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Time of India
22-05-2025
- Business
- Time of India
A blended approach—India + global—is becoming the norm in NRI portfolios: Alok Saigal
As global markets evolve and India's economic momentum continues to strengthen, Non-Resident Indians (NRIs) are increasingly adopting a balanced investment strategy that spans both geographies. In this edition of NRI Talk, Alok Saigal, President & Head – Nuvama Private, shares key insights into how NRIs are moving away from single-market focus and embracing a blended approach—allocating capital across Indian and global assets. From real estate and fixed income to equities and alternatives, NRIs are structuring their portfolios to harness the best of both worlds, reflecting a growing sophistication in wealth management and long-term planning. Edited Excerpts – Q) How are NRIs looking at India as a long term investment destination? And, what are the other hot countries which they invest in? A) NRIs are increasingly viewing India as a strategic long-term investment hub, driven by strong economic fundamentals, favourable demographics, and digital transformation. According to the 2024 Knight Frank Wealth Report, over 65% of NRIs surveyed see India as a priority market for wealth allocation over the next decade. Key reasons include: India's GDP is expected to grow at 6.5–7% over the next five years, one of the fastest among major economies. Rising trust in India's governance, digital infrastructure (e.g., UPI, Account Aggregator), and regulatory frameworks (SEBI, RBI, IFSCA reforms) Live Events Geopolitical stability over long term & good trade relations with US & other countries, is another major reason for India being an attractive investment destination Many NRIs are channelling funds into equities, real estate, REITs, AIFs and startup ecosystems with a 10–15 year view, combining emotional ties with economic logic. While India is seen as a core long-term investment destination by NRIs, countries like UAE & Singapore continue to attract NRI capital for diversification, real estate and global exposure. A blended approach—India + global—is becoming the norm in NRI portfolios . Given initiatives at GIFT City, NRIs are looking at GIFT domiciled funds as preferred investment vehicles for inbound investment in India. GIFT domiciled funds with underlying listed equities, units of mutual funds, long short funds, performing credit funds and real estate credit funds are being sought after by NRIs from various geographies. Taking about other geographies, real estate in Dubai is a favourite option. In 2023, Indians were the top foreign investors in Dubai property, contributing over AED 35 billion (~₹80,000 crore). NRIs see Dubai as a combination of lifestyle & business hub, and a convenient location to fly to and from India. Singapore's fintech and REIT space is especially appealing to younger NRIs besides other regulated investment products and global banking. Q) There is big debate on social media about taxation. Help us understand why NRIs In Dubai, Singapore & Mauritius have to pay zero tax on mutual fund gains? A) India has signed Double Taxation Avoidance Agreements (DTAAs) with countries like the UAE, Singapore, and Mauritius, which help prevent NRIs from being taxed twice on the same income. In many cases, these agreements, combined with the domestic tax policies of the NRI's resident country (which may not tax capital gains), result in zero tax on mutual fund gains in India. These treaties are designed to promote cross-border economic activity and make it easier for NRIs to invest in India without facing undue tax burdens. As a result, India sees a large inflow of foreign capital from these countries, where many Indians live and are already familiar with Indian financial instruments. To avail of these benefits, NRIs need to meet certain criteria — such as staying in the UAE for at least 183 days in a calendar year — and submit documents like a Tax Residency Certificate and Form 10F to Indian tax authorities. Not only NRIs, but also foreign nationals from the UAE and Singapore can take advantage of zero tax when a GIFT-domiciled fund invests in units of Indian Mutual Funds. Furthermore, they benefit from not needing an NRE/NRO account, the ability to invest through their overseas accounts, and exemptions from TDS, TRC certificate requirements, and repatriation limits. Q) How much money is moving in real estate/REIT/fractional investment? Is the right way? A) NRIs are steadily shifting from just buying homes for nostalgia to making smarter, income-generating real estate plays in India. According to the Knight Frank Wealth Report 2024, NRI investments in Indian real estate are expected to cross ₹1.2 lakh crore by 2025. What's interesting is that a growing chunk of this is moving into REITs and fractional ownership platforms—offering rental income, professional management, and lower entry points. For many NRIs, especially those based in the UAE and Singapore, these structured models are becoming the preferred way to invest, without the hassle of managing property on the ground. It's a more transparent, compliant, and financially savvy approach—especially when blended with a long-term India outlook. Strong demand for infrastructure investment, attractive returns, and favourable government policies have pushed fund mobilization through listed REITs/Invits and Pre REIT/Invits AIFs as well. Q) What are the big mistakes which NRIs should avoid when making investment in India? A) NRIs often face a complex mix of emotional and regulatory challenges while investing in India. Several missteps—often unintentional—can significantly impact their returns, compliance status, or long-term goals. Below are the key pitfalls and how to avoid them: 1. Ignoring FEMA & RBI Compliance Rules Many NRIs invest using regular resident accounts or fail to convert to NRO/NRE accounts. This is a direct violation of FEMA and can result in legal action, account freezes, or penalties. In 2024, over ₹800 crore worth of NRI investments were flagged by RBI during audits due to compliance lapses, according to Business Standard. 