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RBC’s HK clients shop abroad for wealth planning

RBC’s HK clients shop abroad for wealth planning

The head of private wealth for Royal Bank of Canada’s (RBC) Greater China wealth management operations is seeing a growing need for international wealth planning from the Hong Kong client base.

Iggy Chong, who has been with the Canadian bank since 2014, has noticed rising levels of sophistication of client needs as Hong Kong’s wealthy families pursue international diversification and mobility.

‘North America has consistently been a key destination for our clients’ investment and migration interests,’ he told Citywire Asia, adding that many Hong Kong clients already have a nexus in Canada and the US.

The wave of initial public offerings in China, spurred by technology start-ups and patriarchs selling off businesses, is also boosting RBC’s wealth planning business in Hong Kong.

EY data shows that Hong Kong’s main market and growth enterprise market was the busiest exchange globally in the first quarter of 2018, with 57 IPOs amounting to $3.1 billion.

‘Through our trust colleagues in Hong Kong and the British Isles we are able to help clients with pre-IPO planning, as well as with investment solutions,’ Chong said.

However, the structuring and  succession planning needs of clients are as complex as they are diverse, Chong noted.

‘For example the different provinces in Canada have different treatments of assets when there is a succession event so specific regional solutions may be needed,’ he said.

This plays into RBC’s strengths, the Hong Kong-based executive said, because of the bank’s network of trust and estate practitioners in Canada, the US and the British Isles.

RBC is the largest wealth manager in Canada and has $113 billion in assets under administration. In 2015, the bank acquired City National Corporation and merged it with the US wealth management unit, pushing the number of financial advisors in the combined unit to 2,100.

Chong has also found a reduction in the use of multi-jurisdictional structures. Many high net worth individuals in the region are simplifying their company and trust structures in light of global tax transparency rules, such as the Common Reporting Standards.

As a result, there is growing demand for single jurisdiction solutions across US, Canada, Channel Islands and Hong Kong, he noted.

Unfortunately, not many families in Hong Kong, where RBC has over $6 billion in assets under management, have it all mapped out like octogenarian billionaire Li Ka-shing.

Back in 2010, clashes in the family-owned Sun Hung Kai Properties led to the ouster of the chairman and CEO Walter Kwok from Hong Kong’s largest property developer.

More recently, the Lo family has been locked in bitter battle over the estate of property tycoon Lo Ying-shek, who co-founded Great Eagle Company with his wife, Lo To Lee Kwan.

There is an increasing number of disputes arising among families when the wealthy older generation passes away, Chong said.

‘The high profile examples are indicative of a broader issue among Hong Kong’s HNW [high net worth] families where some are not undertaking adequate planning and discussions around the transfer of wealth from one generation to the next,’ he noted.

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