Lombard Odier’s Lee Wong Surveys Asia’s Nextgens and How the Wealth Industry Can Adapt to their Needs and Expectations
Lee Wong, Head of Family Services for Asia at Lombard Odier, based in Singapore, is a well-known authority on wealth and estate planning, and that of course, means she is also an expert on the NextGens and their needs and expectations, as they either inherit more and more of Asia’s vast private wealth or make new wealth themselves. She sat on our April 29 panel of experts for a Hubbis Digital Dialogue on the topic of the needs and expectations of the next generations of Asia’s private clients, and debated how the wealth management industry can adapt its mindset, services, products and technologies to cater to them and retain them as clients for the future. Hubbis has condensed some of her valuable insights into this Q&A report.
Hubbis: A simple question. In the context of our wealth management business, what are the expectations in your view of your next generation (Nextgen) clients?
Lee Wong: We need to recognise what these next generation clients are like today. Many of them are highly educated, they are sophisticated, they are tech-savvy, they are very inquisitive, socially conscious, they value living well, and they value living purposefully. They want to build networks with their peer groups and form communities so as to be able to do things together, and they are sensitive to wealth transfer issues. Accordingly, for a client of this nature, I think what they expect of us is that we are able to address issues relevant to them and provide platforms that meet their needs.
Regarding being sensitive to wealth transfer issues, I often come across next generations who would appreciate us in helping them bridge the gap between the current generation and their generation to help them by facilitating dialogue and to help them have a bigger voice when it comes to family investments or family businesses. They are also eager to participate in our NextGen-focused programmes so that they can foster ties with fellow NextGen members, and lean on our expertise on topics such as entrepreneurship and sustainability, so that they are better prepared when they take over the reins of managing their family wealth.
So, from a Nextgen perspective, I think that is what they expect from wealth managers in order to engage with them better and in relation to the things that we share with them, whether we are proposing a solution or otherwise.
As they are sophisticated, they expect us to explain things to them clearly and concisely. They expect that we know our stuff, to be able to tell them how things work and the consequences and implications of what we are proposing, rather than just giving them a product and expecting them to accept it as it is. So, being as high calibre as they are today, they expect a lot more from their service providers.
Hubbis: How engaged are the Nextgens in the whole discussion around succession, either of the family businesses or family wealth?
Lee Wong: I consider them to be very interested, on the whole. From our perspective at Lombard Odier, the NextGen are often keen to come to the table to engage in succession issues. In fact, we’ve seen more of these dialogue spearheaded by the next generation instead of being initiated by the founder or older generation.
Especially for broader discussions involving family governance matters, the next generation family members tend to be the ones initiating the discussions or expressing a need for more open dialogues and transparency within the family. They are aware that the family may need support in facilitating open discussions on topics such as wealth transfer and succession planning. They feel the urgency to get some of the discussions out of the way because they are conscious that their parents are getting older. Leaving succession points unclear, risks them being ill-prepared for what may be expected of them in relation to management of their family wealth and makes the family vulnerable to conflicts.
Many of them are sensitive to disputes that arise in other families and they are conscious to try to avoid these issues. I have worked with some families where the next generation family members from different branches take the initiative to come together to try to understand one another, as well as, the expectations and aspirations of each branch, with the aim of seeking alignment amongst themselves across the various family branches.
It is a very interesting arena today in that dialogues are coming from different directions. It is clear that they are interested in what is going to happen in relation to their family wealth, their family business and the type of legacy that the family is going to build. They are invested, they are emotionally attached. They would like to make sure that they can do their part and be ready to be able to carry the torch to the next generation.
Hubbis: It sounds complex and complicated, so as a private banker, what is your role, and how does the bank get compensated for the time and effort you so evidently commit?
Lee Wong: What drives me, I guess, is my personal purpose. This area of work, I can honestly say, is my calling. Whatever I can do to support families to do better as a unit makes me feel gratified as an individual and as a professional. I am blessed to be working in an organisation that values this particular area of practice. As a privately-owned bank with a long history, Lombard Odier as an institution has transcended several generations, and this is an area of work that is considered a vital pillar in ensuring that we are able to sustain and anchor our relationships with our clients for generations to come.
My role is to support bankers at Lombard Odier who may find that their clients are facing these issues, and they bring me into the picture to support the relationship. I also get introductions from some families inviting me to help other families they know on certain key issues, so that is naturally positive for our relationships. Often these introductions are directly from next generations who I think want another gentler, more empathetic voice to help them to facilitate some issues within the family. In short, the ability to help people to try to bridge gaps and to bring understanding amongst family members is very gratifying for me. As to how the bank gets compensated for my time and effort, a meaningful relationship with our clients invariably translates into a profitable one. Referrals from our clients is a further testimony of how such time and effort is worthy.
