Designing Tailored Wealth and Succession Planning Solutions for Asia’s Private Clients

Lee Sleight is Head of Business Development for Asia at Lombard International Assurance, based in Luxembourg. After 18 years with the firm, he was appointed to his current role in early 2019 and is responsible for designing tailored private wealth and succession planning solutions, working closely with Asia-focused distributors and partners who cater to the specific needs of UHNW clients and their families to protect their assets, ensure liquidity and to help pass on their legacies smoothly to future generations. Lee’s core focus is on the bespoke Private Placement Life Insurance (PPLI) offering. Hubbis met with him recently to learn more of the firm, the products, and the expansion plans for Asia.

Lee has been in Luxembourg for 21 years and that is where he plans to stay, at least for the time being. “We really enjoy life here and I thoroughly enjoy working with this firm – after all I joined more than 18 years ago,” he reports.

Lee has over 20 years’ experience in the wealth assurance industry across Europe, Asia and Latin America. He joined Lombard International Assurance in 2004, and was soon leading the European Complex Case Structuring Team, where he built a unique track record, working in partnership with advisors to global UHNW families to offer mostly PPLI based solutions catering for their increasingly sophisticated wealth and succession planning needs.

Driving the PPLI message worldwide

Lombard International Assurance’s core product today is indeed PPLI, or unit-linked life insurance as it is known in Europe. “It is an ideal estate planning tool for wealthy and UHNW clients to preserve the wealth they have, and as a succession planning tool to then pass it on to the next generations,” he reports. “It effectively works like a trust, it can work alongside a trust, and it can work with offshore companies. Most importantly, it gives the clients a bit more peace of mind whilst benefiting from tax deferral. And I have been focusing my effort on bringing greater awareness of this solution to the Asian market for Asian clients, working with wealth management experts across the region.”

He reports that the firm has had three decades of success with PPLI in Europe and also Latin America and that interest is clearly rising for the solution in Asia. “It is a good time for us to be really ratcheting up the effort,” he says. “Despite the difficulty of meeting face to face with partners, we are making good headway.”

Global solutions

A well-devised marketing brochure on the firm and on the appeals of PPLI describes Lombard International Assurance as an independent, global wealth solutions provider with deep local market knowledge, providing what they describe as “first-class and customised solutions” to help individuals secure their assets, ensuring they are protected, portable and can be passed on to heirs and beneficiaries.

“For 30-plus years we have specialised in creating customised and portable wealth solutions that can consolidate the widest universe of assets whilst meeting risk, tax and regulatory requirements,” Lee explains. “At the end of June 2021, we administered more than USD65 billion of our clients’ assets, working with over 200 custodian banks and over 900 investment managers, serving more than 20 markets across Asia, Europe, Latin America and the United States. Our unique expertise involves being able to provide multi-jurisdictional wealth planning solutions on a global basis with a deep understanding of local cultures and attitudes through our team of more than 60 experts in wealth structuring, law and non-traditional assets based around the world.”

A truly bespoke structure

He highlights the firm’s expertise in handling non-traditional assets, leveraging the skills of a team of 14 in Luxembourg. “And we offer more than a simple, generic solution,” he reports.

“A key to our PPLI solutions is portability, as people need the flexibility to retain their solutions and structures even if they move jurisdictions, part-time or full-time. This is an extra string to our bow in Asia, where we know there is vast and growing private wealth, and where the wealthier clients are looking for a broader range of solutions.”

He concedes that Universal Life remains quite dominant in Asia, but that both the clients and the advisory community is more aware of a variety of other structures that might be better suited to their particular needs and hopes.

Many advantages

However, he says PPLI has many advantages. He explains it is a very transparent structure from a fee perspective, and it is an ideal long-term planning tool that can be passed on from one generation to the next. “It is not only about covering the mortality aspects, but about how you transit that wealth through the generations,” he says. “PPLI suits ideally, especially nowadays, as there is a major transition taking place towards more sophisticated wealth planning and structuring solutions. PPLI also works well alongside existing structures. Asia is catching on to the trend, hence demand for PPLI is expanding, and we are working closely with our partners to help them educate the market and their end-clients of the advantages.”

Portability and flexibility

“Portability is really essential, especially for the wealthier expatriate community, who might have made their wealth in Asia and then want to spend some or all of their time later in Europe or perhaps the US,” he reports. “The optionality and compliant portability that PPLI offers is a major attraction.”

