Rose Chan, Director at Suntera Private Office, gives her insights into what is on the horizon for the family office landscape in Asia…
Widespread geopolitical and economic flux have prompted families of great wealth across the globe to re-evaluate and prioritise political and economic stability in their decision making. This is no different in Asia and while each family we at Suntera Private Office work with is unique, we are seeing a real emphasis on family values, business development and a strategic approach in order to fortify wealth against wider headwinds beyond anyone’s control.
How individual families do this can, however, differ greatly; for instance, we are seeing some focussed on expanding their business empires while others are prioritising succession planning for the next generations or on formulating seamless exit strategies. A key part of our Private Office function is helping our Asian clients identify those priorities while leaning into their unique strengths.
What are undeniable trends in the region are the rise of diversification and digitalisation. Diversification, whether that be via expanding into new jurisdictions or broadening the variety of products and industries invested in, is supporting families to strike the right balance – one which grows their assets while offering stability at uncertain times.
Meanwhile, the last two decades have seen a real acceleration in digitalisation with every corporation adopting processes, to varying degrees, aimed at modernising and streamlining workflows to enhance productivity. This progression has created the room for Asian families to focus more on profitability amid an exponential growth trend.
When it comes to succession, wealthy families are not uniform in their response although it is fair to say that the most successful strategies usually stem from a ‘sooner the better’ mentality. One crucial outcome of such plans can be seen in a family’s approach to education especially when underpinned by the belief in the familiar Chinese proverb of ‘teaching a man to fish rather than simply giving him the fish’. Consequently, an academically structured educational approach to succession planning, one which not only passes down depth of knowledge but instils collective family values, is vital to enable effective succession. Our Private Office team is acutely aware of the value of such an offering and is well-versed in working with all generations to facilitate appropriate education pathways around the managing and handling of family wealth in preparation for the nextgen’s future role.
The increasing involvement of this new generation is also heightening families’ appetite for philanthropic endeavours, particularly those with ESG ambitions at their heart. Post-Covid and with growing concern regarding global climate change, Asian families have realised they can play an instrumental role – and are eager to do so – in changing the trajectory of environmental damage being caused and safeguarding the planet for all.
From a structuring perspective, the most significant considerations for Asian families are centred on legal and tax implications as well as sustainability in achieving long-term goals.
As such, a number of aspects need to be taken into account by service providers such as the nature of assets to be settled into the structure, whether they are acting through the prism of a business or private wealth as well as any future plan for assets. Crucial to these decisions is understanding the family’s status – including the tax residency of both first and second generations – and their position in the life cycle of the family, for instance, whether the first generation is ready to bring the second generation into the family business or whether they still hold the torch.
A holistic approach, one which utilises different structures such as special purpose vehicles and trusts, while also drawing from external jurisdictional experts like legal and investment advisers, is where the solution lies. For our part, where advice and services are beyond a single provider, we work with trusted partners who are experts in their field in order to provide clients with a comprehensive offering that takes into account their diverse and unique requirements.
This bespoke provision is what sets Suntera Private Office apart and, alongside our ethos of ‘empowering responsible ambition’ and our aim to be a ‘lifetime partner’ instils confidence in our Asian clients to support their needs today while also having an eye on tomorrow.
To discuss our tailored solutions for your family’s future, please contact Rose Chan, Director:
DIRECTOR, SUNTERA PRIVATE OFFICE