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14/06/23
HONG KONG: 'Pipeline’ of family offices ready to set up in the city, Financial Secretary Paul Chan says
As published on: scmp.com, Monday 12 June, 2023.
More family offices are “in the pipeline” to set up in Hong Kong, Financial Secretary Paul Chan Mo-po said on Monday, as the city continues to bolster its efforts to attract such corporations with the launch of a service-provider network to help fulfil their needs.
“This year over 200 top-class family-office owners and managers came to Hong Kong [for the Wealth for Good summit in March], and we are pleased to report that you will be seeing some of them located here,” Chan said at a ceremony to mark the launch of the service-provider network, which is one of eight new government initiatives created to develop the city’s family-office ecosystem.
Private banks, accountants, lawyers and trust companies are part of the network.
“This particular network is very important to us,” said Chan. “We believe it is important to the [wealth-management] industry because it brings together professional service providers doing mutual business referrals.”
Chief Executive John Lee Ka-chiu set a goal last year to attract 200 new family offices, which wealthy families use to manage their portfolios, to the city by 2025. To help achieve this, the government announced a slew of measures aimed at persuading high-net-worth families during the Wealth for Good summit.
The initiatives include a revamped investment-migration scheme that will count yuan-denominated assets, as well as the creation of art-storage facilities at Hong Kong’s airport.
Hong Kong has a sophisticated and vibrant financial ecosystem and is the “natural location of choice” for family offices, Chan said.
The government’s target of attracting 200 family offices is “very challenging”, said Jason Fong Chin-kong, global head of family offices at InvestHK, a government agency that promotes the city as an international financial centre. He has full confidence the city can reach the goal, he added.
While generational transfer of wealth is the main priority of family offices, the UBS Global 2023 report showed that many such firms do not have the necessary processes, governance or risk management in place.
When it comes to accessing professional services for wealth management, globally only 42 per cent of family offices have a wealth-succession plan, with the same percentage having a governance framework. Smaller family offices with assets of US$100 million to US$250 million are especially likely to fall short of best practices in these areas.
The service-provider network will serve as a two-way channel to communicate with the industry on the latest developments and opportunities for family offices in Hong Kong, said Fong, as well as to mobilise service providers around the globe to advocate for opportunities in and via Hong Kong for family offices.
“The network’s mission is to help develop the family-office ecosystem, and promote Hong Kong as a leading global hub and a preferred destination for family offices,” Fong said.
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Hong Kong Family Office
