China Wealth Transfer Drives Expansion of Family Offices and Trusts

The China wealth transfer market is entering a new phase as regulators and local authorities encourage development of family trusts and family offices to support intergenerational succession.

An action plan issued in June by the People’s Bank of China, NDRC, NFRA, CSRC, SAFE and Shanghai government called for studying the orderly development of family trusts and family office businesses.

A report from the Hurun Research Institute and Bank of East Asia estimated that around RMB21tr (USD2.9tr) of wealth will pass to the next generation over the coming decade, rising to RMB77tr over 30 years.

Family offices are meanwhile expanding beyond investment management into succession, governance, tax, legal and insurance planning.

The challenge is becoming more pressing as wealth changes hands. UBS research found 60% of surveyed family offices intend to adjust their strategic asset allocations within 12 months, but only 35% have a clear succession plan.