What are the 3 main challenges faced by family offices in Hong Kong?

Almost 50% of APAC family offices are headquartered in Hong Kong and Singapore.

Establishing a family office in Hong Kong, which is considered a growing hub, still comes with several challenges.

Amongst these challenges that family offices in Hong Kong face include complex and time-consuming regulatory compliance related to investment management and financial reporting, according to Preqin.

Jim Kwok, Vice Chair of the Family Office Association Hong Kong, however, said the government’s recent policy statements on developing family office businesses in Hong Kong will allow the city to “facilitate the industry by simplifying the rules and offering comprehensive support measures.”

Family offices in the city also struggle with attracting and retaining top talent.

Kwok said family offices may not be able “to offer compensation packages that are as competitive as those offered by larger financial institutions.”

“However, there are other factors that may make family offices more appealing to potential employees, such as the opportunity to learn about the family office industry, which is growing rapidly in Asia and globally, and to work for a mission-driven organization that aligns with the values and goals of the family,” Kwok added. 

Apart from talent retention and regulations, family offices are also faced with multiple other individual challenges at the organizational level. 

“They need to achieve a balance between risk and return while ensuring intergenerational wealth transfer. They also need to establish effective governance mechanisms that align investment choices with the family's vision and values,” Kwok said.

“They have to prepare for succession and continuity of the family office's leadership and management, especially when there is no clear succession plan, which is common for some newly wealthy families,” he added.

Kwok, however, said that family offices in the city can address these challenges by accessing customized wealth-management solutions and using advanced technologies.

“They need to plan and implement their strategies carefully to ensure their ongoing success in the dynamic market,” he said,