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Morning Studio editors

[Sponsored article]
Wealthy families are facing significant succession planning challenges. Over the next 20 years, the world will experience the greatest transfer of wealth in history, with US$84.4 trillion expected to pass down to younger generations in the US alone, according to market intelligence firm Cerulli Associates. But this younger generation will have goals and desires that are different from the previous generation, and that means the transfer of wealth might not always be smooth.
According to the “UBS Global Family Office Report 2023”, while the main purpose of Asia-Pacific family offices is generational wealth transfer, most have yet to develop a succession plan for family members.
“From our experience and research, the challenges families usually face during wealth transfer include the first generation worrying about the competence of successors, and generations having different passions,” says Amy Lo, chairman of global wealth management Asia, head and chief executive, UBS Hong Kong.
This is where private banks such as UBS come in. By advising clients about areas such as building a governance framework, formalising engagement principles and engaging the next generation, UBS’s family advisory teams in Hong Kong and Singapore help clients work through generational gaps to meet their succession planning needs. The bank’s family advisory services effectively address how entrepreneurs can manage their wealth professionally through a family office, providing the appropriate framework to help them establish a robust family governance system. With a holistic family strategy in place, UBS helps its clients leave a lasting legacy for future generations.
As well as ensuring practical aspects such as governance frameworks are in place, the bank also focuses on the aspirations of future generations. With that in mind, UBS was presenting partner for the recent Family Business Summit 2023, co-organised by Blue Pool Capital and the South China Morning Post, and hosting more than 100 family office owners and managers who discussed ways of building sustainable family generational wealth. The bank also arranges for clients to meet with like-minded peers at events such as the Global Philanthropy Forum, Legacy Forum, UBS Disruptive Technology CEO Summit and Art Basel.

Asia’s house bank
According to the UBS report, there is a trend among family offices in Asia to allocate funds to alternative financial areas – private equity and direct investments in particular. Almost three-quarters of those likely to increase their private equity investments over three to five years expect private equity to outperform public markets. At present, family offices in Asia have the highest allocation to equities (37 per cent), and almost half (46 per cent) use hedge funds as a portfolio diversifier. Globally, UBS manages more than US$5 trillion in client assets.
“Our clients’ needs are multifaceted,” Lo says. “We realised we should identify these clients according to their needs rather than their invested assets with us.” This is one reason why UBS formed its Global Family and Institutional Wealth (GFIW) unit last year – bringing its global family office, unified global markets, global lending unit, prime brokerage and private markets one-bank partnership under one umbrella. This one-bank approach lets clients leverage UBS’s holistic capabilities across a diverse range of business areas.
The GFIW unit takes a needs-based client service model approach, and serves these clients with multiple capabilities beyond the Global Wealth Management platform. It improves flexibility while promoting global connectivity and collaboration towards better outcomes for clients. Lo views GFIW as a natural evolution of UBS’s Global Family Office, transforming the services offered by the bank.

“With GFIW, we are able to focus on our top-tier clients who have institutional or cross-divisional needs, to leverage our resources across divisions to deliver seamless one-bank capabilities,” she says. “In Asia, most of our clients are entrepreneurs. They are focused on their business growth and wealth creation – and GFIW can bring together solutions across the bank and across the globe to meet their needs.”
Lo adds: “Our goal is to be the house bank for these GFIW clients. This unique model will provide the client with coverage, opportunities and execution they cannot get anywhere else.”
Driving philanthropy for family offices
Family offices are increasingly not just about managing wealth, but also building a legacy through philanthropy. Asian families have been seizing philanthropic opportunities by engaging with UBS, despite many already having their own foundations or donation channels. “They really want to do something more sustainable and, through partnering with us, they can maximise their impact,” Lo says.
Facilitating this is the UBS Optimus Foundation – the bank’s in-house team comprising 130 experts around the world, focusing on areas such as children’s health, education and protection, as well as the environment.
“These experts focus on programmes that are evidence-based with scalable solutions. Our main goal is to help families minimise negative outcomes and maximise impact at scale,” Lo says, adding that administrative fees are borne by the bank.
Last year, the foundation raised US$274 million in philanthropic capital, including UBS’s matching of contributions, to have a positive impact on the lives of 5.9 million people worldwide.

As diverse and complex as many of Asia’s family offices are, Lo believes philanthropy can play a key role in succession planning – and family values are often the place to start when planning for the future. “Philanthropy can also teach the next generation fundamental lessons about the family’s values,” Lo says. “By engaging in philanthropy as a family together, it helps create a family legacy, instil family values and strengthen family bonds. It benefits both the family and society as a whole.”


How UBS is building a ‘house bank’ to protect family wealth across Asia

Asia’s ‘house bank’

UBS Hong Kong

UBS was the presenting partner for the recent Family Business Summit 2023 held in Hong Kong. Photo: Shutterstock

UBS helps its clients make connections at events such as Art Basel Hong Kong. Photo: Elson Li / SCMP

 Amy Lo, chairman of global wealth management Asia, head and chief executive, UBS Hong Kong. Photo: SCMP

Amy Lo (third right), chairman of global wealth management Asia, head and chief executive, UBS Hong Kong, at the launch of the bank’s Optimus Foundation Hong Kong. Photo: UBS 

Business

Banking & Finance

The bank’s Global Family and Institutional Wealth unit offers a needs-based client service model that brings its suite of global capabilities to one platform
Through hosting events and building communities, UBS aims to connect like-minded investors in areas such as philanthropy, art and technology


The bank’s Global Family and Institutional Wealth unit brings its global capabilities to one platform, as UBS aims to connect clients with investors in areas such as philanthropy, art and technology.


Wealth management

Morning Studio