A Holis­tic Ap­proach

Af­flu­ent fam­i­lies turn to HSBC Pri­vate Bank to guide their phil­an­thropic ac­tiv­i­ties as well as ad­vise their in­vest­ments

Hong Kong Tatler - - Tatler Focus Hsbc -

HSBC has been a leader in suc­ces­sion plan­ning for wealthy fam­ily busi­nesses in Hong Kong for more than sev­enty years. Dur­ing those seven decades it has also de­vel­oped close re­la­tion­ships with many char­i­ties through­out Asia.

HSBC Pri­vate Bank now man­ages over US$ 1 bil­lion of as­sets in more than 100 char­i­ta­ble trusts in Hong Kong. And last year, the Pri­vate Bank and its high- net- worth clients do­nated HK$ 234 mil­lion, which almost matched the HK$ 273 mil­lion of the Com­mu­nity Chest of Hong Kong.

“The great­est in­crease in wealth has been in Asia, where there are now more billionaires than in the US,” says Bernard Ren­nell, re­gional head of Global Pri­vate Bank­ing, Asia- Pa­cific and global head of Pri­vate Wealth So­lu­tions at HSBC Pri­vate Bank. “For many in the re­gion, this new wealth comes with a grow­ing sense of re­spon­si­bil­ity to give back to so­ci­ety, and a de­sire for guid­ance on how to make a longer term im­pact.”

Its phil­an­thropic ser­vice thrives in Pri­vate Wealth So­lu­tions, which in­cludes ex­perts re­cruited from non­govern­ment or­gan­i­sa­tions ( NGOS) and mul­ti­lat­eral agen­cies that have deep roots and track records in the re­gion.

A case in point is Cyn­thia D’an­jou- Brown, head of phi­lan­thropy ad­vi­sory, North Asia and fam­ily gov­er­nance ad­vi­sor, Pri­vate Wealth So­lu­tions at HSBC Pri­vate Bank, whose post­grad­u­ate ed­u­ca­tion and train­ing in Canada fo­cused on so­cial work pol­icy and com­mu­nity plan­ning.

“Pri­vate Wealth So­lu­tions of­fers a com­plete ser­vice in con­junc­tion with its clients, pro­vid­ing ex­e­cu­tion, mon­i­tor­ing, man­age­ment and ad­min­is­tra­tion,” she says.

It pro­vides crit­i­cal ad­vice to help clients to iden­tify strate­gic goals, and ap­pro­pri­ate projects for in­di­vid­u­als and fam­ily of­fices to chan­nel their char­i­ta­ble do­na­tions. The eval­u­a­tion process in­cludes on- site meet­ings and then follow- up vis­its to en­sure the funds are spent wisely.

The di­vi­sion also helps clients nav­i­gate their

way through Asia’s mul­ti­juris­dic­tions, which have dif­fer­ent rules that reg­u­late the non- profit sec­tor.

How­ever, HSBC’S phi­lan­thropy ser­vice should not be viewed as an ap­pendage to its wealth man­age­ment of­fer­ing. On the con­trary, it is a fun­da­men­tal part.

It is im­por­tant to un­der­stand that phi­lan­thropy within the re­gion is re­garded by peo­ple as an eth­i­cal and civil duty, and may be an im­por­tant part of their legacy. Un­like in some other coun­tries, char­i­ta­ble do­na­tions are rarely made for tax rea­sons. In­stead, the val­ues of a fam­ily and its business en­ter­prise are of­ten aligned and so phi­lan­thropy be­comes in­te­gral to the business op­er­a­tion through its CSR.

“In fact, first gen­er­a­tion en­trepreneurs gen­er­ally feel a par­tic­u­lar obli­ga­tion to ‘ give- back’ be­cause their fam­i­lies of­ten came from poor or dis­ad­van­taged back­grounds. They are keen to share the re­sults of their hard work and good for­tune,” ex­plains Christo­pher Mar­quis, man­ag­ing di­rec­tor, head of Pri­vate Wealth So­lu­tions, Asia at HSBC Pri­vate Bank.

Fam­ily val­ues

Phi­lan­thropy is also a way for fam­i­lies to build and main­tain unity and har­mony across gen­er­a­tions. The es­tab­lish­ment of the suc­cess­ful com­mer­cial en­ter­prise that gen­er­ated a fam­ily’s wealth would re­quire qual­i­ties such as com­pet­i­tive­ness and tenac­ity, but the pur­suit of phil­an­thropic ac­tiv­i­ties, such as the set­ting up of a char­i­ta­ble foun­da­tion, is more con­ducive to co­op­er­a­tion.

