Labuan International Business and Financial Centre (Labuan IBFC), a special economic zone located off the north west coast of Borneo, Malaysia, hosted a lively roundtable debate on the future of wealth management in Singapore recently.
Titled “ASEAN Wealth Management: From Creation to Preservation”, industry experts touched on a range of topics from the changing attitudes and aspirations of the current generation of high net-worth individuals (HNWIs) to growing efforts in tackling tax evasion in the region.
Expert panellists included Ms Ee Lin Chan, Adjunct Professor of Finance at Singapore Management University; Mr David Chong, Founder & Chairman of the Portcullis Group; Mr Zac Lucas, Partner, Wragge Lawrence Graham & Co LLP; and Ms Farah Jaafar-Crossby, Director of Market Intelligence, Labuan IBFC, and was well attended by over 25 industry professionals from the private banking, wealth management, financial advisory, trust and estate planning sectors.
Among the topics discussed was the need to recognise the evolving wealth management needs of family businesses across the region, taking into account first to third generation mind-sets and experiences as well as cultural differences in ASEAN. Some discussion centred on the emerging generation of HNWIs and how they tend to be savvier than previous generations with a more ‘Western’ outlook.
In addition the panel discussed the ramifications of the Common Reporting Standard coming online, and how these new protocols will change the face of global wealth management.
Participants also debated a recent research finding by the Economic Intelligence Unit which showed that 58% of family-owned businesses in Singapore were looking into legacy planning, compared to 78% in Indonesia.
The Labuan IBFC commissioned survey went further to show that only 35% here had established formal wealth management structures such as private foundations while 41% had set up trusts to manage inter-generational wealth transfer.
“Singapore could be seen as a safe environment with minimal political and financial risks, so families here may not recognise a pressing need for formal structures in legacy planning compared to other ASEAN countries like Thailand and Indonesia.” explained Ms Jaafar-Crossby.
Looking into the horizon, attendees considered the impact of the implementation of the Automatic Exchange of Information (AEOI) Standard, an international agreement to share information with foreign tax authorities. Together with over 90 jurisdictions, Singapore has agreed to implement the agreementin 2018. There was a consensus at the roundtable discussion that the wealth management community needs greater understanding of the AEOI and that Singapore is in a strong position to lead the way in embracing it.
“The explosive development of ASEAN’s economies has led to the emergence of a new generation of wealthy individuals with new attitudes and approaches to wealth management. While there is continued interest in wealth creation in this region, there has also been increased attention on the need for legacy planning and wealth preservation. We hope this event served as a useful platform for industry
professionals to gain different perspectives on these trends and issues,” said Mr Danial Mah Abdullah, Deputy Director-General of the Labuan Financial Services Authority and Interim Chief Executive Officer at Labuan IBFC.
The roundtable is part of a series of industry events hosted by Labuan IBFC in Singapore and the region. The upcoming Singapore instalment of its ASEAN roadshow on 11 September will be focused on how Labuan IBFC best serves the needs of companies and private investors looking to establish a foothold in the region.
Labuan IBFC recently reported growth across all financial sectors in 2014, including banking, insurance, leasing, wealth management and Islamic finance, with 12.3 percent increase in new company registrations last year compared to the previous year.
