Patricia Woo on the Holistic Approach to the UHNW Family Office of the Future

Patricia Woo, Partner, Hong Kong and Co-Head of the Family Office Practice at Squire Patton Boggs (SPB), is a fund, trust and tax lawyer who creates family offices for global ultra-high-net-worth (UHNW) families. She is also someone who takes a novel and fascinating spin on family offices and the family at large, maintaining that if approached properly, harmony can be achieved, that will help the family’s wealth and its well-being endure for years, and possibly for generations to come. Woo met with Hubbis via video link recently to her home office in Hong Kong. She offered some invaluable insights into how UHNW families can strive to achieve enduring wealth and family harmony by combining the investment-centric and welfare-centric approach and creating what she terms the ‘third way’, a family office that transcends both aspects. This she calls the integral approach to the family office, and it is one that places as great an emphasis on spiritual goals as on secular objectives.

Woo begins the discussion by reporting that she is often asked by UHNW clients if the establishment of a family office means that there will be no more disputes in the family and among their descendants. “I do not mince my words,” she says. “A family office, I tell them, gives focus and structure to your family and family wealth, thereby reducing the likelihood of disputes, but there is only so much that documents and systems can do. At the end of the day, family harmony depends on people, and if you can incorporate more of a spiritual element from the outset, then their wealth and well-being will more likely thrive in the future.”

She expands on this, remarking that she had some years ago discussed these matters with the fourth-generation leader of a major business family. “He actively advocates the importance of the physical, psychological, social and spiritual aspects of wealth,” she explains. “He told me that real peace is only possible if the family members pursue spiritual practices together. Well, I believe that he is entirely right. This is also where transpersonal psychology and family offices, two seemingly totally unrelated concepts, become truly relevant.”

The Integral Approach

In a special report Woo released in 2019 titled ‘An Integral Approach to Family Office’, Woo analyses the rationale for the establishment of a family office and contextualises the mission as one that should have as its paramount aim the consolidation of a wide variety of financial, and also family harmony and continuity goals.

Having highlighted how family offices should combine as many vital organisational, personal, familial and psychological elements as possible, she concludes that the integral approach to a family office offers the opportunity for a UHNW family and its family office to be what she terms “integrally informed” of their strengths and weaknesses.

“The awareness,” she elucidates, “will be the basis for future development. An integral family office facilitates not only a more holistic organisation of the affairs of UHNW families but also a culture and best practices that enable transformation, a process with a direct, profound impact on the self and the family, which in the words of H. Hunt in a paper published in 2016 in the Journal of Transpersonal Psychology, can be the beginning of a life-long deepening of transpersonal realisation.”

The path to development

She explains that there is no single definition to the term transpersonal psychology, but that in the context of a family office, she believes the most relevant perspective of transpersonal psychology is perhaps its capacity to provide a development path, which takes the family and its members from an ego-based mentality to a broader, wholeness-based perspective.

“UHNW families are drivers of many economic activities,” she remarks. “They control considerable resources, and their businesses provide livelihoods for many people. Philanthropic causes and incubation of new technologies are often supported by the richest families. Once, at a private wealth conference, I asked the audience if they would like to be in a world where resources are controlled by families that are motivated by fear or by love? The answer was obvious. If UHNW families can have access to transpersonal psychology as a way to realise their fuller potentials or if possible achieve transformation, the discipline should be recognised and incorporated as part of the best practice of such families and their family offices.”

A global perspective

Shifting back to some of the more pragmatic aspects of her role, she explains that her speciality is to build single-family offices for UHNW clients, which are often very international in the sense that nowadays families are looking for maybe two or three locations, even at the outset.

“My work is fascinating of course, as it involves numerous regulatory issues in different jurisdictions and many different funds, trusts and fiduciary structures, meaning that I am coming at this from both the internal investment vehicle angle and the succession planning and the protection angle. Aligned with the more personal and spiritual aspects, this means that I try to take a truly holistic approach with such families.”

