THE FINAL WORD R E G U L AT I O N
Both Singapore and Hong Kong are placing a strong emphasis on cultivating a competitive and supportive environment for family offices. What further initiatives should each/either regulator undertake to nurture the development of a family office-supportive ecosystem?
Tee Fong Seng, Pictet Wealth Management Asia Both Singapore and Hong Kong have developed attractive offerings for the set-up of family offices in the Greater Bay Area and Southeast Asia areas. Singapore can rely on its stable political environment and efficiency in the asset management industry, while an active stock market, rule of law and free flow of capital and information have made Hong Kong a natural choice for mainland wealthy families to set up offices there. Both financial hubs have carried measures to attract family offices to come to the region, from attractive tax exemptions on specific types of income in Singapore, to new ways for investment funds to be set up in the form of Variable Capital companies in Singapore and limited partnership structure in Hong Kong. We believe that streamlining regulations on family offices will be key for both Hong Kong and Singapore to continue attracting UHNWI. Less bureaucracy will also be a strong argument for both financial hubs. Lam Leong Yip, Bank Julius Baer T h e re l e v ant aut h or it i e s h ave prov ide d a robust plat for m in both Singapore and Hong Kong to promote the establishment of family offices. The growth of the capital markets and the newly created wealth for many families in the region, do necessitate facilitating the development of family offices. The robust legal and regulatory framework and stable financial infrastructure, will enable the industry to build trust and confidence to the wealthy families and family office advisers in the region. The key is to protect the long term interests of clients, and having a sustainable family office industry. The governments should continue to build the confidence in the industry by promoting the highest qualified and talented participants in the industry, while issuing guidelines for the long term needs of family offices by having appropriate guidance regarding disclosures on potential conflicts, transparent fees structures and ethical conduct, with the primary focus on clients’ interests.
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Steven Lo, Citi Private Bank Asia Pacific We have to recognise that not every family office is the same. In the past, the focus was on a good product platform with an open architecture. Now we have to recognise that family offices are increasingly sophisticated and their needs extend beyond the investments product capabilities. We have seen that the interest from family offices is not just in personal investments but in corporate activities as well. They are often quite sizeable and global in their outlook and requirements. We understand this trend and our extensive platform across the Citi franchise and our globality has allowed us to accommodate and work with these institutional-size family offices. This trend is something the regulators should recognise — and also acknowledge that not all institutions will be equipped to handle the wider needs of this segment. Michael Blake, UBP The attributes that make Singapore a n d Ho n g Ko n g a t t r a c t i v e a s international financial centres also make them attractive as family office jurisdictions. The priority now is to build on this strong foundation by developing the legal, tax and wealth structuring sectors, encouraging centres of expertise on family governance and family offices and supporting the emergence of family office networks across the region. Anupam Guha, ICICI Securities Limited One of the key aspects of the family office business model is an alignment of interests. The regulators in India have taken key steps in this regard. New regulations regarding investment advisory or portfolio management services have resulted in increased transparency and alignment of fee structures.
Lok Yim, Deutsche Bank We b elie ve it is imp or t ant for both Hong Kong and Singapore to maintain their competitiveness. We support education to nurture more talented people to join the industry. Shang Xiao, CreditEase Wealth Management We noticed that a lot of family offices have global asset allocation needs. Instead of focusing on a single local market, they seek services to help allocate family assets around the globe and across asset classes. We believe it is critical to have a cooperative and healthy relationship between regulators from different jurisdictions in order to nurture the development of a family office-supportive ecosystem. Therefore, we think one thing that regulators can do is to improve dialogue between each other across jurisdictions to harmonise rules and regulations around cross-border investment. We believe support for investment advisor y licensing and registration is key to nurturing a family office-friendly ecosystem. We have seen that in the US there are many registered investment advisors (“RIAs”), and in Hong Kong investment advisory services are licensed and regulated by the SFC under type 4 regulated activities. We hope a similar licence category can be granted in mainland China to allow more qualified professional investment advisors to support family offices. Arnaud Tellier, BNP Paribas Wealth Management Asian financial hubs are eager to promote themselves as a place of business, but would be well-advised to delineate more clearly their unique selling propositions in terms of their location for both Asian families and non-Asian families seeking to build an Asian presence. For both categories, a leaner, more actionable framework to sophisticated private investment offices would be desirable. This could take the form of a dedicated regulation enabling families to be
