Secretary for Financial Services & the Treasury Christopher Hui

The Hong Kong Academy for Wealth Legacy (HKAWL), under the Hong Kong Financial Services Development Council (FSDC), will be formally established and hold its inauguration ceremony today to provide a comprehensive talent training platform for the family office sector, asset owners and wealth inheritors, and to facilitate the development of family offices in Hong Kong. At today’s inauguration ceremony, a number of family office representatives and industry experts will discuss the opportunities and development of family offices, and share their insights on the key service areas of the HKAWL.

The establishment of the HKAWL is one of the eight policy measures set out in the Government’s Policy Statement on Developing Family Office Businesses in Hong Kong issued in March this year. These measures aim to create a conducive and competitive environment for the businesses of global family offices and asset owners to thrive in Hong Kong, while strengthening the development of the asset and wealth management business, financial services, and related professional services in Hong Kong.

According to industry estimates, there were over 150,000 ultra-high-net-worth individuals (individuals with investable assets of at least US$30 million) in Asia in 2022, representing one-fourth of the global ultra-high-net-worth population. As of end-2022, Hong Kong’s asset and wealth management business was worth approximately US$3.9 trillion, with US$1,148 billion in assets under management in private banking and private wealth management. As wealth continues to accumulate in Hong Kong and Asia, the next 20 to 30 years will be an important time for family offices to plan for wealth succession.

Apart from such core functions as investment management and tax planning, family offices also shoulder responsibilities in the management of family business, succession planning and training for the next generation, family philanthropy, and education and inheritance of financial management concepts covering social responsibility, sustainable development, etc. Family offices not only assist asset owners in achieving wealth growth and succession goals but also transmit family values to wealth inheritors, playing a vital role in maintaining family values and enhancing family cohesion.

Against this backdrop, we have received strong support from partners including industry associations, professional service providers, universities as well as the dedicated FamilyOfficeHK team of Invest Hong Kong to the establishment of the HKAWL under the FSDC’s institutional framework. The HKAWL will examine in detail diverse topics on wealth management, family governance and intergenerational integration, impact investing and philanthropic impact, as well as art development. The HKAWL will also provide tailored training and networking activities for the family office sector, asset owners and wealth inheritors, with a view to promoting positive financial management values and strengthening the talent pool for family offices.

Family governance and intergenerational integration

Well-established family governance practices and systems have a significant role in preserving family values and unity, not only enabling asset owners’ more efficient wealth allocation and succession but also strengthening family cohesion. This is important to families, particularly first-generation entrepreneurs, in the early stages of the succession cycle. Considering that first-generation entrepreneurs may not have experience in establishing family governance frameworks, the HKAWL will serve as a talent training hub for asset owners and the private wealth management industry, seeking to enhance entrepreneurs’ overall management capability in wealth accumulation and succession, and facilitate their understanding of the best practices and latest industry trends through continuous knowledge exchange, thereby bolstering the sustainable development of the whole family office ecosystem.

Impact investing and philanthropic impact

According to relevant industry findings, approximately one-third of the surveyed family offices have more than 10% of their investment portfolios allocated to sustainable investments. This is registering a steady annual growth, with investments in climate transition, agriculture and food being the most prominent. The scale of impact investing is also expanding in the next five years. Separately, a report published by the Global Impact Investing Network suggests that the size of the global impact investing market reached nearly US$1.2 trillion in 2022. This indicates that while currently taking up a relatively small proportion of family offices’ investments, impact investing is demonstrating a clear upward trend.

Families are encouraging their next generation to engage in philanthropy and plan for the succession of family charitable endeavours, and the new generation of asset owners is increasingly looking to family offices to maximise investment returns while promoting social and community inclusion. The HKAWL will hence explore how to incorporate impact investing and philanthropic initiatives into the overall wealth management framework, and convene networking events seeking to highlight the transformative power of using wealth for social betterment and foster dialogues concerning philanthropy and impact investing. We expect the HKAWL to impart the needed knowledge and skills to the industry and families, enabling their informed decision making and contribution to society through philanthropic endeavours and impact investment.

Art development

Hong Kong is a vibrant city with a business and cultural environment closely observing global trends, rendering it a unique hub for cultural exchange between the East and the West. Besides investing in financial products, family offices are also active supporters and investors of cultural and art development. The HKAWL plans to organise a series of art related activities next year, which will not only provide family offices with unique opportunities for cultural appreciation and investment in art and cultural activities, but will also draw the attention of family offices around the world to the thriving art ecosystem in Hong Kong. 

Networking and communication

One of the primary objectives of establishing the HKAWL is to create a communication platform for family offices and asset owners to share experiences and industry best practices widely, thereby developing a lively ecosystem for family offices. In addition to organising knowledge-sharing activities such as seminars and workshops, the HKAWL will conduct a wealth management-related conference in the first quarter next year to inspire more exchanges in the industry.

Since the announcement on the setting up of the HKAWL, the industry’s positive feedback has been encouraging. Many family offices, next-generation asset owners, the financial services industry and practitioners have proactively reached out to the FSDC to obtain more information on the work of the HKAWL. Meanwhile, the HKAWL’s Board of Directors & Advisory Board bring together elites and experts from the financial services industry, academia and regulatory bodies to advise on the HKAWL’s future programmes and to ensure its strategies are in line with the latest industry developments.

The Government fully recognises the importance of building a sustainable ecosystem for the family office sector in Hong Kong. The HKAWL is established to promote ongoing knowledge exchanges, idea sharing and networking between the industry and next-generation asset owners. Facing a global audience around the world, the HKAWL will provide engagement opportunities and talent development services to the industry and next-generation asset owners. Through facilitating dialogues, co-ordinating initiatives, representing collective interests, as well as constructive interactions with InvestHK’s dedicated FamilyOfficeHK team and Network of Family Office Service Providers, the HKAWL is expected to help nurture a more cohesive industry ecosystem and develop Hong Kong as the premier location for family offices to set up a business.

Looking ahead, following the successful Wealth for Good in Hong Kong Summit held in March this year, the Financial Services & the Treasury Bureau and InvestHK are making active preparations for conducting the second Summit themed “Growing with Certainty Amid Growing Uncertainty” in late March next year. We look forward to engaging and collaborating with the decision makers and professional teams of family offices around the globe, and showcasing Hong Kong’s unique opportunities.

Secretary for Financial Services & the Treasury Christopher Hui wrote this article and posted it on his blog on November 14.