its global family office group, works with 1,800 family offices with an average net worth of US$2 billion, says Hannes Hofmann, head of the group.

“A lot more families are now saying, ‘how do you professionalize the decision where these assets are sitting?’” Hofmann says.

Citi’s family office clients are very global. In a survey published last week, 71% of the bank’s clients reported that they were international in some way. Of that group, 53% said they have assets in multiple countries; 44% cited having family members in several countries; and 19% said they have family who are considering a move to another country or changing their citizenship.

Potential changes to tax regulations affecting the wealthy resulting from elections in the U.K. and France in Europe, and several countries in Latin America, could spark further globalisation of the world’s wealthiest families, the survey said.

In selecting a location for a family office, Citi recommends considering four criteria: the stability of the country’s financial, economic, and political systems; its financial and legal infrastructure; access to talent and cost considerations; and convenience, “including where family members live, work, and play,” the report said.

“We’re telling everyone: As you think about your asset strategy, you want safety that there’s a rule of law and there’s also a financial system that will protect your assets if things go wrong,” Hofmann says. “We might assume this is something that you get everywhere in the world, but the truth is you don’t.”

Strong financial and legal infrastructure also ensures families can find informed advisors and that regulations are secure, supporting, for instance, the movement of assets across jurisdictions.

The purpose of Citi’s report is to show how the four criteria are interlinked, Hofmann says. It may make sense to place a family office in a major wealth centre such as the U.S., Switzerland, or Singapore, but assets can also be kept in jurisdictions such as Jersey in the Channel Islands, or Luxembourg, Monaco, and Dubai.

The report details key factors in each of these places. Monaco, for instance, is less than a square mile in size but “has for centuries attracted the wealthiest families in the world given its favorable tax system, robust, if limited economy, safety, advanced medical facilities, and agreeable Mediterranean climate,” Citi said.

The Bahamas, meanwhile, is a politically and economically stable country just off of Florida’s east coast, making it convenient to the U.S., Canada, and Central and South America.

The U.S., meanwhile, accounts for 32% of global liquid investable wealth, and attracts ultra wealthy individuals with its “almost unrivalled breadth of education, lifestyle, business, innovation, and investing opportunities.”

“People need to think about these places and where they want to have their assets, where they want to base their residency, and then of course, what potentially their exit strategies and contingency plans are,” Hofmann says. The latter is important for a world facing rising instability and conflict.

For those who don’t have a plan in place yet, the report offers several locations where golden visas and residency programs offer a path to a backup location, such as Spain, Malta, St. Kitts and Nevis, and New Zealand. Most of these are countries where the wealthy already have connections through education or business interests, the report said.

Some of these jurisdictions don’t have tax regimes or their tax regulations don’t apply for short stays. As a result, people are choosing to become “tax nomads”—dividing their time between countries so they don’t spend long enough in one place to be taxed.

“There are some very wealthy people [who] we work with and some very wealthy families who’ve taken this global location topic to an art form,” Hofmann says.

“A lot of people want to be in L.A. or Miami or New York and London, so you can spend a third of the year in the U.K. and the U.S. and then the remainder of the year you spend in other places and you’re not a tax resident anywhere for tax purposes,” he says.

This strategy is “completely legal,” Hofmann adds. “This is not tax avoidance, it’s just tax management.”

There has rarely, if ever, been so much tech talent available in the job market. Yet many tech companies say good help is hard to find.

What gives?

U.S. colleges more than doubled the number of computer-science degrees awarded from 2013 to 2022, according to federal data. Then came round after round of layoffs at Google, Meta, Amazon, and others.

The Bureau of Labor Statistics predicts businesses will employ 6% fewer computer programmers in 2034 than they did last year.

All of this should, in theory, mean there is an ample supply of eager, capable engineers ready for hire.

But in their feverish pursuit of artificial-intelligence supremacy, employers say there aren’t enough people with the most in-demand skills. The few perceived as AI savants can command multimillion-dollar pay packages. On a second tier of AI savvy, workers can rake in close to $1 million a year .

Landing a job is tough for most everyone else.

