Exploring the Key to Wealth Legacy
The
Hong Kong Academy for Wealth Legacy (“HKAWL”), under the Hong Kong Financial
Services Development Council (“FSDC”), will be formally established and hold
its inauguration ceremony today to provide a comprehensive talent training
platform for the family office sector, asset owners and wealth inheritors, and
to facilitate the development of family offices in Hong Kong. At today’s inauguration ceremony, a number of
family office representatives and industry experts will discuss the
opportunities and development of family offices, and share their insights on
the key service areas of the HKAWL.
The establishment of the HKAWL is one of the eight policy measures set out
in the Government’s “Policy Statement on Developing Family Office Businesses in
Hong Kong” (“Policy Statement”) issued in March this year. These measures aim to create a conducive and competitive
environment for the businesses of global family offices and asset owners to
thrive in Hong Kong, while strengthening the development of the asset and
wealth management (“WAM”) business, financial services, and related
professional services in Hong Kong.
According to industry estimates, there were over 150 000
ultra-high-net-worth individuals (individuals with investable assets of at
least US$30 million) in Asia in 2022, representing one-fourth of the global
ultra-high-net-worth population. As of end-2022, Hong Kong’s WAM business was
worth approximately US$3.9 trillion, with US$1,148 billion in assets under
management in private banking and private wealth management. As wealth continues to accumulate in Hong
Kong and Asia, the next 20 to 30 years will be an important time for family
offices to plan for wealth succession.
Apart from such core functions as investment management and tax planning,
family offices also shoulder responsibilities in the management of family
business, succession planning and training for the next generation, family
philanthropy, and education and inheritance of financial management concepts covering
social responsibility, sustainable development, etc. Family offices not only assist asset owners in
achieving wealth growth and succession goals but also transmit family values to
wealth inheritors, playing a vital role in maintaining family values and
enhancing family cohesion.
Against this backdrop, we have received strong support from partners
including industry associations, professional service providers, universities as
well as the dedicated FamilyOfficeHK team of Invest Hong Kong (“InvestHK”) to the
establishment of the HKAWL under the FSDC’s institutional framework. The HKAWL will examine in detail diverse topics
on wealth management, family governance and intergenerational integration, impact
investing and philanthropic impact, as well as art development. The HKAWL will also provide tailored training
and networking activities for the family office sector, asset owners and wealth
inheritors, with a view to promoting positive financial management values and strengthening
the talent pool for family offices.
Family Governance and Intergenerational
Integration
Well-established family governance practices and systems have a
significant role in preserving family values and unity, not only enabling asset
owners’ more efficient wealth allocation and succession but also strengthening
family cohesion. This is important to
families, particularly first-generation entrepreneurs, in the early stages of
the succession cycle. Considering that first-generation
entrepreneurs may not have experience in establishing family governance
frameworks, the HKAWL will serve as a talent training hub for asset owners and the private wealth management industry, seeking to
enhance entrepreneurs’ overall management capability in wealth accumulation and succession,
and facilitate their understanding of the best practices and latest industry trends
through continuous knowledge exchange, thereby bolstering the sustainable development
of the whole family office ecosystem.
Impact Investing and Philanthropic Impact
According to relevant industry findings, approximately one-third of the surveyed
family offices have more than 10% of their investment portfolios allocated to
sustainable investments. This is
registering a steady annual growth, with investments in climate transition, agriculture
and food being the most prominent. The
scale of impact investing is also expanding in the next five years. Separately, a report published by the Global
Impact Investing Network (“GIIN”) suggests that the size of the global impact
investing market reached nearly US$1.2 trillion in 2022. This indicates that while currently taking up
a relatively small proportion of family offices’ investments, impact investing is
demonstrating a clear upward trend.
Families are encouraging their next generation to engage in philanthropy
and plan for the succession of family charitable endeavours, and
the new-generation of asset owners is increasingly looking to family offices to
maximise investment returns while promoting social and community inclusion. The HKAWL will hence explore how to
incorporate impact investing and philanthropic
initiatives into the overall wealth management framework, and convene
networking events seeking to highlight the transformative power of using wealth
for social betterment and foster dialogues concerning philanthropy and impact
investing. We expect the
HKAWL to impart the needed knowledge and skills to the industry and families, enabling their informed decision making and contribution
to society through philanthropic endeavours and impact investment.
Art Development
Hong Kong is a vibrant city with a business and cultural environment
closely observing global trends, rendering it a unique hub for cultural
exchange between the East and the West. Besides
investing in financial products, family offices are also active supporters and
investors of cultural and art development. The HKAWL plans to organise a series of art related
activities next year, which will not only provide family offices with unique opportunities
for cultural appreciation and investment in art and cultural activities, but
will also draw the attention of family offices around the world to the thriving
art ecosystem in Hong Kong.
Networking and Communication
One of the primary objectives of establishing the HKAWL is to create a
communication platform for family offices and asset owners to share experience
and industry best practices widely, thereby developing a lively ecosystem for
family offices. In addition to organising
knowledge-sharing activities such as seminars and
workshops, the HKAWL will conduct
a wealth management related conference in the first quarter next year to
inspire more exchanges in the industry.
Since the announcement on the setting
up of the HKAWL, the industry’s positive feedback has been encouraging. Many family offices, next-generation asset
owners, the financial services industry and practitioners have proactively
reached out to the FSDC to obtain more information on the work of the HKAWL. Meanwhile, the HKAWL’s Board of Directors and
Advisory Board bring together elites and experts from the financial services
industry, academia and regulatory bodies to advise on the HKAWL’s future
programmes and to ensure its strategies are in line with the latest industry
developments.
The Government fully recognises
the importance of building a sustainable ecosystem for the family office sector
in Hong Kong. The HKAWL is established
to promote ongoing knowledge exchanges, idea sharing and networking between the
industry and next-generation asset owners. Facing a global audience around the world, the
HKAWL will provide engagement opportunities and talent development services to the
industry and next-generation asset owners.
Through facilitating dialogues, coordinating initiatives, representing
collective interests, as well as constructive interactions with InvestHK’s
dedicated FamilyOfficeHK team and Network of Family Office Service Providers, the HKAWL is
expected to help nurture a more cohesive industry ecosystem and develop Hong Kong
as the premier location for family offices to set up a business.
Looking ahead, following the successful “Wealth for Good in Hong Kong
Summit” held in March this year, the Financial Services and the Treasury Bureau
and InvestHK are making active preparations for conducting the second Summit
themed “Growing with Certainty Amid Growing Uncertainty” in late March next
year. We look forward to engaging and
collaborating with the decision makers and professional teams of family offices
around the globe, and showcasing Hong Kong’s unique opportunities.
14 Nov 2023