For ultra high net worth Chinese families, the ongoing economic globalization is an unprecedented challenge,but also an opportunity.They need optimal international practice strategies to manage their enterprises so they can expand their businesses into overseas markets, keep domestic and overseas assets independent of each other and deal with the multi-jurisdiction tax system. At the same time, their social responsibilities are also steadily increasing in line with their greater influence. In the ten years ahead, ultra high net worth families’ enterprises will pass into the hands of the next generation, but it remains a critically important question as to how to maintain the cohesive force of the family and ensure the inheritance process is smooth. In short, how do we realize the sustainable succession of a business empire?

As we know, more than 80% of jobs in China currently are created by private enterprises and the rate will rise in the future. Hu, Xueyan and Shi, Zhengrong are two examples of highly successful Chinese business leaders in the modern era who lost their wealth for various reasons. If 70% of privately run enterprises can’t be successfully handed down to the next generation, the Chinese economy will suffer. In addition, nearly 70% of Chinese household savings are possessed by wealthy private enterprises. Most of their wealth has been earned through their own hardwork, and its loss would be a source of great pain to them.

For many prominent families in the world, the Family Office becomes an indispensable core institution once their family enterprises grow big enough.  Family Office can provide them with professional family inheritance plans, as well as hundreds of services directly or indirectly related to wealth, such as asset allocation, children's education and health management services they really need, so it plays an important part in these people's lives. It is a genuine family “CEO”. The Family Office industry has existed in Western countries for a long time. It is a professional organization providing private, high-end and customized services to ultra-rich families. In China, the Family Office is still a new concept, but that doesn't mean prominent Chinese families don't need it. In fact, the requirements of China's rich for asset liquidity, immigration and diversified asset allocation are much higher than those of their Western counterparts. However, Family Office model directly copied from the West may not to be suited to the local market due to various differences, and it therefore would notwork well in solving the practical problems arising in family inheritance.

We spent half a year in 2014, inviting famous international Family Office experts to share their knowledge and establishing a set of service systems tailored to the demands of ultra-rich Chinese families. Thus, the first Chinese Family Office Industry White Paper,with the mission of “creating a family legacy and establishing an everlasting enterprise” came into being. The emergence of this White Paper is undoubtedly good news for the ultra high net worth Chinese families. Why?

We have developed for ultra high net worth families “the wealth ecosystem”, which combines mature Western family inheritance plans with characteristics that address Chinese needs, and integrating products, services and advice. In such a system, the Family Office isn't the only organization serving ultra high net worth Chinese families. Other organizations, including banks, trust companies, law firms, accounting firms and privately offered funds, all work for ultra high net worth families directly or indirectly to realize sustainable family inheritance. HMCFO has also developed the concept of a “3+1+1 Service Platform”, which means the HMCFamily Office cares not only about people’s tangible assets but also their intangible assets, such as health, children’s education, family harmony and family inheritance, etc. This type of service has two distinctive features. First, it is highly customized. Plans are made in accordance with the families’ different situations and the global political and economic environment. At the same time, the custom-made “HMCFamily Inheritance and Management System” is based on a comprehensive understanding of each family’s situation. Of course, all the information is kept strictly confidential. We aim to make successors happy, as well as helping them inherit the family money, stock rights and other various assets. After all, wealth is supposed to bring people joy and happiness,not stress, worries and fatigue. The second feature is systematic quality management, which guarantees the quality of family inheritance. Just like 3D printing, it’s a very complicated process but standardized to ensure quality. In other words, the system is not as simple as establishing an asset management or family inheritance plan.

As the first White Paper in this industry in the world, the Family Office Industry White Paper not only offers a clear description of what a Family Office should be and provides standard specifications, it also establishes a benchmark and sets up a supporting system for family inheritance for the wealthy. At the same time, it also provides direction for the whole industry in helping more and more prominent Chinese families realize the goal of “creating a family legacy and establishing an everlasting enterprise”.