India's growing high net worth market is shying away from wealth management firms in favor of multi-family offices that can take care of all financial affairs under just one roof, reports Business Standard.

MFOs, unlike the usual wealth management company, offer dedicated teams to handle one or all of an affluent family's financial activities - going beyond simple portfolio management and crossing over to include estate planning, trusts, succession, family wealth education and real estate services.

According to the publication, what makes MFOs popular is that they profit both on their ability to work with other financial services firms and on the client fees - an element that is missing in regular wealth management firms that profit out of selling in-house financial products.

Related information from the most recent DSP Merrill Lynch India report shows that India is one of the fastest moving countries in the world, in terms of high net worth individual growth. At present, India has nearly 84,000 families whose net assets are at least $1 million.

Business Standard quotes Richa Karpe, the director of MFO company Altamount Capital Management, as saying, "Ultra-rich families are increasingly thinking that product-driven wealth management companies do not serve the purpose [of having dedicated managers to handle a family's fortune]."

There are risks, however, because the same multi-family office setup is dwindling in the US, where it was first practised. Because MFOs mostly base their fees on fixed costs, the volatility and unpredictability of financial markets could eventually thin earnings and hurt investments, says the Indian newswire.

Currently there are five firms in India that practise the multi-family office setup. Altamount Capital and Client Associates are purely boutique firms in the MFO structure, while wealth management companies Kotak Wealth Management, ASK Wealth Advisors, and BNP Paribas Wealth Management have also joined the trend, offering their own versions of MFOs.