Rich families around the world face a choice between surrendering the privacy of their investments and significant legal risk as a consequence of new US rules designed to improve hedge fund transparency.

Offices established to manage family wealth need only a tenuous connection to the US to be required to register as an investment adviser with the Securities and Exchange Commission. A family that fails to do so runs the risk of punitive damages if sued in US courts by estranged family members or disgruntled employees, lawyers warn.

In a boon to tax authorities, compilers of rich lists and simply those who are curious, families that do register will have to disclose details of assets and the identities of those for whom the family office manages money.