Taking the Holistic Perspective to Estate & Legacy Structuring

In this first part of his interview with Hubbis, our Managing Director for Asia Pacific, Middle East and Africa, Markus Grossmann, shares some insights on the key market trends that he sees playing out in APAC and zooms into the Indian market and its potential.

“My first advice to clients is that they need to be supported by somebody who keeps their big picture in mind – and not just trying to close a deal - and who takes in consideration the type of assets owned, their locations, and the personal and business circumstances of each individual and family,” he says opening the conversation. “Too often individuals tell us they want to establish a particular structure in a pre-defined jurisdiction based on discussions they had with several other advisors who do not have access to the big picture or are not sufficiently qualified. This is because sometimes some advisors jump to conclusions too quickly and do not connect the dots, not giving proper consideration to all the tax, regulatory and other aspects which may be involved.”

Connecting the dots

Markus has extensive experience in these matters, in particular with regards to Asia Pacific, being the regional head of APAC, the Middle East and Africa at Trident Trust, a global independent provider of fiduciary and fund services. Founded in 1978, Trident Trust extended its operations and global reach to Asia with the opening of a Hong Kong office in 1992 and then a Singapore office in 2010. These two Asian hubs together employ over 170 staff.

The Singapore operation has been very successful in bringing North and South East Asian clients to Singapore, mainly being attracted by the tax incentives for funds and family offices. The Hong Kong office has grown very rapidly by providing a wide spectrum of structures for North Asian clients ranging from Discretionary Trusts, Private Trust Companies, pre-IPO planning through listed company services and pre-IPO trusts, EBTs and other tailor-made trust structures. More recently in 2021 Trident opened an office in Shanghai, China, to cater for the increased demand from Mainland Chinese clients. The firm has also recently opened an advisory office in New Delhi, India.

A more open dialogue

Markus highlights some of the key trends he has been witnessing globally and within the Asian region in particular. A key priority is succession planning, where many of the taboos in Asia around this subject have been swept away further by the pandemic.

“The discussion around succession planning and legacy has become considerably easier,” he reports. “We all know that Chinese, Indian and other cultures do not like to talk about heritage and succession plans, but today we are finding such clients increasingly engaging us in these conversations.”

Globalisation amongst the wealthy

Another trend is the internationalisation of wealthy families which has now become more complex due to the pandemic, lockdowns, travel restrictions or other obstacles. This, he says, has led families to consider alternative residence or citizenship around the world for a wide variety of reasons, from minor travel restrictions to different tax regimes or again better access to more comprehensive medical facilities.

Elevating the science of estate planning

“The opportunity for our firm is that many clients have not in place a well thought out estate plan, or perhaps they have been poorly advised,” he reports. “They often start out with advice from someone based in their country but they often receive advice that is not impartial, or which comes from advisors who do not know the matter and the implications well enough or again who do not have the relevant experience. ”

Early connectivity

Markus has clear and firm views on how to relate to these clients and handle their concerns. “We have to connect to these clients in their locations and engage them in discussions with a truly international perspective,” he reports. “And that is why we have established a local presence in our key markets; this is really important to us and our clients.”

Markus cites a hypothetical Indian family that is becoming increasingly international in terms of their assets and the location of different family members. He says they have many crucial issues to consider for robust and effective planning for their wealth, their domicile, where they or family members will end up living, where their businesses and other assets are and how those may be structured to be protected and preserved, and indeed how they might be passed on to other family members or beneficiaries in the future.

The great transition

“Much of the wealth in Asia, for example India, is still actually first generation, and these sorts of discussions are vital to the future of the families and their businesses,” he observes. “The bigger the family’s wealth and complexity, the more vital it is to address these matters. We see more and more discussions on these topics happening all the time across our markets. A vast portion of Asia private wealth was made since the liberalisation of the economies and financial markets in the mid-1990s, so a lot is still first generation, and in the next 5 to 10 years, a vast amount of wealth will transition to the second or third generation.”

Speaking from experience

Markus believes Trident is ideally positioned from both a historical and an operational perspective.

“We ourselves have gone through exactly the same inter-generational shift to the second-generation ownership, and have worked with numerous clients around the world that have faced these wide-ranging issues and challenges,” he reports.

He explains that Trident wants to be the partner to those customers for the long term as a trustee, “It is not only about setting up a trust and managing that as a trustee, but also providing advice and service consistently, building long-term relationships with the first as well as following generations,” he states. “We have proven to our clients that we always deliver on our promises.”

India – opportunity beckons

Markus zooms in further into the Indian market and its potential, focusing on non-resident wealth that is overseas but that in all or in part might want to return to India. He says there are thousands UHNW or upper HNW individuals - many of whom very successful entrepreneurs in technology or other fields - across the world looking to return to India.

“They get older and want to rediscover the roots, their families and many also see incredible opportunities at home that perhaps were not there when they left,” he explains. “And that all generates another whole segment of business, and it is essential that they establish the right structures.”

A two-way flow

Additionally, there is huge and growing activity in foreign investment from all types of investors into India using fund structures. “India, like China today, is one of the world’s most interesting markets for foreign investors,” he reports.

All these opportunities and challenges are why Trident Trust has established a new advisory office in India. “We do not provide local trustee services or local corporate services, but this is an office that will develop relationships with professional firms and clients, who want to use the services other Trident Trust offices around the world can provide, and we anticipate sharply higher activity as a result,” Markus explains.

The typical clients might, for example, be an UHNW Indian resident family intending to invest offshore and through the right vehicles and structures. Another typical client might be an Indian resident intending to move abroad, perhaps to Dubai, Singapore, the UK, or elsewhere. Some clients might want to invest domestically or bring money back home through fund structures, for which Trident is a major fund administrator. And then there are the NRIs who want to return to India and need help with the right structuring ahead of such a move.

Understanding the world we live in

Markus closes the discussion by observing that the world has changed rather dramatically in recent years and that Trident is well positioned to handle the challenges ahead. “As the world becomes more complex, increasingly global clients need international advice and solutions,” he says. “We provide this type of connectivity and multi-jurisdictional perspective to help these clients understand the challenges and address them with the right approaches, structures and, very importantly, consistent ongoing advice.”

Back to the future

His final word is that he is enjoying seeing the Trident teams back in their offices around their markets, engaging once again with each other and with clients. “There is a new energy returning since the travel and other restrictions have lifted,” he says. “I am loving being back travelling and meeting everyone again, and I feel like there is this pent-up interest and enthusiasm coming through. I am a believer in all this, we are in a people business and there is nothing like direct engagement for building better relationships and better outcomes.”