For more information contact: emailus@marcusevans.com An interview with Roger King who is the Professor and Director at the Tanoto Centre for Asian Family Business and Entrepreneurship Studies, HK University of Science & Technology and also a speaker at the marcus evans Private Wealth Management APAC Summit 2013, discusses being sensitive to cultural differences when managing private wealth. Join the 2014 Summit along with leading regional family offices and wealth advisors and international fund managers and consultants an intimate environment for a focused discussion of key new drivers shaping wealth preservation and investment strategy. For more information contact: emailus@marcusevans.com

1. Interview with: Roger King,
Professor, Director, Tanoto Centre
for Asian Family Business and
Entrepreneurship Studies, HK
University of Science & Technology
“Different cultures have different
expectations. The Chinese have a saying
that private wealth does not last
beyond three generations. The question
is why? To break this three generation
curse, we need to identify and
understand the unique aspects of each
culture and learn from each other,” says
Roger King, Professor, Director, Tanoto
Centre for Asian Family Business and
Entrepreneurship Studies, HK University
of Science & Technology.
A speaker at the marcus evans
Private Wealth Management APAC
Summit 2013, in Macao, Asia Pacific,
28 - 30 October, King discusses
why cultural sensitivity is critical in
private wealth management for
understanding how decisions are made.
Why must private wealth managers
be very sensitive to cultural
differences?
Many of us do not expect wealth to last
beyond three generations for different
reasons, but I believe we must look at
each culture differently and consider
whether adjustments are possible to
break that three generation curse.
Would you say the Chinese are
more “cursed” than others in the
region?
Most wealth in China is retained in the
family business structure. Why do
Japanese family businesses last for
centuries whereas Chinese ones do not?
Firstly, the political system in Japan has
been reasonably stable over centuries,
whereas the Chinese and Indians have
been colonised by other cultures. When
there is no stability, people do not make
long-term commitments or investments
and are ready to leave the country if the
regime changes.
A second key difference is the
inheritance system. In Japan a single
person inherits the entire estate, known
as Primogeniture. In Chinese culture,
the male descendants share the wealth
almost equally. It is easy to see how
wealth can get dissipated in a few
generations. In addition, in the old days
it was quite common for Chinese men to
have multiple wives giving rise to many
more descendants. This is a stark
contrast to primogeniture.
How do these cultural differences
impact wealth management?
Many of the wealthy individuals in China
became millionaires or billionaires in a
very short period of time within the past
20 years. Private wealth only came
about in the 1990s, so most are now
transitioning from the first to the second
generation.
As it is all relatively new, the next
generation is lacking a value system
that would help sustain that wealth.
Many of them do not have the notion of
continuity. They do not feel secure. One
of their most desired asset is an
American passport or green card, so
they can leave if something happens in
China.
That is a challenge for us. Most of their
wealth is due to business success, so
they think they know how to manage it
by themselves and do not accept
advice. History has taught them not to
trust anyone from outside their clan or
family, so why would they trust
someone else to manage their wealth?
The younger generation is often
educated abroad, but when they return
with a more Western management style
or thinking process, which have their
pluses and minuses, they create a
cultural clash within the family itself.
Asians tend to do things collectively, as
a family unity. Western culture is more
individualistic.
On the other side, organisations are
much more structured in the West and
family wealth is often separated from
the family business wealth. Having a
single pool of resources is very common
in Asia, but it is very dangerous. If the
business fails, everything goes down the
drain.
Any final comments?
Wealth managers who are familiar with
the local culture take these differences
into consideration, but others need to
be sensitive to these differences to
understand how decisions are made
within the family structure. If they go
against the grain of how tradition
operates, their level of success is going
to be diminished significantly.
In Asia
people tend
to do things
collectively
Culturally Sensitive
Private Wealth Management

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