Speaker Presentation by Mary K Duke, Private Family Office Expert, Family Office at the PWM Greater China Summit 2015 in Hong Kong

1. Private Wealth Management
Greater China Summit
4 September 2015
Hong Kong
MARY K DUKE
Family Wealth Advisor

2. Coming Wave of Wealth Transfer
• Unprecedented wealth created
in the last 60-70 years
• Trillions expected to be passed
to next generation
• Different regions are at different
points in transition cycle
• Huge risk of loss in transition!

3. Biggest Threat to Family Wealth
A family has a 91% likelihood of failing to transition wealth
to the third generation

4. WHY
 Taxes?
 Investment performance?
 Business Failure?
 Bad Estate Planning?
Williams & Preisser - 85% of failures due to:
1. LACK OF TRUST & COMMUNICATION
2. POOR PREPARATION OF RISING GENERATION

5. So what are families around the world
doing to address this issue?

6. Life gets complicated!
a/k/a – a Dog’s Breakfast

7. OPERATING
COMPANIES
PHILANTHROPY
ADMINISTRATION
FAMILY
TAX &
ESTATE
INVESTMENTS
Family Office Functions

8. A Single Family Office varies according to
the family’s areas of focus
Family
Investments
Operating Company
Philanthropy
Admin
Tax & Estate
BUSINESS OWNING –
FOUNDER’S OFFICE
POST LIQUIDITY
INVESTMENT OFFICE
100 YEAR
FAMILY OFFICE

9. Many Family Offices
start inside the family Business
Co-located family office – with array of outside advisors
+ Advantages – share staff, easy to manage, low cost
- Disadvantages – privacy, lack of expertise
Catalysts to move family office function out of business:
 Privacy
 Need for specialist talent
 Sale of business
 Generational transition
 General desire to professionalize
If family services are not embedded in the business,
where are family members getting matters addressed?
Not every wealthy family has a family office!!

10. Primary Family Office Models
Single
Family Office
Tailored services for one
family – “top of the line”
• EXPENSIVE
• Highest service
level
• Privacy
• May be located in
multiple
jurisdictions!
Multi
Family Office
Origin of firm is clue to
business model (SFO,
accountants, former
private bankers, etc.)
• Scale, enhanced
services
• Less privacy
• Better staff
retention
• Professionalism
Family Office
Service Provider
Platforms offered by
private banks,
Investment shops,
accountants, lawyers,
wealth management
firms, etc.
• A la carte services
• Access to
institutional
offerings
• Bias/product push

11. Where are the billionaires?
"The World's Billionaires: 2015
Ranking". Retrieved 2015-07-29

12. World Tour of Family Offices

13. AUSTRALIA
State of play
• 27 Billionaires, 24 Mil people
• Emerging Family Office Community
• Conferences, Networking groups
• Family Office Congress
• Approx 500 SFOs, Few MFOs
• Economic, political, social stability
Trends
• Asian Investment driving RE / Commodity
prices
• Challenge of “Dictatorship to Democracy”
• Building their own resources – no easy
access elsewhere

14. CANADA
State of play
• 39 Billionaires, 35 Mil People
• Nascent Family Office Community
• Few conferences, networking groups
• Few MFOs
• Highly regulated financial sector
• Very stable economy, strong banking sector
Trends
• Influx of Asians relocating or dual-locating
• Tightening tax and immigration rules
• Easy access to US market for family office
resources, even staffing

15. GCC REGION
State of play
• 21 Billionaires, 43 Mil people
• 30-40 SFOs, only one MFO
• No tax or business need to separate family
and business
• Large, complex families with large, complex
business holdings still G1 or G2
Trends
• Use of “partial” IPOs provides valuation and
incentive to professionalize
• Use of offshore jurisdictions due to
uncertainty/instability
• Dubai DFC as FO jurisdiction
• Leverage family office resources in UK/US

16. RUSSIA
State of play
• 88 Billionaires, 144 Mil people
• Private wealth only since early 1990s
• Legal framework is new and fragile
• Few local experts & professionals to run FO
Trends
• Strong preference for managing wealth outside
Russia
• Focus is on generating wealth
• Family offices are an exotic concept, not a
factor in Russian market

