What Is Family Office? This Is Understanding, Duties, Benefits, And Plans In Indonesia

Illustration of Family office (Unsplash)

YOGYAKARTA The term family office is hotly discussed. This happened after the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said that his proposal to build a family office in the country received the blessing of President Joko Widodo (Jokowi). Then what is the actual family office?

Reporting from Smart Asset, family office is a wealth and asset management company that provides their services to very high net-rich families.

It is said to have high wealth and assets if the family has at least 30 million dollars (around Rp.492,930,000,000) for investment. However, the high amount of wealth has many versions.

Overseas, families or individuals who employ family office companies on average have a net worth of at least 200 million US dollars or around Rp. 3.29 trillion (exchange rate of Rp. 16,457/US dollar).

There are many things that family office does, one of which is being a financial advisor. This wealth and asset management firm will provide considerations regarding how to maximize, preserve, and manage family wealth as well as possible. The Company will carry out various activities such as tax planning, purchases to property management, investment management, even including expenses related to charity.

Even family office can handle things related to lifestyles such as those dealing with careers, tours, and even collections of works of art. If needed, the family will consult a family office when one of their family members will enter college or start a career in certain fields.

The purpose of the family office is to help rich people develop their wealth and preserve it for future generations. It also helps the person solve something. Whether they want to put the child into college or start a second career in the field of public speaking, the family office is most likely the first place they've contacted.

Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan said that President Jokowi agreed to hold a family office in Indonesia. He also compared the existence of the company abroad, such as in Singapore which has 15,500 family office. Meanwhile, Indonesia does not have a single firm.

Luhut in the Working Meeting of the DPR RI Budget Agency which was held some time ago also stated that the formation of family office in Indonesia, the state was able to reap funds of up to 200 million US dollars or equivalent to approximately Rp. 3.2 trillion.

Regarding the statement of the Coordinating Minister for Maritime Affairs and Fisheries, Chairman of the OJK Board of Commissioners Mahendra Siregar said that discussions regarding family office were still in the internal meeting stage. OJK is still monitoring its progress.

"Regarding the government's plan regarding family office in the Republic of Indonesia, our understanding of this topic is still being discussed internally by the government and we are careful that later the President's thoughts and ideas will be conveyed to get further approval or direction," Mahendra said during the RDK OJK press conference, Monday, June 10.

In addition, Mahendra also said that the existence of family office in the country has the potential to open up opportunities for new financial instruments to be created in Indonesia.

That's information related to family office. Visit VOI.id to get other interesting information.