KBank Private Banking reinforces its leadership in Family Wealth Planning service. First to introduce the service in Thailand, the wealth management service provider unveils three key approaches behind its offerings: business and asset risk management, sustainable structuring of family business and assets, and involvement of the next generation.
Approximately 3,600 customers have used the service, covering over Bt120 billion worth of family assets. The private bank aims to provide Family Wealth Planning Service to at least 50% of customers within its portfolio within three years by leveraging knowledge and expertise from Lombard Odier in delivering a comprehensive advisor service, from education, planning, and facilitation for execution.
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Jirawat Supornpaibul, Private Banking Group Head, KASIKORNBANK, said that KASIKORNBANK is the first private banking service provider to offer Family Wealth Planning service to Thai high-net-worth customers. The service has seen continuous growth over the years, particularly during the past two to three years. With factors such as technological advancements, economic volatility, and health risks from the pandemic, high-net-worth families increasingly recognize the importance of efficient family asset planning and management, notably by involving the next generation in business management sooner.
According to the survey by Lombard Odier, 45% of families without family governance in place start thinking of adopting one in the future.”
Family businesses are an integral part of Thailand’s economy, with more than three out of four publicly listed companies categorized as family businesses. Statistics demonstrate that 75% of all family businesses in Thailand are currently being managed by the second generation while only 4% are managed by the third and fourth generation. Such data points out that most Thai family businesses have been established for a relatively short time and are in a crucial transition period of planning to build sustainable wealth.
Perapat Reinprayoon, Chief – Wealth Planning, Private Banking Group, KASIKORNBANK, added that KBank Private Banking offers a comprehensive Family Wealth Planning Service with an emphasis on sharing accurate and updated information and leveraging the global expertise of our strategic partner, Lombard Odier, to help clients in the wealth planning process and facilitate them in the implementation of their plans.
“Today, we have provided Family Wealth Planning Service to approximately 3,600 customers, or around 720 families, covering family assets, including family businesses and land worth over Bt120 billion,” said Perapat.
The majority of families still mainly focuses more on business expansion rather than efficient planning and management of assets. They faced similar challenges in three main issues.
- The need for expertise in risk management from business operations and asset holding, in particular, comprehensive tax planning: This demand is driven by the new Land and Building Tax and international exchange of information for stricter taxation, e.g., the US Foreign Account Tax Compliance Act (FATCA) or Common Reporting Standard. Our recommendation for clients on family asset management is to consider tax costs and prepare for efficient planning.
- The challenge of traditional structuring of family businesses and assets (Kongsi) in the current social context: With the conventional approach relying on family customs for decision making, many families are urged to update related rules to ensure more transparency. This shift calls for various tools to put a sustainable management system in places, such as a comprehensive asset holding structure through family holding companies or offshore trusts. Such solutions also bring other benefits; namely, if any family member experiences financial hardship, they can rely on assets from the trusts to provide for themselves and their respective families. Additionally, the trusts can contribute to the welfare benefits for family members as well.
- Differing attitudes and goals among family members: The second and third generations who have opportunities to study and live abroad or have innovative business ideas usually come into generational conflicts with their parents, causing disruptions in business operations during the transition period. We usually advise clients to prepare the next generations to lead the business and involve them in major decisionsas soon as possible. More importantly, we urge them to establish family governance that is endorsed by all generations.
“To answer the need for wealth management, KBank Private Banking plans to enhance our services by implementing a viable strategy in result monitoring to support families in the planning and facilitate the execution of asset management according to the plan. We also aim to strengthen our family philanthropy and family office service offerings.
Family Wealth Planning Service requires time and detailed personalized planning for each family to develop a set of rules that every generation agree upon. We aim to provide the Family Wealth Planning service to 50% of all customers within the next three years. Today, approximately 32% of customers have already been serviced,” said Perapat.
KBank Private Banking’s Family Wealth Planning Service comprises six key offerings:
- Asset Holding Structures
- Financial Asset, Liability and Risk Management
- Family Continuity Planning
- Inheritance and Wealth Transfer
- Philanthropy
- Family Office