Lee also observes that although there has been an increasing interest in Asia around life solutions in general, the market is not as mature compared to Europe.

“Essentially, sophisticated life solutions remain more of a specialist market in Asia, so there is a huge amount of education required,” he says. “PPLI, for example, is very much a buzzword in the region today. Moreover, we all know how wealth transition between the generations is in an incredibly important phase in Asia nowadays, as literally trillions of dollars will move from the older to younger generations.”

“PPLI is an ideal tool for effecting that transition; it is not the only solution, but it is certainly one of the most practical and valuable tools, and as the advisory community boosts its offering in the region, this is a great tool to offer their clients. For those that genuinely understand its structure and advantages, they will know they have a very valid, transparent and easy to understand solution, with significant cost benefits.”

Open architecture

Lee mines down a bit further into some key advantages of PPLI over alternative solutions, noting that PPLI accommodates a far wider range of assets, it is ‘open architecture’ to the extent that it can house existing or preferred asset managers, and existing or preferred banks within the structure, all of which is particularly valuable for both parties that have, presumably, established their relationships over many years.

Maintaining relationships

“If an EAM or private banker has spent years building a relationship and gathering AUM, they might be somewhat reluctant to trade that off for a UL or VUL policy, even if they might earn significant commissions from that particular deal,” he explains. “So PPLI can accommodate more flexibility and continuity of relationships as well as providing optimal solutions for many clients.”

Key Priorities in Asia

Lee heads up business development for Asia and his number one mission is to develop the distribution network in the region and get the brokers the firm works with on board and up to speed. These are both the ‘big’ names and the more boutique operators.

“The bigger brokers have the bigger institutional relationships, the smaller boutique brokers have the specialist relationships with the external asset managers, more of which have been competing in the market as more bankers leave the private banks,” Lee explains. “As a rule of thumb, if the referral is from a bank, that generally tends to be much more straightforward assets that are held, whereas referrals from EAMs, corporate service providers or law firms tend to require bespoke tailoring.”

Secondly, and of course this is closely connected to the first goal, Lee wants to help to expand education and raise awareness of how PPLI can be used, and boost understanding of the structure and its advantages. “We are getting our name out and about, joining in virtual events, enhancing our marketing and brochures and communication, and it is all coming together pretty well so far,” he reports. “Another priority is of course to keep our fingers crossed that travel restrictions will lift, and we can meet distributors face-to-face before too long.”

A global firm for a global world

He closes the conversation by remarking just how multinational and multi-cultural a firm Lombard International Assurance is today. “We have 40-plus different nationalities here, we cover a huge array of languages, and as such not only is it an interesting and engaging place to work, even after all my years here, but more importantly, we can engage across so many different types of clients and nationalities and offer a genuinely multinational style of approach. And that is ideal for developing business in Asia, where there is such diversity amongst the clients and the advisory community at large.”

Getting Personal

Lee hails from Bracknell just west of London and he went on to study at university in Portsmouth, graduating in Business and German. “As part of that course, I spent a year working in Bavaria, and that is what really got me started on every job that I've had up until now,” he explains. “I have lived in Germany for the last 16 years, actually, and we have three teenage children who are all German nationals. The little village we live in is Mannebach, which is just over the Luxembourg border, and is home to about 300 people, who are outnumbered by many more cows and horses.”

He says life in Germany is good and the relationships he and the family have formed with the local community are deep and enduring. “Trust is not easily given here,” he says, “but it is lasting, and we have built close and enduring relationships for life.”

Lee is also a keen trail runner and triathlete. “I like to swim, cycle and I do an awesome amount of running, which is a great way of dealing I guess with stress and switching your mind off,” he reports. “I go out, I run and see how far I can push myself. In fact, the last time I was in Hong Kong, I foolishly volunteered for a race on Lantau Island. I thought it's Hong Kong, it will be flat, it will be fine. But, oh my goodness, jetlag, massive humidity and over 50 kilometres of hilly running, it was brutal. But it was also great, and I saw how truly beautiful the Hong Kong islands are, and how amazingly rural and wild. Such a contrast to Hong Kong city itself.”

He says that he has also taken German nationality. “I think I qualify,” he quips, “as we also have our own orchard, and we even made our own schnapps last year!