NRI Talk: Three generations, one table - how Asia's wealth boom Is reshaping family governance, says Lim Ping Ping of LGT Group

Economic Times

10-05-2025

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Q) From your perspective guiding families and their family offices in Asia Pacific, can you share some practical insights for families and their family offices who are integrating Artificial Intelligence in their family office?
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Q) With Asia set to surpass the US in the number of millionaires by 2025, how are family offices in this region evolving to meet the needs of a rapidly growing and increasingly diverse group of wealth holders.
Q) Intergenerational wealth transfer is one of the most important -and complex – conversations for families. What approaches are proving most effective in preparing the next generation to take on leadership and in fostering unity across generations?
Q) What strategies are family offices employing to navigate the complexities of cross border taxation and global wealth structuring in light of evolving international tax regulations?
Q) In what ways are family offices evolving their philanthropic strategies to align with the values and interest of younger generations?
Q) How are family offices managing the increasing demand for alternative investments, such as private equity and venture capital, within their portfolios?
As Asia races ahead to surpass the US in the number of millionaires by 2025, a quiet transformation is underway within its wealthiest families.The surge in affluence is not just creating more high-net-worth individuals—it's redefining how families manage, transfer, and preserve wealth across generations.Lim Ping Ping, Vice-Chairwoman, Global Family Wealth Member, and LGT Group APAC Executive Board Member, observes a striking shift: it's no longer unusual to see three generations of a family sitting together for investment reviews.This multigenerational dynamic brings immense opportunity—but also new challenges. With founders living longer and younger generations eager to step up, family offices are under pressure to balance tradition with transition.In this edition of NRI Talk, Lim shares how evolving governance frameworks, co-stewardship models , and culturally rooted approaches are helping Asian family offices navigate the complexities of legacy and leadership in an increasingly global and diverse environment. Edited Excerpts -Most family offices expect Artificial intelligence (AI) adoption in the family office set up to bring not just enhanced efficiency but advanced analytics.AI presents significant opportunities but also unique challenges for family offices.If family members served by their family office are using AI tools in their private lives, and seeing how fast reports can be summarized, these families may expect their family office analysts and staff to produce insights faster and with less support.What may not be so clear to them is that their family office manages diverse assets across a variety of verticals and are working off fragmented data: different data systems including spreadsheets and legacy software.AI needs clean data but also smart human stewardship. Without clean, well ordered data, the family office may be quite limited in getting the real benefits of AI adoption.Since there is no one AI solution for all families, families must match tools to use cases. Using family governance principles, the AI strategy for the family office needs to be clear and written out.Clearly identifying what specific needs of the family office may be met from AI adoption is a starting point. Digital housekeeping is another: for example, mapping out data systems in use, having a framework for access, handling, storage is definitely helpful especially family offices with legacy data systems and software.Confidentiality and privacy concerns must be met through a clear articulation of family office's AI usage terms and conditions.Tech Update sessions with family principals on what AI tools are in use, what benefits and controls have been put in place in integrating these tools in the workflow are great opportunities also for family principals to learn and adopt new technology.Forward looking family offices understand that governance structures for the family office ecosystem should include frameworks that articulate the AI adoption strategy, integration, usage and education.Some of these family offices who are advanced in using AI tools for family office operations have made assessments of which AI tools are most impactful for the specific needs and have practical strategies for how they deploy AI tools in their operations such as AI Sandboxes (where AI models are trained in-house using anonymized datasets without connection to external servers).Although one hesitates to use the generational lens to view this topic, we have seen this aspect of family office activity to allow room for a younger generation to lead the way in identifying solutions for AI adoption or integration without compromising on confidentiality.Asian families are not just more globalised, their family members are (blessedly) living longer. At LGT, we can see that our clients are more often than not, multi-generational in profile and you may have even up to 3 generations sitting at the table when LGT conducts investment portfolio updates and reviews.To have the luxury of each generation bringing their perspectives to the table is a wonderful thing. But the longevity is a blessing unless no one knows when to let go.Next generations may feel stifled in their development as they – even in their 60s – have meaningful leadership autonomy while the founder generation feel frustrated with their next generation's inhibition with stepping up to claim leadership.At LGT, we help these families and their