HSBC: Top Three Risks for Wealthy Families in Asia
A report by the private banking arm of HSBC outlined the top three risks that Asia’s wealthy families face, which include overconcentration in a single sector.
HSBC has launched a report entitled «Wealth in Asia: The Next Challenge,» which is part of a new monthly «Global Wealth Focus» series aimed at illustrating how the instincts of families in the region that led to previous success may not be suitable for achieving success in the next era.
According to the report, there are three key risks among Asian families. First, there is concentration risk with lack of diversification and excessive exposure to sectors and geographies that generated wealth. Second, there is preservation risk with a single founder remaining as a primary decision-maker in many cases. Third, there is inheritance risk with many heirs still outside the decision-making circle and unprepared to manage the family’s wealth or legacy.
«We’re seeing extraordinary growth in private capital across Asia – but much of it is still closely tied to single sectors, currencies or markets,» commented Lok Yim, HSBC’s APAC head of global private banking.
«That level of conviction can deliver remarkable returns, but it also means these portfolios are more exposed when the environment changes. The challenge now is helping families scale from success stories into structures that can absorb complexity and risk.»
