Trust and Succession

While many family business owners invest significant resources in growing their businesses, HSBC Private Bank also supports those families in the transition of wealth over multiple generations

HSBC Private Bank’s strength in Asia lies in its proud heritage, a commitment to understanding the needs of its clients and its ability to provide a comprehensive product and service offering by looking at clients’ portfolios holistically. The range and depth of its expertise, augmented by a constant awareness of new trends and developments, means that HSBC Private Bank is well placed to meet the demands of the region’s growing family wealth.

A key differentiator for the bank is its substantial investment in wealth and succession planning, including business succession and family governance. Its expertise in this area is reflected in its preeminent market share and has been acknowledged with several industry accolades.

“We aim to be the private bank of choice for business owners and leaders, entrepreneurs and their families throughout Asia, by offering industry-leading banking, investment and wealth planning solutions to help our clients preserve, manage and grow their wealth over the longer term,” says Bernard Rennell, regional head of global private banking, Asia-pacific and global head of family governance and family enterprise succession at HSBC Private Bank.

The bank takes a coordinated and systematic approach to identifying its clients’ specific personal and corporate needs, which is supported by extensive global commercial banking and capital markets capabilities.

The HSBC Group’s presence on 60 trading floors throughout the world ensures best order execution. Its top-rated research teams are renowned for their strength in emerging markets. The group’s transaction banking and trade finance activities in multiple currencies, including a central role in offshore renminbi flows, means that the private bank can not only offer its clients tailored investment advice, it can also deliver on its recommendations.

“The private bank provides bespoke solutions to our clients and facilitates introductions across the entire HSBC Group, connecting them to opportunities to build their wealth,” says Rennell.

The appetite for managed investments in Asia is continually growing for structured products, traditional funds, and discretionary wealth management services. Alternative investments, especially, have attracted tremendous interest among both institutional and private clients during the past decade.

Management consulting firm Mckinsey calculates that the compound annual growth rate of alternative investments rose at twice the rate of traditional investments between 2005 and 2013. An allocation to alternatives such as infrastructure or property offers diversification opportunities and improves a portfolio’s volatility.

“Alternative investments have become more transparent and thus more attractive to investors in Asia,” says Rennell.

As the private banking industry matures in Asia Pacific, HSBC continues to build on its legacy in the region that stretches back to 1865. Given the recent changes in the regulatory environment facing the industry, implementing the highest global standards of financial crime compliance and knowing its customers, enhancing risk management controls, supporting tax transparency, and simplifying processes remain top priorities for HSBC Private Bank.

A major focus for HSBC Private Bank is to help its clients in the transition from wealth creation to wealth management including the transfer of intergenerational wealth.

The significance of this emphasis will become increasingly apparent. According to international consulting firm BCG, the region is expected to make up more than one-third of global wealth by 2018, with its private wealth forecast to reach US$76.9 trillion.

“There are real concerns amongst Asian clients, many of whom have built their wealth in recent decades, about the transfer of this wealth to the next generation. For these first-generation wealthy entrepreneurs, the family business complicates succession planning. Many clients have shared that while they invest a significant amount of time and resources in building their businesses, they feel unprepared when considering the transition of wealth to future generations,” says Rennell. “But, through our capabilities in wealth structuring, succession planning, family governance and philanthropic services, we can support and guide clients in the preservation of their family wealth.”

HSBC Private Bank recently hosted its flagship Family Enterprise Forum in Singapore, where it gathered clients from around the region to discuss “managing the business of the family”. They were able to engage candidly with internal and external experts, as well as each other, about the importance of proper family governance and succession planning, the impact of family values, philanthropy, impact investing and corporate sustainability in the context of the family business.

“We have unparalleled depth in resources and expertise in succession planning and this, coupled with intimate knowledge of our clients, has helped us to earn their trust as demonstrated by their continued patronage through multiple generations,” says Rennell.

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