Many Asian active wealth families are considering consolidating their extensive structures. Part of this comes from the complexity of compliance and the fiscal landscape, which is increasingly complicated to navigate and only likely to become more so, over time.
‘Complex compliance is part of the landscape today for our clients. As compliance oversight becomes more challenging, our clients and their advisors are looking at how they can streamline entity management and administration. In part, that is one of the trends pushing consolidation of all of a family’s entities to a single service provider. This facilitates compliance and reporting, especially for clients with extensive cross border interests, which is increasingly the norm,’ explains Wendy Sim, Managing Director, ZEDRA Singapore.
Why the need for consolidation?
For families in Asia and particularly Singapore, risk management isn’t the only reason clients are looking to consolidate. 2020 has put streamlining structures high on the agenda for some clients, spurred in part by the lack of travel for families and their advisors, lending more time to think and assess how to simplify coordination of a family’s holdings and ownership structures.
Over time, as wealth has grown, families and their advisors have typically added entities into the overall structure for different purposes or for different assets. It’s not uncommon for a family to end up with a varied holding of multiple vehicles both local and offshore. Over time, multiple service providers may have been brought into the mix to handle different entities. It is also common for one service provider to handle a family’s private entities, while another provider manages and administers the family’s business interests. A third service provider might handle fund administration. As compliance and legislation becomes more complex, coordinating entities spread over several service providers is becoming increasingly burdensome and time consuming.
‘We’re seeing that families are in favour of consolidating their structures and moving towards working with a single service provider who has oversight of all the family’s entities. This is akin to Limited Partner servicing, where the service provider provides enhanced visibility and customised reporting for the families.’ ‘Expansion comes with complexity. There is a need for service providers like ZEDRA who have an in-depth understanding of corporate and fund structuring to support our clients’ business expansion globally, as well as structure appropriately for private wealth concerns including the use of trusts, foundations and SPV’s,’ explains Wendy.
Having one service provider manage and oversee all of an active wealth family’s entities and fund structures can bring significant coherency, efficiency and cost-savings.
What is ZEDRA’s Active Wealth offering?
Active Wealth reflects the needs of modern family business owners, entrepreneurs and high net worth individuals. These clients require multitude of different services linked to their family wealth. Increasingly, they also see less of a divide between personal and corporate interests: they often want these handled by the same service provider with a single point of contact, rather than multiple providers or several contacts within the same organisation.
Instead of requiring private, corporate or fund services separately, under the ZEDRA Active Wealth umbrella, private clients and their advisors can liaise with a single contact in any of our offices, streamlining and simplifying services and risk management across their holdings.