Family Offices Must Be Ready When Opportunities Knock
Author: Kenneth Ho, Vice Chairman, Family Office Association Hong Kong
The launch of the long-awaited cross-boundary Wealth Management Connect (WMC) Scheme and Southbound Trading under Bond Connect in September marks another milestone in Hong Kong’s progressive development as an international financial centre, further strengthening the city’s status as a world-leading wealth and asset management hub.
By all standards, the landmark WMC scheme is a boost to the Guangdong-Hong Kong-Macau Greater Bay Area (GBA), a major breakthrough that will enable eligible residents from 11 cities to invest across borders through the closed-loop funds flow channel and choose from a diverse selection of wealth management products. As of mid-October, 19 banks have been approved by the Hong Kong Monetary Authority to sell WMC investment products.
Founded on Hong Kong’s admirable strengths in financial and professional services, and following the footsteps of the success of the Hong Kong-Shanghai Stock Connect and Hong Kong-Shenzhen Stock Connect, the latest cross-border investment schemes are highly consequential and signal the further liberalisation of Mainland China’s capital markets.
Hong Kong has long served as the gateway for capital and investments flowing in and out of Mainland China, a role further enhanced through its integration with the rest of GBA, one of China’s leading economic powerhouse and home to more than 70 million people. With a gross domestic product (GDP) greater than South Korea, the GBA is already one of the wealthiest bay areas in the world, and is the ideal testing ground for innovative approaches that will ultimately achieve greater financial connectivity between China and the rest of the world. The successful implementation and execution of the latest initiatives will have a profound impact on the wealth and asset management industry not just within the GBA and China, but across the globe.
As an independent trade association and consultative industry body for Hong Kong’s family office industry, it is essential for us to identify, examine, and capitalise on the opportunities that could advance the industry’s growth and development. Ahead of the WMC’s launch, FOAHK conducted a proprietary survey on the views of over 400 professionals across the wealth and asset management, family office, banking, professional services, and private equity sectors in Hong Kong.
The survey found that 64% of respondents from the wealth and management sector believe Hong Kong is the regional family office hub in Asia Pacific. It also revealed that an overwhelming 96% of respondents agree WMC will give Hong Kong a comparative advantage in growing the city’s private wealth and family office sector. Within the family office sector, 63% said their business would benefit from the launch of WMC with increased revenue.
Overall, we are pleased to discover that the family office sector, as well as the wider financial and professional services industry in Hong Kong, recognise the vast potential and opportunities from the further opening up of Mainland China’s capital markets. The expected intensification of cross-border investment and capital flows from the deepening and widening of mutual access between the financial markets of the Mainland and Hong Kong will further energise the city’s thriving family office industry. The industry must be primed and ready to grasp the emerging opportunities that originate within the proximity of the GBA as well as those from beyond.
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