family offices with stewardship roles, to explore suitable practical ways for bridges to be built so that co-stewardship can be found in both generations.Governance planning is often discussed in the limited context of board seats and voting shares. The real leverage is in shared decision-making processes that allow families to build the 'muscle' for collective decision making under pressure and in the face of disruption and ambiguity.As families grow older and spread wider, governance frameworks such as family charters, family meetings – provide for opportunities for continuity in relationship building. Longevity may mean that the founder generation (GI) may still be in the room when the G3 or G4 is being born – maybe into an entirely different country and culture.Governance can be the bridge between founder and future generations – no matter how different the worlds in which they were born.For family offices serving multigenerational client families who are also globally dispersed, LGT are providing guidance to these family offices on creating opportunities to culturally anchorWe encourage families to reframe the topic of succession from a single inheritance event to that of a long arc of transitions.To put it simply, succession is not a baton pass – it is more a long distance relay with overlapping runners. When families treat succession planning as a singular dramatic moment, the lived reality is that real succession is actually piecemeal. In Asian families, where founders may remain involved well into their 70s, 80s or even their 90s, you could have successors who may be managing but not leading.At LGT, we guide our client families on their intergenerational succession planning by looking at transition phases: we have worked with families for decades but have also the added benefit of the playbook o LGT's owners, the Princely Family of Liechtenstein, whose entrepreneurial record is 900 years and going in its 26th generation.We bring new ideas on how to create room for next gens to start taking leadership on pilot projects or to lead new ventures or steward philanthropic capital as a low risk on ramp into leadership.We use these transition phases to design appropriate structures for intergenerational learning and involvement. We institutionalise learning in the family ecosystem through our bespoke education workshops.Family and family offices who are reactive in their approach to dealing with cross border taxation and global wealth structuring are likely going to find this a poor approach given that, from a tax planning perspective, international tax and other regulatory regimes are not only evolving, they are interweaved together almost as a tapestry.The most resilient families see tax strategy as an expression of broader family families of sustainability, compliance and stewardship.The strategic mindset shift is to look at building optionality by continuously monitoring jurisdictional complementarity: Indian families have long sent their children overseas to build new paths and have themselves sought opportunities beyond the original home base.Diversification in the residence of different family members through natural life choices may bring both complexity and opportunity in planning. Without a doubt, family offices that are well tasked for this prepare in advance including understanding and using tie-breaker rules.Younger generations bring a real hands on approach to philanthropic endeavours. This influence has brought many families to venture philanthropy – we saw this most clearly through LGT Wealth India's engagements with our clients.Our Indian clients have been most actively working with Poonam Mirchandani, our Head of Family Advisory and Wealth Planning Solutions and Supriya Balakrishna, who heads our venture philanthropic unit in India, to identify grant making opportunities which can provide a learning journey also for the next generations.Whilst acknowledging this influence, it is important to stress that in the family charters that we help our clients to write, a most commonly referenced family value is giving back to the community and a commonly held wish and goal is to preserve the legacy of this community building of forefathers and founders hence family offices may see their philanthropic strategy be adjusted to reflect these two ways of givingFrom my perspective hosting and facilitating family meetings and workshops where we are building commonality in approach across the different family members / branches, there is one aspect of the topic of private equity that I feel deserve some discussion: I have found that some families conflate the term "private equity" to mean different things - with some referring to private equity to include direct investment in a say, a start up whilst others may mean co-investment alongside a GP as opposed to venture capital which has its own risk profile.It's always interesting to me that when you peel this onion (usually when we are facilitating a family's discussion of an investment policy statement) that some family members argue for direct investment because they expect that this means control when in fact of course many direct deals carry all the illiquidity of private equity with none of the real governance rights or information access when you are participating as a minority alongside GPs or lead investors.Families that do not appreciate the different liquidity profiles, success rates and governance demand of the different types of direct investments (whether in the form of venture capital, participation via a fund model or pure direct investment into an operating company) will have a muddled view of risk management.Family offices can help address this by being precise and not just focusing on returns or diversification without saying what kind and why.: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)