In his novel Anna Karenina, Leo Tolstoy held that happy families are all alike but unhappy ones each have their own unique misery. Any investment consultants dealing with household finances is bound to find, however, that all families have a unique range of needs, no matter how happy they may be. Europeans have long used “family offices” –sets of wealth management professionals taking care of families’ financial needs – for high-net worth accounts.Family offices are more than just fund managers – they also take care of such issues as residency and estate planning. Rapidly growing populations and economies in East Asia, especially Mainland China, are creating a large number of millionaires and billionaires, many of whom started out in modest circumstances. This has created strong demand for family-office services, finds Chi Man Kwan, CEO and Founder at the Raffles Family Office, which has substantial operations in both Hong Kong and Singapore.
East Asia in general has had a boom since the Second World War with some notable exceptions, such as the 1997 Asian financial crisis. This has created many, mostly self-made, millionaires and billionaires. Is East Asia a global hotspot for family offices?
East Asia as a region has no doubt become a hotbed for wealth creation, with its fast-expanding economies, rapidly growing population, strong economic infrastructures and supportive governments laying down solid groundwork. This has given rise to wealth management, preservation and legacy planning needs, thus creating the environment for the family office business to flourish. Hong Kong and Taiwan, for example, have grown to be relatively mature family office markets with sophisticated understanding of the idea. The industry, including us at Raffles Family Office, has experienced a tremendous increase in client demands and interests from around the world, and we are bullish on the region’s growth.What is the typical net worth of a family that needs the services of an office, as opposed to simply using fund managers?
While it differs from institutions to institutions and even between markets, generally clients that are considered high and ultra-high-net-worth investors will benefit from working with a multi-family office to maximise cost efficiency of managing their wealth, and at the same time receiving bespoke services and support across all aspects of wealth and legacy preservation that are aligned with their best interests.Mainland China has had a turbo-charged version of the Asia boom since 1978. Is this key market still growing strongly?
According to a (Shanghai-based wealth-tracker Hurun) research report, Mainland China recorded 182 new billionaires in 2019, or 3.5 new billionaires per week. Shanghai also overtook Hong Kong for the first time in the number of billionaires. At Raffles Family Office, we certainly see great growth potential of the mainland market, as evidenced by our joint venture partnership with a financial-adviser platform iFast. The joint venture will allow us to start catering to Mainland China’s ultra-high-net-worth wealth management market in late 2020 with a focus on addressing unmet onshore and offshore wealth and legacy planning needs.Is Hong Kong an ideal gateway for your global clients to invest into Mainland China, as well as a market/hub for your mainland clients’ investments offshore?
As a leading global finance hub and home to a burgeoning family office industry, Hong Kong offers unique advantages to businesses such as ours. The city continues to serve as the conduit between the world and Mainland China, a vastly underserved market for high-net-worth-individuals that leverage Hong Kong to diversify their investments beyond renminbi assets. Hong Kong’s financial sector, much like its capital markets, is vibrant and highly developed. The proximity to the mainland market also enables global investors to explore investment opportunities in Mainland China through Hong Kong.
Tolstoy’s observation on happy families aside, wealthy families all have different financial and associated needs – including such issues as residency and health services. Is the ability to offer customised services, as opposed to broad-brush fund-management, a key advantage for family offices?
What sets family offices like Raffles Family Office apart from fund-management houses is that we can add far more value than simply managing clients’ assets and helping them invest. We live in an increasingly complex world where regulatory developments, a challenging investment universe and geopolitical risks can impact various elements of family wealth. At Raffles Family Office, we adopt a holistic approach and offer a full suite of personalised services. Face-to-face meetings with clients are difficult at the moment – have you seen a strong increase in use of webinars, video presentations and virtual conferences?
Face-to-face meetings have been an integral part of Raffles Family Office’s client-relationship management process. While much of those have ground to a halt, we have not had any problems maintaining close relationships with our clients by adopting a multi-platform approach, contacting clients via phone, email, online portal and video. We have also conducted a number of client webinars since earlier this year, which have proven to be a success. So yes, there has certainly been a strong increase in all forms of online and virtual platforms.Will you extend into fast-growing Southeast Asian markets such as Malaysia, or more established Northeast Asian ones like South Korea or Japan?
Raffles Family Office’s ambition is to become Asia’s largest multi-family office and we are always looking at opportunities to grow. Our current market presences are important bases from which we serve clients from across the region, for example, North Asian clients through Hong Kong and Singapore as a hub for Southeast Asian clients. From that, we are also keeping a close eye on where to go next. We look forward to sharing more updates on our expansion with everyone.Your site is, understandably, available in English and Chinese – but also in German (main picture shows a view of Frankfurt). Do you intend expanding into Europe?
For Raffles Family Office, Europe is the origin of family offices where they have a much longer history and deeper establishment. We closely and regularly work with European fund managers and investors who are looking to capture the Asian opportunities, and we very much hope to continue fostering these relationships. In fact, Jaydee Lin, our managing partner, speaks German, which certainly reflects the level of talent diversity in our team.
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