Wealth management is a consultation service that combines other financial services to cater to the needs of affluent clients. It is a consultative process whereby the advisor gleans information about the client’s wants and tailors a bespoke strategy utilising appropriate financial and wealth management structures and services. Wealth managers are connoisseurs who deal with personal wealth planning concerns of affluent clients. Most individuals get confused between investment bankers and wealth managers and deemed these two designations for the same job, although the two cater to completely different domains. An individual with an investment banking career manages corporate clients, and on the other hand, a wealth manager’s sole emphasis is to offer consultation to the affluent clients in wealth preservation and succession planning.

Check out the following wealth management trends :-

1. A Changed Outlook of Investors

The perceptions, notions and set expectations of the investors are transforming with time. Now investors require detailed advice prior to making any decisions related to their finances. The current generation is more careful and tend to have more belief in their peers’ insights. The heavily IT-dependent generation relies on the availability of information on the internet which has altered and shifted the way people perceive investments to a great extent. The generation today believes in taking strategical risks, to learn and grow from the pitfalls – either via a simple investment or portfolio with diversification.

2. Substantial Quantity of Data

The volume of consumer data has a significant role in the industry, and the data is rapidly developing in wealth management. Technology in many ways is simplifying and easing the jobs of the managers.  With the introduction of zettabytes, it has become quite effortless for wealth managers to keep, systemise, and evaluate data. Major wealth management companies invest millions in analytics software to properly comprehend the clients and handle the operations. Some firms also opt for easy MIS systems such as client acquisition, business performance management, and supervision to provide adequate information successfully.

3. Perplexity in Dealing with Retirement

The key question for all investors is if they will be able to survive through the course of their investments or not? Even though this is a sensitive and tough concern, nonetheless, wealth managers have to cater to it efficiently. They need to deal with the idea of risk and loss including to keep motivating their clients to strategise and conserve. Retirement planning has an important effect on investment gains. Wealth managers is required to address their client’s retirement planning at all levels of life irrespective of age as it is less tricky to guide investors of good habits prior to the time of retirement comes.

4. Transformation in Wealth and Varying Advisors

The development of talented advisors is important to meet the demanding in the wealth management space especially the growth of the affluent community has increased and shall keep increasing over the years. The existing experienced wealth consultants are not easy to substitute owing to their lifetime of experience managing a lot of portfolios. Several of them are at the retirement age, hence the new generation has to strive harder to learn and take over to serve the clients efficiently. Such change in management is and always has been a prospective concern for wealth management firms.

5. Three Lows and Two Highs Plague Investments

With several alterations in the economic surroundings, the finance sector has a varying investment ambience now. New investors consider the three lows and two highs, which signifies to a lesser sense of investment course in these investors.

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These two highs and three lows are:

• Low inflation rate
• Low interest rate
• Low economic development
• High financial leverage
• High volatility

Therefore, financial consultants have to address perplexed investors and lead them to improved investment yields.

6. Increasing Competition

The economy globally is experiencing an appalling financial crisis owing to Covid-19, and the competition in the wealth management industry has essentially risen as an outcome. New firms are emerging in the market, and business frameworks are experiencing transformation too. Currently, a lot of firms strive to attain the same clients in an ever-shrinking reservoir, being another ground breaking trend this year.

Labuan Foundation

Labuan IBFC is the only common law offshore and low-tax jurisdiction in Asia Pacific that offers both offshore private trust and foundation as effective tools for the purpose of wealth preservation and succession planning.

Both trust and foundation have many characteristics alike. Both have stakeholders and both vehicles can prevail in perpetuity. Where a trust has a settlor with reserved powers, a foundation has a founder who can have rights reserved to him over the management of the foundation; a trust has a trustee, a foundation has a council and officers; a trust has a trust deed but a foundation is regulated by a charter, that states the objectives or intents and articles which offer a set of comprehensive rules on its administration; a trust is not a legal entity however a foundation is a registered, legal entity.

In the event of liabilities, trustees have endless liability in regard of the trust, however a foundation’s administrators and the founder who adhere with the needs of the charter and articles are not personally liable for the debts of the foundation. The liability of a foundation is confined to the worth or its net assets. Labuan IBFC is a highly regulated and safe domicile for high net worth individuals or families to set up a trust or foundation. The integration of retention of management control, addressing confidentiality concerns, and the versatility offered sum up to an opportunity like no other!

Regardless you live in the Asian region or in another continent, Labuan Foundation is popular and favoured as it is governed and regulated by the Labuan Financial Services Authority with its Labuan Foundation Act 2010. Presently, 21 jurisdictions globally including Labuan have Foundations Acts to regulate their wealth management activities. Additionally, re-domiciliation to one another among these jurisdictions and vice versa is permissible.

More readings:

• An Overview to Set Up a Private Foundation
• Labuan Private Foundation and Its Structure for succession planning
• Trust and Foundation – Know the Difference
• Will vs Foundation – Know the Difference

To understand better about setting up a Labuan Foundation, connect and discuss with our QX Trust consultants for your wealth and succession planning at CONTACT US or consultant@qx-trust.com over a complimentary session.