The benefits of PPLI for private clients in Asia

Video transcript

1. What are the biggest challenges you face when talking about PPLI?

One of the biggest challenges is actually understanding what PPLI may be. How does that sit alongside the other solutions that may be available in the market? In particular, in Asia, we see universal life, we see variable universal life used alongside PPLI, and talked about in the same sentence. But do advisors, do bankers, do the wealth advisors, really understand the difference between those products? Quite often, when we are asked how about how PPLI works, we're given a fixed fact - can you make PPLI work for this client? And I’d take a step back and say, "not just understanding the solution, but also understanding the family themselves, how does that family's needs, how do they match up with what the solution is that you're putting together, what are their needs, what's the family situation, where are the family members, what are the types of assets you're talking about?" Understanding that client, and the client’s family needs on a much wider basis allows you to put the planning in place, and see where PPLI can help, or where it can be enhanced and maybe used with other structures that the client may have. But without the fundamental understanding of what the offering is alongside what the family situation is, their needs and objectives, it's very difficult to match the two up.

2. Why should a private client engage this structure?

Private Placement Life Insurance is internationally recognised. It can be used for clients that are here in Asia, for clients that are looking to relocate, or for clients that have family members that may be elsewhere outside their country of residence - maybe they're living in Europe, for example. It's a very portable solution. It works well, is recognised internationally, it allows clients to put planning in place for them in Asia today. And if they or family members move internationally, then they can take that with them with minimal change. It provides many advantages. Yes, tax may be a bigger driver for our clients in Europe, where they're looking to put tax efficient planning in place. In Asia, it's more about succession planning. It's more about that protection of assets, how do they pass that wealth on from one generation to the next? Putting in place a transparent structure - which clients can easily understand - is one of the ways that we can combine their needs with the PPLI features.

3. What assets can be included within the structure?

PPLI is a very broad structure. It can hold a number of assets, from plain bankable assets through to private equity. We can look at more offshore assets, subject to due diligence. It gives the clients the ability to take existing assets that they may have and place them in a structure as part of their succession planning. It's really a case of going back to the points I made earlier in the conversation about understanding your client's needs, their objectives. And what they have and what they're looking to pass on. If you can look at those, understand the client's assets, you can see how that can be matched up with their planning needs.

4. How would you explain the opportunity that Asia represents to you?

Building upon our success that we've had throughout Europe and many of the markets we've had, where we've been established for 20 to 30 years, providing PPLI solutions, we know that this works. We know that it's effective for many ultra-high net worth families, the way to pass the wealth on, to protect that wealth, preserve it, and pass on to the next generations - that's no different to the way that it will be applied here in Asia. There's a massive wealth transfer that's going to happen. It is happening at this point in time. It is the solution that I personally believe is a very effective and efficient way to put the structure in place today to pass that wealth on to the next generation. Wealthy families in Europe, wealthy families in Latin America, wealthy families in the US and in Asia, they all have the same needs.

5. What type of clients should be interested and how do they access this opportunity?

We are working through a number of different distribution channels. We're working very closely with many of the international and local brokers in Hong Kong, and also in Singapore. We work with a number of our European partners and Swiss partners, as well. All of those that manage wealth, that are wealth advisors, that are looking after these types of clients, we are trying to educate them, bring their awareness on what PPLI is, as we've talked about already, how it can help and how it can feature as part of their client's planning for wealth preservation and wealth transfer on. To wealth advisors, anybody who's looking after this type of client, it would be relevant for them to consider this and see how that could feature within what they have planned for the family, what structures they have in place already, are these structures fit for purpose, can they be enhanced? It's really about understanding the solution as we've talked about today, and seeing how this can be factored into the planning that you're putting together for the client. Anybody who is advising wealthy clients, wealthy individuals, whether it be Asia focused / Asia based, it should be considered as part of their toolkit, alongside the other solutions that they already have available and are familiar with.