And a spiritual path

Woo explains her own evolution towards these more spiritual aspects. “I myself have become more spiritual in recent years,” she reports, “and this has been embraced by many clients, who today often come to me because of this, as they too want to incorporate this spiritual element into their structures and their family lives. And many of those families that begin on a more secular or legal level in terms of their objectives often gradually find they migrate more towards incorporating some of these spiritual elements as well.”

Woo recalls that a very wealthy lady come to her to seek her help. “Her family had created one of the biggest IPO companies ever in Hong Kong, and she had received a vast sum of money from her father,” Woo reports, “but this was giving her sleepless nights. She felt the pressure of the money and the love of her father, leading her to worry that she would disappoint him. I told her that there was no need to rush into any external decision to how to allocate the money because this was reacting to an external event within another external event. I said that she was anxious because she had not given herself the time and the internal space to create something that reflected her, so she needed to look inwards.”

Striking a chord

It was then that Woo opened up to this particular client on her ideas relating to transpersonal psychology and the concept of the integral family office. “This really struck a chord with her,” Woo recalls, “and since then I have been conveying this proposition to my clients, who are generally highly receptive to these concepts, offering as they do a more holistic and even harmonious perspective on the concept of the family and its relation to its wealth. The spiritual and intuitive aspects are, I believe, vital to wealth and well-being, it is something that I am very passionate about.”

Woo says she does not like to pigeon-hole a family office, but that as she also lectures students who like to have clear definitions, she explains the family office as a platform which organises, strategises and manages family wealth, family businesses and family affairs, allowing the families to explore, navigate and travel their own unique transformative journey for betterment and sustainability.

Combining wealth and welfare

Woo explains that her report on the integral family office focused and filtered views from family offices with an average of USD921 million in assets under management at the time. She explains that these family offices can be divided into two main categories.

“Some families,” she reports, “have an investment-centric family office, primarily to make private investments and generate more wealth; this type of family office is the family’s asset allocator and manager of internal hedge funds and private equity funds. And some family offices are more for the purposes of asset protection and provision of welfare and services to family members; these welfare-centric family offices work with professionals to form and maintain trusts, take out insurance, draft and implement family constitutions, support family councils, hold family meetings, handle immigration matters and settle disputes within and outside the family.”

The third way

But Woo says she advocates a third type of family office, one that adopts a ‘value-centric model’, essentially a convergence of the investment-centric and welfare-centric models to offer a total solution for all aspects of the life of a UHNW family. “This,” she says, “is what I mean by the integral model, as it is the approach that combines both of these core elements of investment- and welfare-centricity.”

Woo runs through the core reasons for families first coming to her to establish a family office, all of which are well documented in the SPB literature and website. But she explains that in her vision of the family office, aside from the numerous practical missions of the family office, there is the need for love to be omnipresent in the family office and within the family.

The family office control tower

She refers to an analogy she made in one particular report she released in 2019. “My analogy is to imagine many planes in the sky and the pilots trusting the control tower, in this analogy the family office, to provide them with information on things that they cannot see themselves; they also communicate through the control tower, the family office, to each other,” she says. “Like the pilots, family members can have their own directions and destinations, but if there is a family office they can trust, they will always come back for advice and information and, by doing this, the bonding will always be there. This bonding is what one calls love.”

Seeking optimal outcomes… anywhere

Woo explains that although she is based in Hong Kong, she could actually work anywhere, and her mission is, very simply, to offer the best advice and execution on the optimal jurisdictions for particular clients, as well as offering the more spiritual vision of an integrated approach to the family office. As an aside, she explains that despite negative events surrounding Hong Kong in recent times, it remains one of the premier jurisdictions globally, and an excellent base from which to spread the word on her vision of the family office of the future.

