Creating a family legacy: managing the burgeoning wealth in Asia
UBS highlights the need for family offices and structures amid the rapid rise of Apac wealth
THE Asia-Pacific region has generated the lion’s share of global wealth in recent years, making it the centre of intergenerational wealth transfer in the years to come.
Growth of wealth in Asia-Pacific has outpaced the rest of the world, according to the UBS global wealth report 2024. APAC wealth was up by 177 per cent since the first global wealth report in 2008.
The wealth of APAC’s billionaires also soared 141 per cent over the last 10 years, according to the UBS 2024 billionaire ambitions report.
With the rapid rise of wealth in Asia, families are increasingly seeing the need to create structures that can manage their wealth across generations, geographies and motivations.
Over the years, UBS notes an increase in the number of Asian business families setting up their family offices in APAC. In Singapore alone, the number of family offices grew from 400 in 2020 to more than 2,000 in 2024.
LH Koh, head of global family and institutional wealth APAC, UBS Global Wealth Management, notes that three in five APAC billionaires have a relationship with UBS and close to 80 per cent of APAC billionaires are self-made.
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He says: “Our unique Global Family and Institutional Wealth Unit is well positioned to understand this key client segment and provide them with a fully integrated platform where their personal, family and institutional needs are optimally met altogether.”
This comes as family offices can perform many roles, ranging from investment management to legacy planning, says Tan Lay Peng, head of family advisory and the Family Office Competence Centre South-east Asia, UBS Global Wealth Management.
Q: Why should Asian families set up family offices?
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Koh: APAC is home to 981 billionaires, or 40 per cent of the world’s total billionaire population, making it the region with the largest number of billionaires globally.
In our 2024 billionaire ambitions report, we estimate that US$6.3 trillion will be transferred over the next 15 years, from billionaires aged 70 or more.
Family offices can be a key differentiator when it becomes the main family vehicle for overseeing the affairs of the family.
Many family offices are set-up to manage investments. When this is done in a professionalised manner with good investment process and governance, wealth is often protected and grows to support future generations.
Tan: A family office can perform many roles beyond investment management.
This includes administering the family’s wealth and business structures, accounting, legal and administrative services, tax planning, nurturing the next generation, managing private property, as well as organising the family’s philanthropic activities.
At UBS, we help our clients to define the strategy for the family office, set up investment processes and governance, and run curated programmes such as Family Office Dialogues, Family Office Labs and Family Office Academy.
Later this year, we will be running more Next Gen programmes with the Family Office Academy.
Q: How does UBS support wealthy families with intergenerational wealth transfer, especially those with diverse businesses and assets, as well as family members in different countries?
Tan: Planning for legacy goes beyond bank accounts, stocks and other investments.
It is critical to create a framework for the family to collectively engage with each other, to make decisions together, and to create a pathway for the rising generation to be mentored and groomed.
Our Family Advisory and Wealth Planning team work alongside our clients to help family members put together the most efficient structures to hold assets and family governance framework with the goal of enhancing communication and transparency. The main objective is to provide a compass for future decision making in the family.
UBS also conducts programmes to prepare its next-generation clients. For example, the bank hosted the children of UHNW clients in Switzerland for the Global Rising Investor Programme and in Singapore for the UBS Leadership Excellence and Development Series Certification Programme.
This exclusive education programme not only imparts foundational financial knowledge and business expertise, it also helps the next generation find their roles in their family enterprises as future leaders and stewards of financial wealth.
Q: How do APAC family offices intend to invest over the next five years?
Koh: APAC family offices remain keen on diversifying their portfolios, as their primary purpose is to preserve, protect and grow family legacy investments so they can benefit multiple generations.
Portfolios are moving back to a greater balance between bonds and equities, with APAC family offices keen on adding more developed markets fixed income and equities.
In the next five years, these family offices also plan to increase their allocation in private equity, private debt and hedge funds, while generative artificial intelligence is likely the most popular investment theme.
Geographically, family offices plan to shift more capital to North America – where they already have the highest allocations – as well as to APAC.
Almost half of APAC family offices plan to allocate more assets to APAC over the next five years, with APAC set to be the top investment hotspot globally.
Meanwhile, family offices are finding opportunities for active management, amid rapid technological change, shifting rate expectations, uneven growth, and the increased dispersion of returns.
Q: Many APAC family offices are making an impact through philanthropy in a systemic way. How does the UBS Philanthropy Advisory team help embed impact investing into portfolios to deliver sustainable outcomes?
Tan: Families are becoming more strategic in the way they create impact, recognising that there are many pathways other than giving money or making grants.
UBS helps families organise their giving with a clear strategy and support the setting-up of structures including donor-advised funds.
We also share knowledge and best practices, provide access to programmes vetted by our team of experts from UBS Optimus Foundation, manage funds designated for philanthropy to sustain giving, and connect philanthropists through events and UBS Collectives.
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