Such families are increasingly turning to HSBC for advice on restructuring these traditional businesses from a commercial point of view.
The attraction is having the universal bank offer a one-stop solution in further managing the family’s private investments to sustain that wealth through the generations ahead.
The bank’s sweet spot also comes with its strong focus on China and Southeast Asia, with its presence in these markets cemented with its 150 years heritage in the region.
With roughly three billionaires freshly minted in China every week, HSBC is looking to serve Chinese offshore wealth coming through Hong Kong, says Tan Siew Meng – HSBC’s Regional Head of Global Private Banking for Asia-Pacific.
Ms Tan notes that a lot of the Chinese are deriving their wealth from building successful businesses that are then listed in Hong Kong. That creates a strong channel of offshore Chinese wealth from ultra-high net worth (UHNW) clients that HSBC can tap on through its strong base in Hong Kong.
Wealth out of Southeast Asia markets including Singapore, Indonesia, Thailand and Malaysia, also presents significant opportunities, with families in these markets likewise looking at ways to restructure their family businesses, and to apportion wealth across the family network.
Ms Tan adds: “These are our key growth segments, and as we continue to execute our growth ambitions alongside those of our clients, we are well positioned with the right structures to serve the ultra-high net worth families. We are focusing as well on the next generation to support intergenerational wealth transfer.”
As Philip Kunz, HSBC’s Head of Global Private Banking for Southeast Asia points out, HSBC can offer strong connectivity and collaboration between different parts of the bank to execute these restructuring strategies seamlessly on behalf of the Group’s wealthy clients.
“That’s the piece that allows us to execute our strategy very well. Where we see the passing of wealth, the families understand the restructuring that needs to take place in the family business,” says Mr Kunz.
“We bank individuals and commercial clients, and also have an investment banking arm. When we are having these conversations with clients, we understand that wealth is built from running successful businesses. Thus, our ability to understand businesses is a competitive advantage for us.”
He observes that more founders of Asian businesses are stepping away from operating the business, and now prefer to just stay as owners.
With that, HSBC designs governance charters so families can reap the best financial benefits from the pure ownership of their family business.
Even as different family members begin to branch out into new areas of investments, HSBC also helps families to structure vehicles to allow them to hold these investments together.
Through its trust company, Private Wealth Solutions, HSBC helps families understand their legacy concerns and the philanthropy opportunities that they want to pursue. With the bank’s global network, the family trust is not limited to just local or regional geographies.
The corporate restructuring that underpins the growth of Asian wealth in the years ahead comes as well, as the second or third generation of these entrepreneurial families may want to branch out and embark on their endeavours. For some, they see an opportunity outside of the traditional family business and go on to pursue their passions instead.
“We advance prosperity for wealthy families with a desire and duty to succeed, by helping them engage with the world outside their world,” says Mr Kunz.
One example that demonstrates this purpose is the engagement of the Next Generation and immersing them in business practices beyond impact investing. Over the last few years, HSBC has brought its Next Generation clients to the jungles of Borneo to observe the impacts of climate change and the power of conservation. Ms Tan says that focus on sustainability resonate well with the next generation, and provides additional insight into the role of sustainability into their family businesses and family wealth.
She adds that with HSBC’s long heritage, it has had a long track record in working with families transferring wealth through the generations. In some cases, it has worked with families to ensure continuity when the patriarch or matriarch passes on.
That experience allows the bank to carry through with helping clients at this next phase of wealth transfer, while embracing new trends of investing and doing business.
“The experience in having led actual generational transfer is the experience that not every bank has.”
HSBC’s success in guiding UHNW families through legacy planning is backed by a strong talent pool. The bank has attracted high-calibre talent from leading private banks, with a string of recent appointments that reflect the bank’s renewed focus and investment in the UHNW segment.
These new hires include Chan Eng Chien, Head of UHNW Solutions for Southeast Asia, who will focus on bespoke investment and products; James Cheo, Chief Market Strategist in Southeast Asia, who will glean market insight for wealth clients; and Rowan Tan, Head of Global Solutions Group for the region, who will work on making the connection with the investment bank for moments of unlocking wealth such as through an IPO or an M&A process.
HSBC is also backed by experienced bankers. Ms Tan Siew Meng is one such banker who started out in corporate banking and grew her career with HSBC across business lines before leading the private banking business for the region. The bank is encouraging intergroup collaboration as well, bridging the gap between various lines of businesses such as between commercial banking and wealth management.
With Asian wealth rising at a faster rate than any other region, UHNW clients and family offices increasingly require bespoke and tailored solutions for investing, financing and hedging. HSBC Private Banking is fully geared up for this, and aims to bring an institutional approach to this client segment backed by the Group’s international network and universal banking capabilities.
Philip Kunz, HSBC’s Head of Global Private Banking for Southeast Asia, and Tan Siew Meng, HSBC’s Regional Head of Global Private Banking for Asia-Pacific