17. UNITED KINGDOM
State of play
• 117 Billionaires, 65 Mil people
• Long legacy of private wealth
• Resident, non-domiciliary regime
• Vast resources for FO, MFO and Service
provider platforms
Trends
• A gold standard jurisdiction for families seeking
a jurisdiction outside their country
• Some political uncertainty around res non-dom
regime

18. INDIA
State of play
• 90 Billionaires, 1.25 Bil people, and growing
• Rapidly emerging Family Office Community
• Family Office Certification
Trends
• Pro business governmental policies
removing restrictive trade practices
• Challenges of East meets West
• Growth is driving need for talent
• Leveraging large diaspora resources

19. UNITED STATES
State of play
• 615 Billionaires, 320 Mil people
• 3-5,000 SFOs,
• Well into succession transition cycle
• Extensive FO community & resources
• Sophisticated MFOs & FO service providers
• Political, economic, social stability
• High tax and regulatory environment
Trends
• Use of US as “off-shore” jurisdiction by
families in regions with uncertainty
(also UK and Canada)
• Expansive definition of family
• Very sophisticated 100 year family offices to
address the succession challenges

20. BRAZIL
State of play
• 54 Billionaires, 200 Mil People
• Emerging Family Office Community
• Many on shore FOs do not manage money
• Complex tax and reporting regime
• Strong economy buoyed markets
• Strong trend toward professionalizing FO
• Few MFOs
Trends
• Lawyers forming family office services
groups
• Strong M&A has led to vast liquid wealth

21. SWITZERLAND
State of play
• 29 Billionaires, 8 Mil people
• 100+ SFOs, Vast number MFO and FO
Service Providers
• Jurisdiction for many non- resident families
Trends
• Financial services industry is dealing with
fall-out from recent tax and banking
scandals
• Very sophisticated wealth management
capabilities – working on building 100 year
family resources to match

22. HONG KONG
State of play
• 55 Billionaires, 7 Mil people
• Major IFC with vast resources
• 40 SFOs, many FO service providers in banks
& wealth management firms
• Confidentiality cloaks real numbers
• Business and family often intertwined
• Further into succession cycle than PRC
Trends
• Increasing regulation
• Increasingly public family disputes and
litigation
• Challenge of learning to be effective owners
and stewards

23. CHINA
State of play
• Visible wealth is very new – transition will
be a bit later
• Deep traditions of kinship, social structure
and respect
• Family education and safety highest priority
• Nascent tax and regulation
• Few SFOs, few professionals & experts
Trends
• One child policy – impact on succession and
concentration of wealth
• Challenge of East meets West
• Reliance on offshore jurisdictions for access
to investments, diversification and
professional staff
• Service Provider model is popular

24. Universal trend: TRANSPARENCY

25. A burning question for families with wealth –
What would you do differently with your
family wealth, if the public could see inside?

26. Remember the GREEN!
The greatest risk to family wealth is in transition –
THE FAMILY is the MOST IMPORTANT ASSET TO MANAGE

27. Thank you for your kind attention!
MARY K DUKE
www.thehighrd.com
+1 917 434 7150
mkduke@thehighrd.com

28. MARY K DUKE
www.thehighrd.com
+1 917 434 7150
mkduke@thehighrd.com
Mary K Duke helps families leverage their wealth as a tool for family
flourishing and social good. Fusing deep technical expertise with skills in
family systems and dispute resolution, she focuses on empowering the
rising generation and on helping wealthy families adopt the practices that
foster individual growth and make family collaboration more effective and
rewarding.
With over 25 years serving families in multiple capacities Mary is an
expert in trusts and cross-border transfer of wealth strategies, family
business succession, family office formation and operations, next
generation mentoring, philanthropy, entrepreneurship and governance
for families and their businesses. She spearheaded a leading private
bank’s award winning global family wealth Initiative and has worked with
many sophisticated families and their advisors helping them navigating
the challenges of successfully transitioning wealth across generations.
Mary is an author and international speaker, often quoted on topics
relating to families and wealth. She has conducted next generation and
family retreats in Europe, Latin America, Asia, the Middle East and the
United States. Previously, Mary headed two private family offices
involving prominent families and significant owned operating companies.
She practiced private client law in New York and is a licensed attorney and
certified accountant.
Mary lives with her husband Richard near New York City and they have
three grown children. She is an avid squash player working to improve her
game despite the march of time.

29. For more information about the
marcus evans investments
summit series:
investmentseries@marcusevanscy.com