More high-net-worth (HNW) families in Hong Kong and mainland China are setting up family offices as a way to manage their assets and address any potential challenges of passing these assets down to the next generation, according to a recent KPMG report.

“An increasing trend in mainland China, and even more so in Hong Kong, is establishing a family office to operate the family business and manage assets,” says Karmen Yeung, partner, KPMG Private Enterprise in China. “Family members often don’t have the knowledge to work through governance, legal, tax and succession issues and, therefore, are looking for outside expertise. Especially for families that have assets in multiple countries, the family office model can help them to better understand and manage the complex rules they are subject to around the world.”

The report also highlights how the impact of the Covid-19 pandemic could increase the pressure on families in the coming years and argues that the pandemic has added to the urgency of managing family businesses and carefully planning generational transfers.

“The impact of Covid-19 is also prompting families to take stock of the sense of purpose and values of their business,” says Tom McGinness, global leader, private enterprise family business, KPMG Private Enterprise, UK. “Family businesses tend to take a long-term view and have a strong sense of community. Increasingly, families are considering the broader societal impact of their business and their role in addressing issues from climate change to inequality and education.”