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Wealth Management For The Asian Super-Rich

SEPTEMBER 12, 2016 RUSS ALAN PRINCE , BRETT VAN BORTEL

In recent years, the numbers and wealth of the super-rich (those with a net worth of $500
million or more) have grown most prominently in Asia. This region has thus given wealth
managersrunning the spectrum from private bankers to multifamily ocestremendous
opportunities to build substantial advisory practices.
But even if the possibilities are astounding, there are also numerous obstacles to success.
Wealth managers seeking to do business with individuals in this region need to recognize a
number of key client characteristics and preferences. Lets consider three segments of the
Asian super-rich:
Business Owners
Irrespective of geography, most extreme wealth creation is tightly tied to very successful
businesses. This is certainly true of great personal fortunes in Asia. Moreover, most of these
Asian tycoons are presently managing their businesses with the intent of growing them.
This will lead them to rms that can provide structured nance. While that expertise is not a
necessity, it can be an important rst step in connecting a wealth manager to a rich family.
Once a relationship has been established, such wealth managers are well positioned to
provide additional services and products. This need is transforming some of the traditional
private banks operating in the region into private/investment banks.
Discretionary investment managementthe cornerstone oering for many wealth
managers elsewhereis often only a small part of the relationship with wealthy Asian
clients, since much of their wealth is already wrapped up in their businesses. Instead,
advanced planning that strongly focuses on tax mitigation is much more meaningful to
them.
The most appealing tax services will address their present day business dealings and crossborder activity, such as jurisdictional arbitrage strategies. In addition, wealthy Asian clients
often have extensive international holdings, and some of them are concerned about political
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and economic stability. So an array of wealth protection services is also very appealing.
Many ultra-wealthy Asian clients are digital natives, so wealth managers must be adept at
communicating with them that way. They want immediate access to information, including
the status of their holdings. But though technology plays a big role, they still need personal
interactions with skilled, high-touch, knowledgeable relationship managers. The careful
blending of high-tech and high-touch is critical.
Women
While men dominate the ranks of the super-rich, women are joining this cohort at a greater
pace, and the percentage of new female billionaires exceeds those of male billionaires as
female entrepreneurs emerge in Asia. These women, like all the ultra-wealthy, exhibit a
number of core characteristics: They all have high levels of self-ecacya strong
conviction in their own ability to achieve their goals. They understand and are quite adept at
strategic networking. They are quite accomplished negotiators.
They often have to work harder and many times smarter than men to amass extreme
wealth. Having gone down this track, they are usually motivated to continue enlarging their
personal fortunes.
But women also tend to think about the purposes of their wealth, and think about how they
can use it to positively impact society.
Whats interesting is a trend in which these women have moved away from the traditional
wealth management rms and opted instead for creating their own single-family oces.
Their primary motivation, the same as mens, is to ensure they are in control. And its
common for these single-family oces to strategically outsource expertise, with keen
attention to cost/value trade-osso they will often rely heavily on external wealth
management rms.

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When it comes to their single-family oces, self-made Asian super-rich women will regularly
do their homework and will be very tough negotiators. They will bring the same mind set,
talents and capabilities that have made their business endeavors so successful to the
establishment and oversight of their single-family oces.
NextGen
Despite the preponderance of rst-generation new money, there are quite a number of
multigenerational families that have created incredible personal fortunes. In established
families, the children or grandchildren of the wealth creators (depending on when the family
fortunes were initially founded) are commonly not very happy or enthralled with the way
their predecessors managed the family fortunes.
Thus, they are disinclined to see old, well-worn relationships with their parents or
grandparents advisors as particularly worthwhile, unless those professionals are
demonstrating that their services and products are exceptional. But often, the previous
generations advisors will be discarded in favor of more sophisticated and responsive
professionals. Thats also a motivation behind these families creation of single-family oces.
The increased mobility of the Asian super-rich, especially of younger generations, coupled
with the fact that they are interacting with one another more and more, allows them to do a
lot of sharing. Many of them do lunch together, often with the assistance of a facilitator
and selected experts, informally, perhaps while attending events such as the World
Economic Forum.
As a result, the next generation wealthy are again turning to the idea of a well-run family
oce as a way of maintaining the preferred levels of control, strategically outsourcing tasks
and maximizing their relationships with external experts, just as super-rich women are.
Thus, talented wealth managers who are able to connect with these single-family oces can
become extremely successful.
Conclusions
Given the opportunities, the competition is intense. More and more wealth managers and
other professionals are trying to build highly protable businesses by working with this
cohort. And as single-family oces emerge, the level of competition is only going to
increase.
As with all the super-rich the world over, one of the biggest problems is gaining access to the
decision makers. The optimal way to connect with them is through referrals from other
highly regarded professionals. If you are recognized as one of the best of the best for a
particular expertise, product or service, it can contribute greatly to your gaining access and
winning them over. This stature regularly goes to wealth managers who are recognized
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industry thought leaders.

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