Frustrated job seekers contend businesses could expand the AI talent pipeline with a little imagination. The argument is companies should accept that relatively few people have AI-specific experience because the technology is so new. They ought to focus on identifying candidates with transferable skills and let those people learn on the job.

Often, though, companies seem to hold out for dream candidates with deep backgrounds in machine learning. Many AI-related roles go unfilled for weeks or months—or get taken off job boards only to be reposted soon after.

Playing a different game

It is difficult to define what makes an AI all-star, but I’m sorry to report that it’s probably not whatever you’re doing.

Maybe you’re learning how to work more efficiently with the aid of ChatGPT and its robotic brethren. Perhaps you’re taking one of those innumerable AI certificate courses.

You might as well be playing pickup basketball at your local YMCA in hopes of being signed by the Los Angeles Lakers. The AI minds that companies truly covet are almost as rare as professional athletes.

“We’re talking about hundreds of people in the world, at the most,” says Cristóbal Valenzuela, chief executive of Runway, which makes AI image and video tools.

He describes it like this: Picture an AI model as a machine with 1,000 dials. The goal is to train the machine to detect patterns and predict outcomes. To do this, you have to feed it reams of data and know which dials to adjust—and by how much.

The universe of people with the right touch is confined to those with uncanny intuition, genius-level smarts or the foresight (possibly luck) to go into AI many years ago, before it was all the rage.

As a venture-backed startup with about 120 employees, Runway doesn’t necessarily vie with Silicon Valley giants for the AI job market’s version of LeBron James. But when I spoke with Valenzuela recently, his company was advertising base salaries of up to $440,000 for an engineering manager and $490,000 for a director of machine learning.

A job listing like one of these might attract 2,000 applicants in a week, Valenzuela says, and there is a decent chance he won’t pick any of them. A lot of people who claim to be AI literate merely produce “workslop”—generic, low-quality material. He spends a lot of time reading academic journals and browsing GitHub portfolios, and recruiting people whose work impresses him.

In addition to an uncommon skill set, companies trying to win in the hypercompetitive AI arena are scouting for commitment bordering on fanaticism .

Daniel Park is seeking three new members for his nine-person startup. He says he will wait a year or longer if that’s what it takes to fill roles with advertised base salaries of up to $500,000.

He’s looking for “prodigies” willing to work seven days a week. Much of the team lives together in a six-bedroom house in San Francisco.

If this sounds like a lonely existence, Park’s team members may be able to solve their own problem. His company, Pickle, aims to develop personalised AI companions akin to Tony Stark’s Jarvis in “Iron Man.”

Overlooked

James Strawn wasn’t an AI early adopter, and the father of two teenagers doesn’t want to sacrifice his personal life for a job. He is beginning to wonder whether there is still a place for people like him in the tech sector.

He was laid off over the summer after 25 years at Adobe , where he was a senior software quality-assurance engineer. Strawn, 55, started as a contractor and recalls his hiring as a leap of faith by the company.

He had been an artist and graphic designer. The managers who interviewed him figured he could use that background to help make Illustrator and other Adobe software more user-friendly.

Looking for work now, he doesn’t see the same willingness by companies to take a chance on someone whose résumé isn’t a perfect match to the job description. He’s had one interview since his layoff.

“I always thought my years of experience at a high-profile company would at least be enough to get me interviews where I could explain how I could contribute,” says Strawn, who is taking foundational AI courses. “It’s just not like that.”

The trouble for people starting out in AI—whether recent grads or job switchers like Strawn—is that companies see them as a dime a dozen.

“There’s this AI arms race, and the fact of the matter is entry-level people aren’t going to help you win it,” says Matt Massucci, CEO of the tech recruiting firm Hirewell. “There’s this concept of the 10x engineer—the one engineer who can do the work of 10. That’s what companies are really leaning into and paying for.”

He adds that companies can automate some low-level engineering tasks, which frees up more money to throw at high-end talent.

It’s a dynamic that creates a few handsomely paid haves and a lot more have-nots.

Wealthy Families Increasingly Question Where in the World to Keep Their Assets

A question for wealthy folks with homes, businesses, and family members all over the world is where to park their assets.

A divide has opened in the tech job market between those with artificial-intelligence skills and everyone else.

Playing a different game

Overlooked