A survey launched by Jersey Finance in Hong Kong this week finds that Asian investors are in search of transparency in tax and regulatory compliance instead of secrecy.
Jersey Finance’s research report, The future for International Financial Centres – Views from Asia’s Wealth Management Market, highlights tax compliance as one of the highest priorities for Asian high-net-worth individuals (HNWI) and ultra- high-net-worth individuals (UHNWI) when considering an overseas structure.
The research finds this is driven by a number of recent global and local regulations, relating to disclosure and cross-border exchange of data.
The survey, conducted by Jersey Finance and Asian-focused financial publisher Hubbis, was launched in Hong Kong on Wednesday and focuses on Asia’s wealth management community’s view on the future for offshore structures, as well as key motivations and barriers of HNWI and UHNWI when considering their investment options.
According to the research, most respondents believe their clients in Asia are looking for better structures to adapt to the new global regulatory rules and compliance conventions, such as the Common Reporting Standard and FATCA:
• More than 46 per cent of respondents believe succession planning is the key motivator for selecting an IFC for Asia’s HNWI and UHNWI, with jurisdictional and asset diversification the second biggest driver (22 per cent).
• Only four per cent believe their clients are searching for privacy and confidentiality.
• Some 89 per cent of respondents said their Asian clients are fully aware they need to address issues relating to transparency, tax and existing structures.
• However, 80 per cent of respondents think Asian clients are not well prepared for wealth transition from one generation to another.
Despite this, the findings also show that younger generations, those in their 20s to early 40s, are far more globalised and increasingly appreciate the importance of transparent wealth preservation and planning.
Additionally, half of those surveyed indicated that Chinese HNWI families will adapt 'slowly and painfully', largely because many are only recently mobilising their wealth and families into a more globalised context.
Geoff Cook, CEO of Jersey Finance said: “Chinese HNWI and ultra-HNWI clients have been looking for new wealth management options, especially cross-border solutions, to diversify, protect and grow their wealth for some years.
“In the face of a more sophisticated Asian market, practitioners and IFCs need to clearly show their quality of service, depth of expertise and consistency of advice to match the dynamic client needs. In particular, there is a clear opportunity for Jersey to provide some vital leadership with its forward-thinking approach to compliance with international regulations, which sets it apart from the competition.”
• The complete findings of The future for International Financial Centres – Views from Asia’s Wealth Management Market are available here