Asian ultra-high net worth families’ wealth is continuing to rise, and firms are looking to the next generation’s offering in a bid to keep it.
Jersey Finance released its Evolution of Family Offices in Asia – Views from Asia’s Wealth Management Community report, which surveyed around 100 people in the Asian wealth management community.
Some 61% of respondents said that the establishment of family offices in Asia is driven by future generations.
The report suggests it is important for wealth managers to adopt newly-established technologies and best practices, as well as paying close attention to the rise of investment strategies such as sustainable and environmental, social and ethical investing.
Operation
Nearly three-in-10 (27%) said “full service” support was a priority for their clients when establishing a family office.
This indicates that family offices need to perform not only as professional investment advisers, but also as trusted partners to different generations providing crucial resources for many other administrative or lifestyle tasks, including residence and citizenship, education, healthcare and reporting.
The report also found that the influx of global regulations and inter-governmental cooperation is having a fundamental impact on family office structures, prompting families to centralise management and professionalise governance of their worldwide financial affairs.
When it comes to the selection of a location for a family office, for instance, the report found that the market’s legal and political environment (39%), proximity to key family members (26%) and availability of supporting tax, legal and fiduciary services (19%) were the top considerations.
Clear message
Joe Moynihan, chief executive at Jersey Finance, said: “The message is clear – the focus of family offices in Asia is shifting drastically, with the views and preferences of the next generation set to transform the future family office landscape.
“In addition, for those firms and international finance centres looking to seize this growth opportunity, it is absolutely vital to focus on global best practice, governance and talent to address the increasingly diversified and complex demands of Asian clients.”
Those surveyed included senior management, wealth solutions gatekeepers and heads of business units in international and local private banks, retail banks, IFAs, single and multi-family offices, independent wealth managers, and professional services firms (lawyers, tax advisers and fiduciary services firms).
Separately, a UBS report found that that Asia-Pacific family offices had the highest investment returns among family offices in other regions in a 12-month period, generating 6.2% compared with an average return of 5.4%.
The report also said that sustainable investment and succession planning are top of mind for Asia’s family offices.
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