2. Overexposing to Real Estate without Rental Yield Focus While real estate remains a preferred asset class, many NRIs invest purely based on emotional appeal or speculative appreciation. Being in touch with their roots, is one of the key reasons for NRI's to own a piece of land or property in India, without realising the fact that there is minimal alpha generation. 3. Neglecting Double Taxation Agreements (DTAA): NRIs may end up paying tax twice—once in India and again in their country of residence. With proper documentation like Form 10F and a Tax Residency Certificate, they can reduce or eliminate TDS on interest, dividends, and capital gains. Not using DTAA benefits leads to lower returns and compliance issues—something easily avoided with a little planning. 4. Lack of Financial Advisor or Estate Planning Most of the NRI's prefer to invest on discretionary basis, without having complete in-depth knowledge of the instruments or asset classes. It's always good to have a sound financial advisor assisting in cross border transactions, who can give a well encompassed view of returns, taxation, market conditions etc. Also, internationally, it is always a norm to create a trust structure, in order to ring-fence your wealth, and ensure that it is passed on to the rightful heirs, which can be done with the assistance of an estate planning facilitator. 5. Chasing Trendy Asset Classes without Understanding Risk Whether it's AIFs, pre-IPO startups, or PMS products, some NRIs jump into high-return products without assessing their risk appetite or liquidity needs. Q) What is the money mindset which NRIs follow. Are there any common attributes? A) NRIs exhibit distinct financial behaviours shaped by their global exposure, economic background, and cultural ties to India. Globally Diversified, Emotionally Rooted NRIs prefer diversified portfolios spread across geographies and asset classes. Yet, a strong emotional connection to India makes them allocate a significant portion of their wealth—up to 20–25%—into Indian markets, especially real estate, equities, and gold. Long-Term and Goal-Oriented Most NRIs invest with clear goals: retirement in India, building a legacy for children, or maintaining ties with their homeland. This results in a longer investment horizon, low churn, and disciplined SIPs in equity or hybrid funds. Digitally Native, Yet Relationship-Led Being globally mobile, NRIs rely on digital platforms for ease of execution. At the same time, they value relationship managers, especially from firms that understand both local regulations and offshore tax nuances. This hybrid mindset—digital + personal—is becoming a norm. High Preference for Compliance and Tax Planning NRIs are highly sensitive to compliance—both in India and abroad. They look for investments that are FEMA-compliant, FATCA-registered, and come with zero tax leakage. For example, NRE FDs, SGBs, and DTAA-friendly instruments are often preferred due to tax advantages. Q) Which investment options or asset classes are hot favourites of NRIs and why? A) NRIs are increasingly diversifying their portfolios by blending traditional and modern asset classes. Equity Mutual Funds & Direct Stocks NRIs prefer equity-based mutual funds and direct equity investment through the Portfolio Investment Scheme (PIS). The ease of online KYC and a well-regulated mutual fund industry along with the aforementioned tax benefits, have made mutual funds a go-to option. Fixed Deposits (NRE & FCNR) Despite being conservative, NRE and FCNR deposits remain a staple. In FY24, NRI deposits in Indian banks crossed $137 billion, with FCNR (B) deposits seeing a spike due to interest rate differentials and USD-linked returns. The appeal lies in tax-free interest (for NRE FDs) and capital protection. REITs & Fractional Real Estate Real Estate Investment Trusts (REITs) and tech-enabled fractional ownership platforms are attracting younger NRIs. These offer exposure to high-value commercial assets without the operational hassle, and with better liquidity and compliance transparency. Sovereign Gold Bonds (SGBs) & Digital Gold NRIs love gold for cultural and portfolio reasons, but physical storage is tricky. SGBs, which offer 2.5% annual interest along with gold price appreciation, are gaining preference. Many also use digital gold platforms for convenience and safety. Alternative Investments – PMS, AIFs, and Startups HNW NRIs are showing interest in Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs), especially for exposure to unlisted equity, private credit, and pre-IPO startups. They are increasingly investing via syndicates or curated VC platforms. Q) Which sectors are more preferred when NRIs look to invest in India? A) NRIs continue to favour sectors that combine high-growth potential with long-term stability. Their top picks are influenced by India's structural growth, digital transformation, and global positioning. Financial Services & Banking