Text size

Wealth planners as holistic navigators: Morgan Stanley

Listen to article

This is a sponsored article from Morgan Stanley.

Susanna Fung
Head of Asset Planning Group (Asia)
Morgan Stanley Private Wealth Management Asia

The private wealth management industry is seeing changes in the wealth planning needs and priorities of HNW families. Morgan Stanley explains to Asian Private Banker how these changes affect the key roles of private banks.

Susanna Fung, head of asset planning group, Morgan Stanley Private Wealth Management Asia, has been in the industry for nearly 20 years. Her team works with external professionals to help set up appropriate wealth planning structures for family office clients.

Due to the impact of the pandemic and global uncertainties, Morgan Stanley has observed a shift in priorities of wealth planning needs, with HNW families becoming more proactive than before in seeking wealth planning solutions. The first generation is starting to plan its wealth transfer planning to next generations earlier than before.

“Many of our clients have increasing awareness about the needs of their family — in terms of legacy planning, asset protection or tax planning. This observation has helped us to have efficient and constructive conversations with clients,” Fung noted.

Private banks in a “navigator” role

Wealth planning used to be seen as a supplementary value-added service by private banks, and it is encouraging that wealth planning is now becoming a point of focus for HNW families. Private banks, Fung asserted, will take on more like a “navigator” role for these families by adopting a holistic wealth management strategy.

“Clients are keen on receiving from us comprehensive and neutral advice,” Fung said. “We hope to see that our future position is really like a “navigator”, by which we are able to provide clients with overall, all-rounded, and all-encompassing wealth management strategies.” To achieve this, Fung said that private banks have to prepare themselves to react to uncertainties in the market.

Morgan Stanley believes that the next generation and future leaders should begin thinking about their future wealth planning needs earlier. “When we’re talking about planning, we always recommend that clients should do it earlier rather than later,” Fung said.

Growing importance of future family leaders

The younger generation may lack comprehensive wealth management knowledge and may need education from a wealth management perspective — something which private banks can provide. Fung said that families too can help pass on knowledge, such as managing investments, to the second generation.

Geopolitical challenges have prompted families to prioritise wealth planning. “That’s a true fact that we’ve observed: the family is pushing earlier for succession planning — the timely transfer of its business legacy to the second generation,” Fung explained.

Importance of full compliance with regulations

Changes in tax regulations and information transparency globally are equally leading to families to be better aware of the importance of tax compliance in their strategy for wealth allocation. Fung said that her team at Morgan Stanley works with clients’ independent advisors to establish appropriate and tax compliant wealth planning structures for the clients, regardless of whether it concerns a family office in Hong Kong or Singapore.

High net worth families become globalised with family members having tax residency of different jurisdictions. It is of utmost important for families to ensure that their legacy planning is fully compliant with relevant legal and tax regulations of applicable jurisdictions. “When we encounter a family with potential tax issues, we can introduce the appropriate type of professional firms who can provide independent advice to the clients,” Fung said. “We should draw clients’ attention to the importance of risk management and legal and tax compliance. Clients should be fully aware of the need and advantages to work with their own independent advisors to come up with tax compliant wealth planning structures. Wealth planners have to work together with these external professionals to make sure all the wealth planning structures are set up in the proper way.”

Global regulatory environment is becoming more stringent and transparent. Banks will not and cannot be aiding and abetting tax evasion. Wealth planners stay vigilant on potential tax issues when providing wealth planning services to clients.

Important information and qualifications: This article has been prepared solely for informational purposes and do not constitute an offer to buy or sell any securities or instruments or to participate in any particular trading strategy. The information contained herein is not intended, and should not be construed, as legal, tax, regulatory or accounting advice. You are responsible for making your own investment decisions after having given due consideration to your own financial circumstances, investment experience and investment objectives and you should consult your own legal, tax, regulatory or accounting advisors as you believe necessary.

This is a sponsored article from Morgan Stanley.