The Great Wealth Transfer

Hello. Good afternoon, ladies and gentlemen. Very happy to be here. Stefan, are you ready?

Amazing.

Amazing.

Good to be here. And uh it's very exciting to feel the energy and optimism of this amazing city.

Yes. Thank you. So, a bit of introduction about myself. Uh my name is Chman Kuan. I'm the group CEO co-founder of Raffles Family Office Group.

Um I'm also the founding chairman of Family Office Association in Hong Kong, the president of Hong Kong Business Association. So what it means is I can be very biased in the news when I'm talking about Hong Kong. But today since I'm in Abu Dhabi, I'm going to speak with a free mind and also uh very very very hard to be funny today to make fun of you on stage as well. So Stefan shall we get started?

Sure.

So today we are talking about the great transference the about a lot of money big numbers 84 trillion. Yeah. But I think I would really like to get to know you and for the sake of the audience I think is very important. uh to set the context right Stefan here a good friend of mine also Arsenal fan unfortunately he works for this company called Julius Bear which happened to be one of the oldest most established Swiss bank today and it's got a very interesting history it's co-ounded I mean founded by Mr. Julius back and in 1890 if I'm not wrong.

Yes.

And the family literally run it for 120 years and in 2005 they decided to hand it over to a independent professional like yourself. So really I would like to get to know you you know Stefan your job before or your role what do you play because I do know that you did have some encounters coming to this part of the world many years ago. So Stefan please. Thank you. Um look this is not about me this is about Judas Bear and the great wealth transfer but uh you know in a nutshell um I have um feel very privileged that I took on this role at the beginning of this year.

It's a great story institution and uh I have had a 25 year odyssey traveling around living in Luxembourg, London, New York, Hong Kong and uh at some great institutions and hopefully this will uh help carrying the bank into the next uh decades because to me this job is uh what it used to be for family members. It is uh handing off Julius Bear when I do that in a better shape than I found it.

Yes. And what is the key difference? Can you give us one key difference? 20 years ago when you first came to this part of the world, what's the difference between then and today?

Yeah, look, I've been coming here for uh two three decades and of course the change has been enormous. Uh I think what has remained the same is uh the family values uh are extremely strong and uh I think the leadership here has been extremely thoughtful in building uh Abu Dhabi in uh the right way and uh we are personally and I'm personally and we are as an institution really excited to be a part of the community here but you know a lot has changed at the same time as for us uh this is not a transaction this is a relationship. So, uh we're here for decades and u and so if uh right now Abu Dhabi is very hot or not is not so important to us for what is important to us is that uh we here for the long run.

Thank you. Thank you. And so the main number 84 trillion in the next two or three decades and I come from Hong Kong. I know some numbers in Asia and in Asia we are talking about greater China specifically we are talking about four to 500 billion being change hands and that so happened to be about the foreign reserve of Hong Kong government. So when I meet the Hong Kong government financial secretary, the one of the quick uh you know tricky question I always ask what will happen and how would you feel if today you are managing this four or$500 billion dollars for Hong Kong government and you hand it you got to hand it over within a year to the next generations of leaders and you do it for 30 years straight.

Now for for for the world is between 84 to maybe 120 trillion. what do you think is a trend and what do you see? So whatever the number is 75 125 trillion let's take 100 trillion as a midpoint uh the I think first you should contextualize that as you just did uh with whatever your countries I mean UAE has half a trillion GDP France has three US has 30. So no matter which country you compare it to the numbers are staggering and uh so first what is different this time is the scale. The second that is different is that when uh wealth is getting handed over which is mainly from the baby boomers uh to the millennials of course the baby boomers were operating in a fantastic economic environment and arguably now it's going to be a lot tougher to continue carry on your business the way you used to over the last decades given the disruption from AI and other things.

So that is for sure very different. Technology plays a huge role and most important I think what is very different this time is uh the values. If you think about um the patriarch or matriarch of most uh corporations they were very focused on legacy. A lot of the next generation focuses on lifestyle. If you think about um the way they were running their business it was all about control.

Now uh in many cases it's about liquidity and I can tell from you from my personal experience uh the and the experience as we had as a as a bank we were [clears throat] a family-owned business as you said for a long time in 1980 we became the first uh Swiss private bank to list on the exchange and it took until 2005 uh to create this uh one share one vote uh ownership structure that then meant that the family gives of control. So for 25 years the family was doing what we see here in the region having a listing about keep control and then over time thinking about uh when uh to give up control and uh this is a a very difficult u process uh that uh we went through. We have a lot of experience working with families around the globe in thinking how to overcome this and um get it right because I can tell you if um you involve uh your children which many of our clients have done at the age of 7 10 12 and you get them familiar with what it means what responsibility they have and what uh is their expectation you're most likely going to do this much better than uh if if you wait for too long and uh because ultimately this is a journey this is not a transaction and I think that's really where u we see most of the issues happening because then the second generation rejects the the values of uh the previous generation and uh and things can be turn quite messy.

