By: Miao Zijun, Director, Global Private Banking, HSBC China
The repeated outbreak of the new crown epidemic has exacerbated the uncertainty of the world, causing impact or pressure on global economic growth, social development and international relations, and has brought long-term and far-reaching effects on all aspects of human society.These many problems caused by the epidemic are also reshaping the concept and value orientation of Asian high-net-worth individuals towards public welfare and charity.
In the past few years, despite the challenging global economic situation, the high net worth group has maintained a relatively steady expansion.According to Capgemini's "2021 World Wealth Report" data, the number of people with investable assets exceeding one million US dollars in the world in 2020 will exceed 20 million, an annual increase of 6.3%, and their total wealth will be nearly 80 trillion US dollars.
But what is different from the past is that the wealth concept of this group is changing, and it is gradually shifting its focus from pursuing wealth growth to taking more social responsibilities and enhancing influence.Especially in Asia, high-net-worth groups who have completed the rapid accumulation of family wealth, on the one hand, consider more environmental, social and corporate governance (ESG) factors in investment decisions, and on the other hand, incorporate philanthropy into their families in various ways. In the planning of wealth inheritance, let the values continue for a long time.
In the past, Asian high-net-worth groups participated in charitable charities in a similar way to project investment. They chose the direction of donations through due diligence on charitable organizations or projects.Today, the epidemic has made them put themselves in their shoes and respond more proactively and flexibly to the needs of society.For example, for some low-income families seriously affected by the epidemic, they will take the initiative to contact relevant agencies, establish emergency financial support plans, and extend the scope of assistance to family members and related groups around them to help the community tide over the difficulties more efficiently.
At the same time, the perspective of HNWIs participating in public welfare and charity is becoming more and more long-term.They are increasingly inclined to establish a more efficient and credible charitable operation structure through family funds and charitable trusts, so that philanthropy can become a sustainable and transformable influence.
It is particularly noteworthy that, as Asian family businesses are about to enter the peak period of succession, philanthropy is becoming a new way for high-net-worth groups to inherit family wealth and family core values, helping families fulfill their social responsibilities while realizing wealth, The smooth inheritance of career and values; it can not only prevent wealth from being squandered, but also enable the younger generation to gain experience through family public welfare undertakings, improve leadership, enhance family cohesion, and pass on family values, culture and spirit from generation to generation.
In mainland China, the wealth-creating generation is also gradually transitioning to the value inheritance stage represented by participation in public welfare and philanthropy."Charitable trusts" and "charitable foundations" are becoming new choices for families to engage in philanthropy.Through the organic combination of foundations and charitable trusts, entrepreneurs can establish an efficient and credible charitable operation framework, realize the charitable will of the family, and reflect their social responsibilities.This means that the donation activities of high-net-worth individuals in the Mainland have changed from a relatively random approach of helping the poor and the needy to being institutionalized and standardized, and they have also shown distinctive corporate characteristics and personal styles in the direction of funding.
In the future, it is expected that Asian HNWIs will continue to see substantial growth in philanthropy, sustainable investment and impact investment.This will not only drive multiple parties to participate in the third distribution, help reduce poverty, protect the environment and enhance social resilience after the epidemic, but also bring immeasurable intangible wealth and influence to family businesses.Private banking services can build a bridge between wealth and public welfare by connecting charities and NGOs.
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