This is a long-standing favourite due to India's deepening credit markets and consistent reforms. Banks, insurance firms, and fintech companies are seen as strong plays on India's consumption and economic growth. Technology & Digital Economy India's booming IT and startup ecosystem makes this sector very attractive. NRIs are drawn to tech-based mutual funds, unlisted equity deals, and startup syndicates. Sectors like SaaS, AI, and digital infrastructure have seen increased foreign-origin participation. Real Estate & REITs With prices stabilizing and rental yields improving, the Indian real estate sector—especially in top cities like Bangalore, Hyderabad, and Pune—is drawing NRI capital. Energy & Infrastructure With India targeting net zero by 2070, renewable energy is a hot sector. NRIs are increasingly exploring green bonds, ESG funds, and infrastructure-focused ETFs, especially after India's G20 green finance commitments. Q) What about luxury items – art, cars, watches which of the themes are hot favourites? A) All of these luxury alternatives are seeing a rising trend across the globe. Primary reason being they have a dual value of being investments as well as status symbols. Watches have become mainstream over the past few years, as the younger generation looks at them not only as collectibles but also as return generators. As more and more niche watch players continue to create limited edition and heritage time pieces, they are gaining a significant traction across the UHNI communities as a status symbol as well as an investment option. Art has also witnessed an upsurge in India and abroad over the past few years. In 2023-24, Indian modern and contemporary art auctions crossed Rs 1,000 crore in sales value, a historic high. NRIs are increasingly viewing art not just as décor but as a long-term appreciating asset. Each of these sectors reflects the evolving wealth mindset of NRIs—where lifestyle, heritage, and financial return intersect.
Economic Times
13-05-2025
- Business
- Economic Times
NRI Talk: Why NRIs in Dubai and Singapore pay zero tax on mutual fund gains, Nitin Aggarwal explains
In this edition of NRI Talk, Nitin Aggarwal, Director of Investment Research and Advisory at Client Associates, breaks down why NRIs residing in countries like Dubai and Singapore pay zero tax on their mutual fund gains in also shares valuable insights on why India continues to be a top investment destination for NRIs, common pitfalls to avoid, and the sectors they're most bullish on. From tax advantages under DTAA to the long-term wealth mindset of global investors, this conversation offers a deep dive into how NRIs are approaching India's growth story. Edited Excerpts - ADVERTISEMENT Q) Thanks for taking the time out. How are NRIs looking at India as a long-term investment destination? And, what are the other hot countries which they invest in?A) India is one of the most preferred markets for the long-term investments for NRIs. Several clients have increased exposure to India in recent years as there is no country other than India with strong and stable economic growth prospects. Q) There is big debate on social media about taxation. Help us understand why NRIs In Dubai, Singapore & Mauritius have to pay zero tax on mutual fund gains? A) The debate stems from a recent ruling by Income Tax Appellate Tribunal (ITAT) where it ruled that under the Double Taxation Avoidance Agreement (DTAA), NRIs are not required to pay long-term taxed on mutual funds gains and these should be taxed in the residing countries. And since some of the countries, such as UAE, that India has DTAA do not charge capital gains, the NRIs in those countries will effectively pay Zero tax on gains from mutual fund investments in India. Q) What are the big mistakes which NRIs should avoid when making investment in India? ADVERTISEMENT A) We always advise to understand the risk associated with the investments. We advise using a balanced approach instead of just chasing returns.Q) What is the money mindset which NRIs follow. Are there any common attributes? ADVERTISEMENT A) Most of the NRIs that we engage with have a long-term investment horizon. They are looking to build wealth through compounding over the long-term. Q) Which investment options or asset classes are hot favourites of NRIs and why? ADVERTISEMENT A) Most of the NRIs are looking to diversify their exposure by building positions in high growth, stable economies. Q) Which sectors are more preferred when NRIs look to invest in India? A) Currently we are favouring financial services and consumption driven sectors, and that is what we are advising out clients to allocate money too. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
13-05-2025
- Business
- Time of India
NRI Talk: Why NRIs in Dubai and Singapore pay zero tax on mutual fund gains, Nitin Aggarwal explains
