Melanie Ison, Director of Nerine Trust in Hong Kong,
considers the distinctive priorities of Asian high-net-worth
individuals and why Guernsey is equipped to meet their
Asia Pacific is second only to North America in terms of the
number of high-net-worth individuals (HNWIs) in the region.
By 2018, it is expected to hold more than one-third of global
wealth, with its private wealth forecast to reach USD76.9
trillion.1 The opportunities for private client service providers
in Asia are abundant. Over the years, Asian clients have been
naturally drawn to the services of jurisdictions like the BVI and
the Cayman Islands, partly due to the flexibility of their
legislation compared to options closer to home.
Both Singapore and Hong Kong took a long time to modernise their
trust laws, which are based on a template from Victorian England.
Hong Kong, for example, did not update its own trust law until late
2013. Even then, like Singapore before it, it took a conservative
approach, choosing not to incorporate many of the features Asian
HNWIs seek. As a result, clients continue to look to other
jurisdictions for wealth-management solutions. Those clients are
increasingly looking beyond the perceived advantage of lower
pricing in the Caribbean and recognising the compelling proposition
of jurisdictions like Guernsey.
What, then, are these increasingly sophisticated clients looking
for when selecting a trust company and executing business?
RELATIONSHIPS ARE IMPORTANT
Asian business relationships are based on continuity and trust
over generations. Robust family office structures are frequently
sought for long-term succession planning.
Asian private clients are increasingly global in their outlook,
with family and business connections throughout the world. Service
providers must reflect that global reach and work across multiple
jurisdictions. Guernsey has responded to this need with a clear
commitment to the region, demonstrated by the establishment of a
Guernsey Finance office in Shanghai, as well as several businesses
headquartered in Guernsey establishing dedicated offices in Asia,
such as Nerine with its Hong Kong office.
This provides excellent support for Asian private clients in
their own time zone. Equally, Guernsey's location gives access
to time zones in key markets from east to west. Combined with a
high level of pragmatic regulation and a long-established
professional infrastructure, this means Guernsey is a jurisdiction
in which Asian clients can have confidence when seeking a trusted
FLEXIBILITY AND ADAPTABILITY
Asian HNWIs want solutions and providers that can stand the test
of time and yet remain innovative and adapt to the global pace of
change. Asian private clients often have complex and dynamic family
situations, underpinned by a culture quite different to that in the
west. They require bespoke and integrated solutions that reflect
their way of doing things, rather than a product-led approach.
This solution-driven approach is very much part of
Guernsey's DNA. The industry has always worked with private
clients to offer bespoke solutions, and this means it is well
placed to serve the needs of the region. Innovative and up-to-date
legislation, which is more flexible than the regional offering,
enhances Guernsey's proposition and allows the industry to
continually evolve. Pioneering image rights legislation and the
Guernsey foundations law are two such recent developments.
The ability to have disenfranchised and enfranchised
beneficiaries and a high level of control under Guernsey's
foundations law is particularly attractive for Asian families, as
is access to specialist administrators, ongoing legal support and
favourable tax treatment.
These attributes, in addition to sophisticated fund
administration experience, complex insurance and banking expertise,
and high-calibre lawyers, mean Guernsey's offering is
compelling. Great service is as important in Asia as anywhere but,
to succeed in the region, you also need to demonstrate empathy for
the culture, a keen focus on high standards, and an ability to
innovate. Guernsey is very well placed to do so.
An original version of this article was first published
by theSTEP Journal, July 2015.
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