As to the pandemic and its effect, Woo adds that this has done no more than to accelerate the interest of certain families, while the direction of travel for such UHNW families globally remains the same. “This is a situation created by an external environment to underscore how things could be when extremes happen,” she comments. “I like to stay calm and remain focused on the big picture. And I am really well supported in this by the firm at large, which acknowledges my particular ‘third way’ approach to my clients and family offices, and fully supports it.”

Agility is essential

Woo also comments that families must be dynamic and nimble, explaining that whatever the concept at the outset, family office structures should be both vigorous and evolutionary.

“There are always adjustments needed along the way,” she observes. “People have to restructure, but I never see families reversing the initial decision and shutting up shop. I never look at any adjustment as mistakes, and that is what I tell my clients."

"Every family, even families with the best planning at the outset, will have to face adjustments along the journey because a family office itself is a major learning exercise for them. For many families that I work with, this is the first time that the family leader is giving up control or thinking about how to make it sustainable and even about their own mortality.”

Positive to the core

Accordingly, when such clients come to meet with Woo for the first time on this subject, they have a visualisation of how their family office should look like. “But, as we know from experience,” she comments, “things do not always turn out the way as we imagine. Adjustments might be awkward, even painful, but should be adopted as positives, and as good learning experiences for the family. The most important for these families is to imagine the family office as the centre of a positive vision of their future wealth and well-being.”

Getting Personal with Patricia Woo

Patricia Woo is a Partner in Hong Kong and Co-Head of the Family Office Practice at Squire Patton Boggs (SPB) and is a fund, trust and tax lawyer who creates family offices for global ultra-high-net-worth (UHNW) families.

Her expertise spans structuring of single-family offices and multi-family offices, regulatory licensing and exemption, family investment guidelines, internal control and compliance manual, family constitutions, family council, hiring and compensation, internal hedge fund and private equity fund formation and restructuring (including corporate funds, segregated portfolio funds, partnership funds and unit trust funds and bespoke family funds under family trust structures), management and administration, negotiations with private bankers, prime brokers, global custodians, execution brokers and administrators, and such charitable and philanthropic ventures as establishing and restructuring of charities.

She also handles matters arising at different stages of a trust’s lifecycle, namely, creation of trusts and private trust companies, their management, restructuring and termination, and loan and acquisition transactions. She drafts complex wills, enduring powers of attorney and handles other cross border succession and tax issues and advises private banks and trust companies in the launch of new products and services that target ultra-high-net-worth families.

Woo is a Chartered Alternative Investment Analyst, Certified Tax Advisor, a member of the Society of Trust and Estate Practitioners (and its invitation-only Academy Community) and Certified Islamic Finance Executive. She also holds STEP Certificate and Diploma in International Trust Management, STEP Advanced Certificate in Trust Disputes, and Advanced Certificate and Diploma in Fund Administration.

She is Adjunct Associate Professor at the Faculty of Law of the University of Hong Kong, as well as Adjunct Assistant Professor at the College of Law of the National Chengchi University of Taiwan. She is also an honorary fellow of the Asian Institute of International Financial Law, lecturer of a trust training certificate course offered by Hong Kong Trustees’ Association in partnership with Hong Kong Securities and Investment Institute. She publishes widely and is a frequent speaker and media presence on the topic of the “family office”.

Woo explains that her education spanned stints in the UK, the US and Canada. She had attended a UK boarding school in Somerset, England and then obtained three degrees. Her first degree was in philosophy, economics and music, the second in financial economics and the third in law.

Woo is also pursuing a post-graduate university qualification in Consciousness, Spirituality and Transpersonal Psychology to enhance her offerings for ultra-high-net-worth families.

“As you have heard,” she says, “I believe this has enormous ramifications for families and for people, and hopefully for the world at large. Families can find a common goal which is bigger than themselves, they can overcome their short-term or long-term fears, they can find greater positivity, and they can ultimately seek and I hope to find family harmony in so many different areas, including investments and wealth, but also including their personal and family lives. I gain great satisfaction in helping families work through all these and many other areas. Perhaps, in the end, we might help them become better world citizens, and that will be better for the world at large.”