HSBC Private Banking helps families navigate the intricacies of succession planning
HSBC Private Banking Head in Southeast Asia, Mr Philip Kunz, sees the private bank like glue binding together different parts of the banking giant.
"In HBSC, I feel we have a strong trifecta. Our longevity in Asia, means we have the depth in understanding cultural norms among families in the region, we have the breadth of solutions to support them and their businesses, and we have the global reach to understand wealth best-practice from around the world," explains Mr Kunz who re-joined in November last year.
Team effort behind every family
The bank's teamwork approach is important when it comes to embracing families, understanding their intricacies, and finding solutions for them.
"There is very seldom one solution that works for every client. Each family has their own dynamics, especially when adding in a family business to the mix," explains Mr Kunz.
In safeguarding family wealth as it passes between generations, clients are provided with a panel of experts. A Relationship Manager oversees all of their wealth management needs and a dedicated Investment Counsellor, along with product specialists, provide tailored investment advisory support.
When it comes to succession planning, Wealth Planners broker difficult but often necessary conversations on wealth transfer and help to formalise these plans, while Trust Relationship Managers execute and administer trusts.
Binding families closer together
Through interacting with different generations of families, the views and opinions that come forth can be very diverse.
However, in the Asian culture - where the younger generation often defers to the older one out of respect - such differing views might not be expressed in the presence of older family members.
An area of strength for the business is the knowledge gained over decades in helping families tackle the really difficult conversations.
"We will often be the sounding board to different family members, receiving their perspectives on the family's wealth direction in a way that may not be shared freely with other family members. We understand this a unique and privileged role to hold and we treat it with respect. It also means we can help mediate between the first and the second generation," says Ms Michelle Lau, Head of Private Wealth Solutions, Southeast Asia, HSBC Private Banking.
"One way to broker it is by establishing a family constitution. These are essentially charters that dictate how family wealth or business will be managed over the long term, and is akin to the DNA of the family. It's about how we embed the software into the hardware," she explains. "Discussions on preserving a loved one's legacy can be very powerful tools for bringing a family together."
Philanthropy serves as another example. The younger generation often has a different approach from the older generation, with many choosing to eschew the usual route of simply donating money to a charity in favour of setting up a social enterprise.
"Given that families are ever-changing, succession plans are not something that can be ironed out and then locked in the drawer for good," continues Ms Lau.
"Somebody takes over the business, new grandkids come along. You will need to review and look at that."
Readying Next Gen leaders
"Preparing the next generation of family business leaders takes time and preparation. Increasingly if 'Next Gen' want to lead, they have to take ownership and prove themselves. It's also a role of substantial responsibility to take the helm as a family custodian. There are expectations to uphold like family values and traditions," says Ms Lau.
In April, HSBC Private Banking's global flagship, Next Generation Programme, now in its 15th year was hosted in Singapore. Invited to the three day event were next generation participants from ultra high net worth families across the world. The programme covered a range of topics from family business and succession, philanthropic and sustainability best practices to investment planning. While you could assume that 'Next Generation' simply means second generation, for some of the family members in attendance they were third or even fourth generation clients readying to take the lead. It also gave them an opportunity to network, explore their future roles as family and/or community leader, and share their own personal experiences with each other.
Commitment to Singapore
Having one of the oldest and most established trust administration businesses in Asia puts HSBC Private Banking in good stead to support the growing wealth and inter-generational needs of families in Singapore and across Southeast Asia.
"We've been in the trust and estate planning business in Singapore for more than 70 years," says Ms Lau. "We've been administering family plans, some now for a few generations, and had gone through that transition with them."
Agreeing, Mr Kunz adds: "What we try to do is facilitate or moderate such conversations. By putting the different voices in the same room, clients often discover there is more common ground in their views than differences.
This is the role we play extremely well, to be the facilitator and help them find the right solutions."
Looking ahead, the banking veteran is optimistic about the outlook for HSBC Private Banking, and the wider HSBC group, given growing wealth in Southeast Asia as well as increasing activity as China executes its Belt and Road strategy.
As many more businesses come to Singapore and the region, the pool of wealthy individuals is also expanding. "I don't think there's another financial institution globally that is better positioned than us to capture all of that and bring the benefits to our clients. Ultimately, 'client first' is our focus and everything we do should delight them on a daily basis."
360 Degree Impact - The Next Generation Mantra