Yeah. and and you know with the 140 years of history I'm sure you have dealt with many families especially cross generations and according to research that I have read recently about 40% of the next generation of wealth owners the the one of the first thing they do is to get rid of the private bankers so from your perspective is there any insight you can share with us what are they expecting that is different the new generation they might be the second or third or the fourth but what is it that they on is very different and how do you cope with that the change in demand of service and maybe the way they communicate as well?

Yeah, absolutely. I mean what I meant before when I said uh status versus values uh if you think about uh legacy versus lifestyle, if you think about control versus liquidity, what I mean with that is that uh and we again went through this uh actually in Julius Bear, we became a little bit a victim of our own success. uh Julius Bear became extremely valuable and so it became very difficult for individual family members to buy out others to keep the number of controlling shareholders at a small level and uh this was one of the reason that that ultimately led to give up control. So uh this is uh for sure a uh an issue that uh we see particularly in this part of the world because the wealth generation uh is uh the wealth generating that's been generated is uh is extremely high. So what is uh different as said before this um you have to offer obviously a better digital experience.

You have to offer more access because uh the next generation is more mobile international more independent uh more focus on their personal ambitions. Uh uh ESG plays a big role sometimes digital asset other things uh and you have to get ready for it. Uh so for example we are the first uh bank that got a license in the DIC to uh cost the crypto assets. These are the type of things you need to do to cater for the next generation.

Yeah.

But then ultimately it's about working with intergenerationally between the matriarchs and the patriarchs and their children to make sure there's a common understanding and you're on this journey together.

Yeah. and and in in Asia my observation is you're always talking about Hong Kong and Singapore and of course Switzerland as well the powerhouse but has the second generation or next generation talk about this part of the world UAE specifically Abu Dhabi yeah look I think here the the problems are no different uh it's uh it's a things I outlined I would say all else equal there's definitely even more a focus on uh technology given many of the generations skipped some of the initial steps that maybe families in Europe went through. So there's a big focus uh on AI how we can use it uh how can we make it accessible to our clients and of course uh for us uh this is uh both a challenge but I think also a massive opportunity because if you think about in five years who's going to still code I think there's just going to be code acceptance who is still going to write a legal contract we'll just review contracts that have been generated uh by an LLM so massive opportunities for us um to uh be more responsive uh and have uh better experiences for our clients. And uh even today, for example, we have a recommendation a recommendation engine that automatically generates ideas for our clients at a fingertip for relationship managers. So that have instant click to trade experience very smooth.

And this is the type of thing that particularly in this part of the world I hear a lot that clients want.

Yeah. And it's interesting, you know, with such a long history in Switzerland and I'm from Asia, Hong Kong. And now we are meeting here and I know that understand that you have a very exciting news that just being announced this before we came in literally.

Absolutely. It's about half an hour old. Uh we uh just granted our license here. Uh so we're going to be in the ADGM uh from today uh onwards. We're very happy to be here.

I mean this is a great great ecosystem as you know that it's fantastic from a personal tax point of view but also from a corporate tax point of view that you can have full ownership of your corporations golden visas residencies uh and just a fantastic ecosystem that u has been built over the last few decades and uh we're really excited to be here and of course also we see it as our responsibility to contribute to this ecosystem by helping uh the families here that control the majority of uh the businesses uh to uh think about uh things like intergenerational wealth transfer or family governance. Thank you. And and really you know I think I share the same insight as well when when I'm here I've been here for a few years now. I was speaking last year as well. I think the one thing I I has never failed to surprise me is the changes and is for the better.

I think this this just for this event is so impressive every year and it's get bigger and bigger and every

coming as well to Abu Dhabi

of course next year you know it's funny like you know we are from different part of the world in the kind of in the same industry but at the same time we're coming here and we reverse our role that's very that's very funny I mean more news to be announced next next next year early next year about raffles group so Abu Dhabi I'll see you here next year as well every other we're going to meet here more often Then yeah, so we have 30 seconds left. Uh I've been advised and by the front rows audience about asking tough questions. So I'm going to ask you a very tough question of interesting one. When you go back to Switzerland and you receive a call and at the same time the two person calling you, one of them is a exe executive chairman who's running the show and one of them is Mr. Bear.

Who would you answer first? So as you know uh nobody has a favorite child. So uh this will be the same here. So we have an amazing uh new chairman sir no Quinn with lots of relevant experience uh that uh to me personally I'm really grateful for at the same time we have Raymon bear as our honorary chairman extremely active very involved uh and of course uh the values and culture is a bedrock of any institution and uh he has been incredibly helpful passing on these values uh to me and uh our team. So I'm really grateful for both.

So thank you. So ladies and gentlemen, 140 years Swiss Corporations, the chosen one, Stefan Ballinger. Thank you very much. Thank you.