Capturing the Growth Opportunities in Optimising Wealth Solutions for Private Clients

The Hubbis Wealth Solutions Forum in Singapore on June 14 saw a host of experts offer their views on how the wealth management industry in Asia can help wealthy clients enhance their planning and structuring. In the first panel discussion of the day, some of these specialists combined to deliver delegates with some significant food for thought to start the day’s proceedings. This is a short synopsis of some of their key observations.

Chair: Lee Sleight, Head of Business Development, Asia, Lombard International Assurance

Panel Members

Carolyn Leng
Managing Director
Bordier & Cie

Francis Liu
Chief Executive Officer, Private Clients, Asia & Chief Executive Officer, Singapore
Lombard Odier

Gautam Duggal
Global Head, Bancassurance, Group Wealth Management
Standard Chartered Bank

Anthony Chan
Chief Executive Officer
Isola Capital

Michael Velten
Tax Leader
Deloitte Private

Key Observations from the Panel

An expert pointed out that in Lombard Odier’s most recent annual wealth survey in Asia, the findings highlight how over 78% of HNWIs are interested in intergenerational wealth transfer, preservation of wealth, and in those organisations that can provide a sophisticated and complete offering. He also pointed to another key finding, namely that over 60% of clients are also looking at the next generation as an increasingly ‘hot topic’.

A panellist remarked that wealthy families are looking not just for capital preservation but diversification, quality, consistency, due diligence expertise, and smooth, consistent performance for today and their future generations.

Another speaker noted that when it comes down to the third generation, it is all too often exactly where structures and plans fall apart.

While most of the time, bankers and advisors are dealing with the principal/founder or second generations, when the third generations are involved, there is very often a very different mindset and approach, this guest reported. “This is especially the case with regard to the types of assets and allocations for the family portfolios.”

She explained that a positive nowadays is that more family members now see the value of proper structuring and succession planning around the family businesses and wealth.

She remarked that Southeast Asia is replete with many different ethnicities and cultures, even within nations, so, for example, there is a broad spread of Malay, Chinese, Indian and other cultures in Malaysia alone, each also with different religions, practices, and predilections. This means a subtle approach demonstrating EQ was equally important as proving intellectual capabilities and product or structuring expertise.

There is ever more talk in wealth circles about health and protection nowadays alongside more formalised wealth and estate planning.

Health, an expert said, had been brought into sharp focus in the pandemic, and health has many connotations, including mental or spiritual well-being as well as physical health. He explained that their bank is promoting more conversations about the links between health and wealth preservation and continuity as part of the broader planning ecosystem.

The regulatory angles also affect both wealth and health very significantly, as regulations proliferate and intensify globally, driving a greater focus on enforcement, audits and investigations. All this, an expert said, mean greater complexity and more and more structuring and planning, including in the hitherto relatively relaxed or benign tax jurisdictions of the SE Asia region, at least until recent years.

These factors are also encouraging more wealthy families to look at diversifying away from their businesses at certain stages and also creating new wealth and estate structures or remediating older structures.

Moreover, there is far more cross-border compliance as assets and families are more international asset dispersion, and greater complexity around private and alternative assets, including the new wave of digital assets.

Clients are more knowledgeable today, and that requires more knowledge and professionalism from the PBs and other wealth management firms. “The demands of the clients and the complexities the advisors need to help with mean that there are considerable advantages if a single institution can leverage its multiple and often different skills to help those clients with holistic solutions, bringing in expertise from investment banking, capital markets, corporate banking and so forth, as well as the private banking/wealth specialists,” a panellist reported.

And this is even more important as some of the traditional wealth products and services are more commoditised. Additionally, this expert noted that with more than 70% of wealth coming from SMEs and family businesses in ASEAN, there is a considerable advantage in being able to offer wealthy families truly holistic advice and a very broad range of products and services.

The final word went to a guest who observed that it is not only the banks and EAMs who support clients in these areas but also leading accounting firms and consultancies.

He said they work specifically on certain client projects, including often families that are divesting family businesses and moving to cash or other investments, and these steps require specialist expertise.

He concluded that they work closely with the PBs and other wealthy management advisories to help structure the right plans and outcomes for families. They work with those external experts for products, custody, life insurance expertise and so forth, bringing them a complete suite of ideas that can then be narrowed down into the optimal combination of solutions for each client’s particular needs and expectations