Hubbis: There is anecdotal evidence around the world that family wealth can be lost as the generations roll on. How do you see your role in preventing that type of wealth depletion over the generations in Asia?
Lee Wong: There is an old adage about wealth not being able to survive the transition across generations, which I believe does not hold true nowadays. The challenge is how to grow this wealth beyond the successes and achievements of the previous generations.
Part of the education process is to equip the NextGen with the right skillsets and mindsets to behave like wealth generators at every generation, especially as with every generation, the number of family members are increasing exponentially. Today, we are looking at many families where they have a lot of wealth. To retain it is not so difficult; it is more a question of whether they could grow it beyond its current level to ensure that the family grows from wealth to greater wealth. More importantly, how can we, as wealth managers, support the NextGen so that they don’t simply grow from riches to riches, but from riches to values – to have certain entrepreneurial value systems, to be conscious of their responsibility to society, so that their wealth in itself creates lasting impact, not just for their family and future generation, but to the world at large. In our respective roles in the wealth industry, we should do our part to support these next generation family members to enhance this trend and to promote the concept of wealth as a force for good.
Hubbis: How are you projecting your expertise across the partnerships the bank has developed in this region?
Lee Wong: This is an important area for us. At Lombard Odier, we have built strategic alliances with local domestic banks across the various Asian markets. In Thailand, we have a strategic alliance with Kasikorn Bank. We have an arrangement with Union Bank in the Philippines, with Fubon in Taiwan, and Bank Mandiri in Indonesia. The issue really, in this regard, is whether we believe the next generation family members in these wealthy families prefer to be served by somebody local or somebody from overseas, and there is no straightforward answer.
The proximity of somebody in their home country and who understands their culture is always useful, but to also have someone from another jurisdiction share their knowledge, or to have insights that can widen their perspectives or provide different opportunities, we see this being appreciated by the NextGen. The combination of having the best of both worlds is a unique proposition that we bring to the table.
I have placed a keen focus on the grooming of the next generation over the years, as Hubbis knows well. We have, for example, developed our Lombard Odier NextGen Master Series, which is a series of workshops curated for the next generation community from the wealthy families served by our strategic alliances and us. This ability to bring together a diverse network of next generation members together with our strategic alliances is particularly powerful. They appreciate the platforms that we are able to provide them for peer engagement and opportunities to cross invest or do business with people of a similar profile in various countries that they may otherwise not have the ability or the reach to connect with.
As for the topics that they are interested in, we focus a lot on putting out content that we think will help them in the areas that are important to them. A large part of that centres on issues around being socially conscious, being responsible stewards and being effective entrepreneurs.
Hubbis: Can you offer any tangible, non-name examples of the type of enhanced engagement you have achieved in these areas of late?
Lee Wong: I have delivered several bespoke family workshops lately. I have mentioned earlier about how in some cases next generation family members proactively came together to engage with each other in a more honest and collaborative forum. Another case I worked on involved a lovely family who, on the face of things, appear very closely-knit. However, in the course of the family workshop, we discovered that their differences in their communication and work profiles hindered how they function together as a unit. Their love for each other also got in the way of open dialogues. To be able to facilitate them to adopt a more conducive posture going forward is rewarding.
On a broader note on the point of engagement, it is important to note that it goes beyond reaching out to the next generation, it is more about how you improve your engagement with your clients in general, especially as we are in a world where you are seeing them much less.
We have always been a content-driven organisation with many small events, big events and all kinds of various engagements. In the world as it is today, we are unable to deliver in the way we used to. As part of our rethinking process, we are looking into short videos on topics of interest for clients. In this way, we can deliver thought provoking ideas to clients that can act as a catalyst for a deeper conversation with us. This also requires us to rethink banker training in a suitably effective digital format so that they have sufficient knowledge base to carry through some of the following-on conversations on their own without me going to a meeting with them or being in the country with them.
Hubbis: In one or two short sentences, if there is one brief message you would like to convey on this topic and advice to the HNW, UHNW and other families regarding the Nextgens, what might that be?
Lee Wong: Franklin Roosevelt once said “We may not be able to prepare the future for our children, but we can at least prepare our children for the future”. Many families I come across do a great job in equipping their children with intellectual capital. Where they tend to fall short is in letting go. It is important that we empower the next generation and give them a voice. Allowing them to express their perspective and to follow through on a differentiated point of view, even if it leads to mistakes and failures, is a valuable learning journey that will shape them and build resilience.
More from Lee Wong, Lombard Odier