“It cer­tainly re­quires for­ti­tude and clar­ity of mind, but it is less threat­en­ing and so can bind fam­i­lies closer to­gether and main­tain con­ti­nu­ity,” adds Mar­quis.

By ex­am­in­ing suit­able ben­e­fi­cia­ries, help­ing plan the process for do­na­tions and then mon­i­tor­ing its ef­fi­cacy, chil­dren learn about col­lec­tive decision- mak­ing, con­flict res­o­lu­tion, and per­sonal as well as civic re­spon­si­bil­ity.

“They learn im­por­tant so­cial skills at the same time as the fam­ily bond through par­tic­i­pa­tion in a shared jour­ney. It is a tan­gi­ble mech­a­nism for re­in­forc­ing and sus­tain­ing shared val­ues that in­still co­he­sion and dif­fuse con­flict,” says D’an­jou- Brown.

Equally im­por­tant, for phi­lan­thropy to be ef­fec­tive it has to be sus­tained over time, so the in­volve­ment of chil­dren is crit­i­cal to en­sure that the ini­tia­tive of the founder has a legacy.

If there is no one left in the fam­ily to run a foun­da­tion then HSBC will un­der­take a fidu­ciary re­spon­si­bil­ity. Mar­quis and D’an­jou Brown sit on a com­mit­tee that has this role.

New trends

In­deed, sus­tain­abil­ity and longevity are es­sen­tial char­ac­ter­is­tics of suc­cess­ful phi­lan­thropy. Dur­ing the past cou­ple of decades phil­an­thropic ac­tiv­i­ties world­wide have evolved rapidly and taken many forms. Straight­for­ward char­i­ta­ble giv­ing re­mains an im­por­tant model, and it ful­fills a key role in pro­vid­ing re­lief for the poor­est in­di­vid­u­als and com­mu­ni­ties, or when dis­as­ters strike.

How­ever, im­pact phi­lan­thropy di­rected at en­ti­ties that can be self- fi­nanc­ing has be­come popular.

Another re­lated trend that D’an­jou- Brown iden­ti­fies is a shift in em­pha­sis from “hard­ware” to “soft­ware”. Rather than fo­cus­ing on build­ing phys­i­cal in­fra­struc­ture, clients are look­ing at how sys­tems - whether for ed­u­ca­tion or health­care for ex­am­ple - can func­tion more ef­fec­tively.

Fam­ily of­fices are well- placed to de­ploy the lo­gis­ti­cal and per­for­mance mea­sure­ment tech­niques that they use in their business en­ter­prises to the not- for- profit sec­tor.

“The common fea­ture of th­ese trends is to tackle the root causes of so­ci­etal prob­lems rather than the symp­toms,” ex­plains Mar­quis. Also, char­ity as an ex­pres­sion of per­sonal val­ues is sig­nif­i­cant, not least be­cause many peo­ple within Asia have more dis­pos­able in­come and fer­til­ity rates in sev­eral coun­tries are de­clin­ing. Th­ese con­di­tions have nur­tured a new breed of so­cial ac­tivists and spe­cial in­ter­est groups.

HSBC helps con­nect donors who share common causes and also acts as part­ners and ad­vo­cates to gov­ern­ment and NGO rep­re­sen­ta­tives for those causes and the con­cerns that un­der­lie them.

In ad­di­tion, as D’an­jouBrown points out, some of the re­gion lacks suf­fi­cient so­cial in­fra­struc­ture. Emer­gent char­i­ties in China, for in­stance, of­ten need as­sis­tance to cre­ate a sus­tain­able op­er­a­tional model in or­der to at­tract fund­ing. HSBC is able to pro­vide this guid­ance and ad­vice.

The role of the Pri­vate Bank is there­fore in­clu­sive of the whole phil­an­thropic process, and its sig­nif­i­cance can only in­crease in Asia as the re­gion be­comes more af­flu­ent.

HSBC Pri­vate Bank is a di­vi­sion of The Hongkong and Shang­hai Bank­ing Cor­po­ra­tion Limited

Cyn­thia D'an­jou-brown, head of phi­lan­thropy ad­vi­sory, North Asia and fam­ily gov­er­nance ad­vi­sor, Pri­vate Wealth So­lu­tions; Christo­pher Mar­quis, man­ag­ing di­rec­tor, head of Pri­vate Wealth So­lu­tions, Asia

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