As Asia is the world’s newest and fastest-growing region for wealth planning, the report provides useful insight into its differences from more established international financial centres, as well as fresh input into the debate on Hong Kong versus Singapore as rival centres of private client wealth management.

The methodology follows the original ‘Offshore Evolution’ report, modified in subsequent studies for UK and Canadian practitioners. In each case, the format involves conducting individual telephone interviews with a group of thought leaders who seeded themes with their personal views on the future, resulting in overall predictions for the industry. STEP East Asia members then offered their opinion on these predictions in an online survey.

In the Asian project, 19 predictions were made under four headings: regulation and macro-impacts, clients, business management, and products and services. Each of them was accompanied by a selection of unattributed comments made by the leadership group.

STEP members strongly support the prediction that the number of regulatory initiatives to increase tax compliance in Asia will rise. However, the membership accepted that tax is not the major driver of demand for trust structures in Asia. Members are less certain that Hong Kong and Singapore will continue to take divergent paths in wealth planning and believe their regulatory regimes will converge.

There is further uncertainty surrounding the prediction that the People’s Republic of China (PRC) is several decades away from making an impact on the wealth planning industry. This prompted strong disagreement in the survey, which was inconsistent with most of the thought leaders’ earlier comments about the PRC’s immediate impact.

Predictions about clients were one of the most highly supported, with members overwhelmingly concurring clients will remain very sensitive to fees, and unique in seeking strong control over their assets. There was also firm acknowledgment that clients are becoming increasingly aware of the need for tax compliance and that the lack of fiduciary and legal talent is, and will continue to be, a major constraint on the growth of the trust and estate industry in Asia.

While practitioners agree that new wealth planning business in Asia will continue to be private-banker-driven, they also said external perceptions of Asia as a low-cost financial centre are inaccurate. It was agreed that banks will continue to be the primary providers of investment services and will continue to have major competitive advantages in Asian wealth planning, but that independent asset-management boutiques will increase their share of the investment services market.

Another prediction was that Hong Kong and Singapore will remain primarily offshore-focused in wealth planning, and trusts in Asia will continue to be used mostly for asset protection. The expectation that Singapore will be the dominant centre for private client trust services in Asia was supported overall, but there was a big difference in support when the answers were filtered for the jurisdiction the respondent practised in. Perhaps not surprisingly, those from Singapore agreed strongly, whereas those from Hong Kong disagreed strongly. A similar jurisdictional split occurred over the prediction that private wealth management in Hong Kong will remain focused on corporate structures.

Finally, there was generally support for the notion that the widespread use of private trust companies is consistent with a healthy wealth planning industry.

This collaboration between STEP Hong Kong, STEP Singapore and STEP Worldwide is part of the ongoing STEP Worldwide Council ‘Five Futures’ initiative for the continuous development of the Society’s knowledge of members and private client markets globally. The project will continue to expand, covering further regions and giving valuable insight into the thoughts of STEP members about the future of trust and estate business worldwide.

All reports are online at www.step.org/publications