Hywin Wealth’s Nick Xiao on Asia’s Nextgen Wealth and the Evolution from “Riches to Values”
Nick Xiao joined China’s Hywin Wealth (NASDAQ: HYW) in November 2019 as Vice President in charge of overseas business and also took up the reins as CEO of its Hong Kong arm. Hywin is dedicated to serving High-Net-Worth families in Greater China and beyond, across clients’ lifecycle and across onshore-offshore. Hywin Wealth boasts more than 1,600 relationship managers serving over 110,000 wealthy clients globally. Nick sat on the panel of experts at a late April Hubbis Digital Dialogue discussion on how the wealth management industry in this region is meeting the evolving needs and demands of the next generations of clients, as they inherit or make even more of Asia’s truly vast and rapidly growing private wealth. We have summarised some of his valuable insights in this Q&A.
Hubbis: For those not so familiar with Hywin, what is the opportunity you see in the region and beyond?
Nick Xiao: Hywin Wealth is a leading independent wealth manager in Greater China, and a partner of the Hong Kong SAR Government in its initiative to nurture HK as the hub for global family offices.
Chinese private wealth has been expanding at a phenomenal rate, and as Chinese High-Net-Worth Individuals (HNWIs) and the ultra-wealthy globalise their investment portfolios, their footprint, and also their lifestyles, we want to be there to cater to their needs and expectations. China’s wealth is relatively young, and so many of these younger generation clients are leading the way to the future.
Indeed, China’s wealth market is now the second-largest globally and very soon will become the largest. Numerous market observers have opined that Chinese wealth will be the single largest bull market for global financial institutions in the next decade.
Hywin Wealth is led by our CEO, Madame Wang Dian, who is one of the leading figures shaping China’s wealth management industry. Her philanthropic passions and cultural pursuits also set the benchmark for China’s entrepreneurial classes.
Hywin Wealth’s businesses in HK – operating under the brand of Hywin International - provide wealth management, asset management, and insurance brokerage services through various licensed entities.
Hubbis: How would you characterise the needs and expectations of Asia’s and, in particular, China’s Nextgens, and how can the wealth management industry adapt to those demands?
Nick Xiao: We all know of the rapid growth of private wealth in Asia, something of a ‘rags to riches’ story in the past half-century. And today, the story has shifted amongst the second, third and fourth generations into a mission of “riches to values”. In the past decade or so, I have been impressed how these generations have a truly ‘authentic’ approach to life’s challenges - having grown up with security and affluence, they now seek authentic advice, have authentic care, and want to make authentic impact - that is probably the biggest challenge for wealth managers like us.
Hubbis: Expanding further on that theme, how does this impact their investments, and how do you cater to those expectations?
Nick Xiao: I would first state that the pandemic has changed a lot of things, including people's time horizon.
Five years ago, ten years ago, clients approached things like succession planning, ESG and so forth mainly as an afterthought, as a mental box-ticking process, but now everybody's time horizon has accelerated. Succession, sustainability, direction of society - all these are no longer the topics to address in some foggy, distant future. This is because we have all been forced to face mortality.
For the younger generation, interestingly, they will say, look, I want to change the world, not just to feel good, but to do good. And those in perhaps their 20s and 30s look around and see that the resources they can apply to achieve those goals are - surprise! - within the family fold, the family businesses, where they immediately have access to capital, influence and a socialising platform.
Accordingly, a significant percentage of our younger clients would say, ‘look, I want to join the family firm, I will keep the family business going, and make it more meaningful, and make it a vessel of positive change.”
Hubbis: Hywin is highly China-centric, so can you elaborate for example on what different approaches clients from China and Greater China might expect or might take?
Nick Xiao: For Greater China, I would say people consciously and proactively look for disruptors. Nothing in Greater China is linear, so people actually want to anticipate the trends and see the next disruptions. People do not react; they don't respond; they position for what’s to come. They say, okay, what's the next disruption for business, for wealth, for personal pursuits. They love all that.
In other parts of the world, by the way, people look more for patterns, structures, and experiences. But in Greater China, our clients, especially younger generations, are determined to identify what is inefficient, what's bad, what can be improved. They want to drive change; they want to embrace that kind of ‘I-am-behind-the-driving-wheel’ mindset; it is quite amazing to see this amongst our clients.
Hubbis: Are the younger generations in China and across Asia truly that committed to helping change the world?
Nick Xiao: Ok, from my viewpoint, I genuinely believe in the Nextgens as a force for good, a force for change, and that is what we are seeing more and more. In Greater China, there are many ecological and equality challenges, and many things seem to have been embedded in structures.
But I will say with a youthful, refreshing look at the things, the Nextgens there believe they can come up with very different ideas, really make a difference.
I can give you one example. In China, in some of the less developed provinces, many children have not had what I would call proper schooling; they have basic schooling, yes, but not good schooling. Of course, clients can donate to schools, but all that requires channelling money and resources through the bigger system.
So the question is more, how we can make a direct impact in a quick, precise way. And to answer that, some younger generations of our clients, they started an initiative called ‘Room to Read in China’. Over the past four years, they built and now run more than 100 so-called village libraries, perhaps just a room in the local dormitory or maybe inside the village hall. But these places offer proper seating, proper shelves, proper books; the books are refreshed regularly. You see a need, and you find the best way, you bring impact to people. These young clients – with their healthy impatience and hunger for impact – exhort all of us to do better, and do it quicker.”
Hywin Wealth – A Snapshot
Hywin Wealth was founded in Shanghai in 2006 and is today a leading independent wealth management institution in Greater China, with 169 business locations and more than 2,300 employees as of June 2020. Hywin Wealth listed on Nasdaq in March 2021 and trades under “NASDAQ: HYW”.
Hywin International is the marketing brand for various Hong Kong-based businesses of Hywin Wealth. Hywin International’s services include EAM, investment advisory, discretionary portfolio management, funds, and family advisory, provided through Hywin Asset Management (Hong Kong) Limited and Hywin International Insurance Broker Limited (HIIB).
An earlier Hubbis feature article on Hywin International: “Hywin International: Riding the China Waves.” View that article here - https://pdf.hubbis.com/pdf/article/hywin-international-riding-the-china-waves.pdf
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