Private wealth institutionalisation takes centre stage in Asian families’ succession plans

Ultra-high-net-worth investors are seeking tailored wealth management and protection solutions amid rising macro uncertainties.

A significant portion of ultra-high-net-worth individuals have yet to put comprehensive wealth plans in place, often due to the complexity and time-consuming nature of managing their wealth, as highlighted by HSBC Global Private Banking’s Global Entrepreneurial Wealth Report.

Such clients are facing challenges in managing complex wealth across multiple jurisdictions, ensuring effective succession planning, and navigating volatile markets, said Tommy Leung, head of global private banking of South Asia.

It has become more important for them to bank with a well-rounded wealth manager like HSBC that offers superior international reach and strong local knowledge.

This is especially so given that today’s entrepreneurs are globally connected — the wealthier entrepreneurs are, the more geographically dispersed businesses and families become, they highlighted. In one instance, a private banking client approached HSBC for mortgage needs in the United Kingdom. This discussion soon expanded to meet the client’s other expressed needs, including opening an account in Singapore to manage their investment portfolio and subsequently, commercial opportunities within SEA were explored.

Among the 973 wealthy entrepreneurs (including 95 ultra-high-net-worth individuals) polled globally in the report, 73 per cent live across more than one market and 89 per cent own businesses that are trading beyond their immediate border.

“While many ultra-high-net-worth individuals own homes or businesses in multiple jurisdictions, the next 20 years will also witness one of the largest wealth transfers in history, with trillions of assets passing to the next generation. As a result, these clients require highly sophisticated wealth management and multi-jurisdictional, multi-generational wealth planning,” said Kerri Lim, head of ultra-high-net-worth segment of Asia in HSBC.

HSBC’s private banking team that offers a global network and full suite of banking capabilities, is uniquely poised to help ultra-high-net-worth entrepreneurs manage their wealth and succession planning across multiple jurisdictions, ensuring the best outcome for the business and wealth they have built.

These clients’ needs have become increasingly complex and multifaceted over time, as they are seeking more comprehensive wealth planning solutions, including succession planning, family governance and flexible investment strategies.

Among wealth managers, HSBC stands out by offering tailored solutions that address these evolving needs.

As a prestigious international bank, it offers a global vision with a strong network of full-suite capabilities to provide holistic yet bespoke solutions to its clients.

“We provide personalised support through a dedicated team, ensuring that our clients receive the best advice and solutions for their unique circumstances,” said Lim, adding that the clients can benefit from its deep expertise in structured lending, alternative investments, and wealth planning/advisory services.

Singapore as a hub to serve the ultra-high-net-worth

Singapore, as a leading financial hub in Asia, has become a prominent base for wealthy families and individuals in the region.

The number of family offices in Singapore grew from about 400 in late 2020 to around 1,100 towards the end of 2022, according to the Economic Development Board.

“Positioned as a regional linchpin hub, Singapore connects international and regional onshore markets, particularly in South-east Asia and the Middle East and North Africa region,” noted HSBC Global Private Banking’s Leung.

The Republic’s financial stability with a strong rule of law, a robust political system and comprehensive infrastructure also boosted its status as a wealth management hub, as ultra-high-net-worth individuals, family offices and entrepreneurs look to access Asia and beyond for their business and wealth management needs.

As of end-2023, overall assets under management in Singapore grew 10 per cent to S$5.41 trillion, reflecting a rising demand for wealth management services.

With the number of the ultra-high-net-worth investors rising, HSBC is committed to grow its presence to serve the group in Singapore and beyond, on the back of a positive outlook of the region’s growth prospect.

Leung highlighted the global diversification and connectivity these ultra-high-net-worth clients need: “At HSBC Global Private Banking, we leverage our extensive global network to offer clients unparalleled access to diversified investment opportunities, especially valuable in these uncertain times.”

HSBC’s international network covers more than 60 markets in Europe, the Middle East and Africa, North America and Latin America and Asia. With deep roots in Asean, HSBC’s first branch in Singapore opened in 1877. The bank’s private banking team operates across 40 markets and 13 strategic booking centres. Singapore is one of the key global wealth hubs, with dedicated teams serving clients in Singapore, Malaysia, Indonesia, Australia, China, Hong Kong, Taiwan, India, the Middle East, Thailand and the Philippines, providing comprehensive coverage across the region.

“Our presence in Singapore allows us to tap into the city-state’s robust financial infrastructure while providing our clients with the global diversification they seek,” said Leung.

In the first half of 2024, HSBC’s Global Private Banking Asia sustained strong momentum with US$15 billion of net new invested assets, reflecting the UK lender’s strong ability to attract and manage substantial new investments in the flourishing region.

On Jun 19, HSBC unveiled its new Wealth Centre on the ground floor of Marina Bay Financial Centre Tower 2. This marked the first of three wealth centres that HSBC plans to establish in Singapore by Q1 2025, aiming to facilitate the bank’s services to the burgeoning affluent population in the country.

Distinctive ultra-high-net-worth proposition

HSBC, with a global presence in all major global wealth hubs beyond Asia, offers a differentiated proposition that goes beyond traditional private banking.

The bank offers the full breadth of the universal bank and investment platform and delivers the best of HSBC through its universal banking model with Commercial Banking, Global Banking and Markets, Asset Management, Insurance and more.

This allows its clients, such as business owners and their families, to have access to the bank’s wholesale franchise services, and have their personal, business and institutional needs in multiple markets met thoroughly.

They highlighted that the bank offers clients differentiated and customised solutions on areas including deep credit expertise, wealth planning solutions, alternative investments as well as environmental, social, and governance.

Each of HSBC’s ultra-high-net-worth clients is supported by a core team, with a global relationship manager acting as the primary contact for the client.

The relationship manager will link the client up with specialists best equipped to help them build their financial strategies, such as an ultra-high-net-worth investment counsellor who can bring appropriate ideas, recommendations and advice.

“In the strategically located booking centres, the team provides clients with not only coverage, but also connection to the respective teams around the world to provide the bank’s deep local investing and banking expertise. This makes us stand out against competition to offer global wealth and mobility solutions to our clients,” noted Lim.

Outside of Asia, HSBC is one the few banks that has a relevant position in all major global wealth hubs, including the United Kingdom, United Arab Emirates, the US, Switzerland, Channel Islands and Isle of Man.

“HSBC Global Private Bank’s ambition is to be the world’s leading wealth manager and global private bank for Asian and international clients and entrepreneurs – South-east Asia is key to our growth strategy,” said Leung, noting that the ultra-high-net-worth segment is a key focus as they offer bespoke, institutional-level solutions tailored to the complex needs of those clients.

HSBC Global Private Banking Asia reported invested assets up 23 per cent year-on-year to US$185 billion as of the second quarter of 2024, underscoring its robust growth and market leadership.

Notably, the bank provides clients access to sophisticated investment management products, bespoke financial and capital markets services, and extensive credit facilities through its global network.

Additionally, HSBC Global Private Bank has one of the largest wealth planning and advisory teams in Asia, along with a dedicated ultra-high-net-worth solutions group and ultra-high-net-worth segment team to serve the clients.

HSBC has been committed to innovation, client-centricity, and excellence, while working on developments to enhance our offerings, including advancements in digital services and bespoke investment solutions.

“We believe in a holistic approach that goes beyond traditional private banking, leveraging our global reach and strength in Asia to provide our clients with unparalleled access to growth markets, investment opportunities and best-in-class expertise,” said Leung.

A version of this piece was first published in The Business Times on 21 August 2024.