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In this edition of NRI Talk, Nitin Aggarwal, Director of Investment Research and Advisory at Client Associates, breaks down why NRIs residing in countries like Dubai and Singapore pay zero tax on their mutual fund gains in also shares valuable insights on why India continues to be a top investment destination for NRIs, common pitfalls to avoid, and the sectors they're most bullish tax advantages under DTAA to the long-term wealth mindset of global investors, this conversation offers a deep dive into how NRIs are approaching India's growth story. Edited Excerpts -A) India is one of the most preferred markets for the long-term investments for NRIs. Several clients have increased exposure to India in recent years as there is no country other than India with strong and stable economic growth prospects.A) The debate stems from a recent ruling by Income Tax Appellate Tribunal (ITAT) where it ruled that under the Double Taxation Avoidance Agreement (DTAA), NRIs are not required to pay long-term taxed on mutual funds gains and these should be taxed in the residing countries. And since some of the countries, such as UAE, that India has DTAA do not charge capital gains, the NRIs in those countries will effectively pay Zero tax on gains from mutual fund investments in India.A) We always advise to understand the risk associated with the investments. We advise using a balanced approach instead of just chasing returns.A) Most of the NRIs that we engage with have a long-term investment horizon. They are looking to build wealth through compounding over the long-term.A) Most of the NRIs are looking to diversify their exposure by building positions in high growth, stable economies.A) Currently we are favouring financial services and consumption driven sectors, and that is what we are advising out clients to allocate money too.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Economic Times
10-05-2025
- Business
- Economic Times
NRI Talk: Three generations, one table - how Asia's wealth boom Is reshaping family governance, says Lim Ping Ping of LGT Group
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads 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? Tired of too many ads? Remove Ads 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 surge in affluence is not just creating more high-net-worth individuals—it's redefining how families manage, transfer, and preserve wealth across 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 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 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 presents significant opportunities but also unique challenges for family 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 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 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 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 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 and privacy concerns must be met through a clear articulation of family office's AI usage terms and 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 looking family offices understand that governance structures for the family office ecosystem should include frameworks that articulate the AI adoption strategy, integration, usage and 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 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 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 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 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 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 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 can be the bridge between founder and future generations – no matter how different the worlds in which they were 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 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 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 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 use these transition phases to design appropriate structures for intergenerational learning and involvement. We institutionalise learning in the family ecosystem through our bespoke education 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 most resilient families see tax strategy as an expression of broader family families of sustainability, compliance and 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 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 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 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 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 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 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 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)
Time of India
10-05-2025
- Business
- Time of India
NRI Talk: Three generations, one table - how Asia's wealth boom Is reshaping family governance, says Lim Ping Ping of LGT Group
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. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 90s Icon: A Look at Her Today I Am Famous Undo 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. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. 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 - Live Events 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? A) 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. 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. A) 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 anchor 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? A) We 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. 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? A) 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. Q) In what ways are family offices evolving their philanthropic strategies to align with the values and interest of younger generations? A) 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 giving Q) How are family offices managing the increasing demand for alternative investments, such as private equity and venture capital, within their portfolios? A) From 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. ( Disclaimer : Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
