Family offices in Hong Kong are sounding the alarm! They are in desperate need of a robust regulatory framework to enhance professionalism and competitiveness in the financial sector. Prominent local families and financial service providers believe this is crucial for the city to outshine its rivals in attracting global wealth.

According to Mahesh Harilela, a leading figure in the family business community, a solid regulatory framework would foster trust and encourage affluent families from mainland China and abroad to establish their wealth management offices in Hong Kong. He emphasizes that aligning family offices with such a framework could capitalize on Hong Kong's inherent strengths in investment management.

Key Statistics: Hong Kong vs. Singapore

Currently, family offices in Hong Kong oversee approximately $1.3 trillion in offshore assets, matching Singapore's figures. Remarkably, there are over 2,700 family offices operating in Hong Kong, outstripping the fewer than 2,000 located in Singapore. This competitive edge highlights the potential for growth in the sector.

Gregg Li, an honorary member of the Center for Family Business at the Chinese University of Hong Kong (CUHK), reinforces Harilela's views, arguing that the family office sector in Hong Kong urgently requires clarity on regulations, institutional support, and talent development. To compete globally, a strong brand identity is essential.

Investment Opportunities on the Horizon

Li points out that family offices are eager to explore investments in cutting-edge technology and innovation, especially if commercialization and market incentives are strong within the Greater Bay Area, including Hong Kong.

With the Hong Kong government investing HK$1 billion in AI and high-tech project commercialization for the fiscal year 2024-2025, the stage is set for exciting opportunities.

Despite its impressive financial capabilities, Harilela insists that a reliable regulatory structure is critical for creating an optimal environment for family offices.

Is Hong Kong at a Crossroads?

Though Family Office HK (FOHK) was launched in June 2021 to position Hong Kong as a family office hub, a recent study from CUHK suggests that the family office ecosystem is currently at a pivotal point. It needs to mature to support growth in asset management and technologically diversified investment portfolios.

Research co-authored by Marshall Jen and Li indicates a pressing need for structured training and ecosystem development to elevate professionalism in the family office landscape, pivotal for Hong Kong's standing as a competitive hub. A strong public-private partnership could significantly enhance service quality and collaboration among stakeholders.

The time for action is now: without the necessary regulatory framework, Hong Kong risks losing its edge in the rapidly evolving world of family offices.