Jersey Finance publishes new Chinese wealth research

Thursday 22 June 2017

New research published by Jersey Finance has identified key challenges facing wealth management practitioners supporting wealthy investors and families in China with their succession planning needs.

Reflecting the views of wealth management and professional services practitioners working across Greater China, Hong Kong and Singapore, the research highlighted that high net worth (HNW) and ultra-high net worth (UHNW) individuals in Mainland China are failing to address a number of challenges which could cause longer-term pressures on their succession plans.

In particular, the research identified a failure amongst clients to approach succession planning as part of a holistic strategy, misunderstanding the solutions available to them, and misinterpreting what it means to cede control of assets:

• Nearly half of respondents (47%) said legacy planning is the key consideration for Mainland Chinese families, but 41% of respondents say family disputes are most likely to derail estate/succession planning.
• Nearly two thirds (59%) say misconceptions about issues and solutions are a top factor holding them back with wealth transition. 
• A large proportion of respondents (88%) say the biggest misconception Chinese families have with wealth structuring is a loss of control.

The research concluded that financial advisers should be targeting the next generation, many of whom have been educated overseas and who tend to be more understanding that wealth preservation goes beyond investing assets and should be part of developing an overall business succession. 

In line with this, advisers need to be aware of and comply with new global standards on regulation. Changes include the implementation of the Common Reporting Standard (CRS) and amendments to individual income tax laws and possible estate duty, as well as reforms to immigration programmes and property ownership taxation rules.

Pictured: Geoff Cook, CEO of Jersey Finance

Geoff Cook, CEO of Jersey Finance said: “We commissioned this report to help inform and illustrate how Jersey’s expertise can support the changing needs of and challenges faced by investors in the Far East. It builds on our growing suite of thought leadership materials, particularly the ‘Internationalisation of Chinese Wealth’ paper we launched last year, whilst our Roadshow events, which we have been staging in key centres in the region since 2014, gave us a fantastic opportunity to showcase these latest findings.”

“Succession planning is a thorny issue that can sometimes take years for a wealthy individual and their family to address, even though it is one that will not go away. In recent years there has been an explosive growth in the understanding of wealth structuring and transition among China’s HNWs, which has led to an increased demand for the services of wealth management practitioners. As a consequence, Jersey has seen an increased demand from those practitioners for the full suite of wealth management services needed to serve the unique needs of Chinese wealthy individuals and to capitalise on market opportunities.”

The complete findings of “How to service Chinese wealth as it goes global” are available here.