Angelo Venardos of Heritage Trust looks at how and why wealth planning is becoming more important in Asia, and how discussions with clients are evolving.
Date: Mar 2012
In Europe, for example, he said it took three generations for wealth to be created. In emerging Asia, by contrast, the timeframe has been much shorter.
In Indonesia, for example, this is taking one generation to occur, and in China it is taking 10 years, said Venardos.
With such a different client profile, he said it is important to consider these differences in the context of who is servicing that, at what level, and at the type of clients involved.
Basic conversations with clients
The overall approach taken by a private banker when speaking to a client shouldn’t just focus on the performance of the funds and other products the client is interested in.
The client also has in the back of their minds issues relating to succession planning, said Venardos.
For example, how will the client look after his wife, if there is one or more; and his children, if there is more than one family.
There are also issues relating to tax compliance which come into play in today’s environment, he added.
Pitfalls of the process
According to Venardos, when looking at the litigation that has taken place since the 2008 financial crisis, clients have complained about the mis-match in expectations based on the delivery of what banks did or didn’t deliver.
On the trust side, he added, there is an element of risk involved when the ownership of the funds is transferred to a trustee, he explained.
The risk comes because the trustee is now responsible to the beneficiaries, not the settlor.
As a result, advisers and banks need to be less cavalier about writing new business, along with the need for processes to be adhered to a lot more closely.
