Family Wealth Report speaks to Withers about its recent expansion in Asia.

Withers Bergman recently established a Formal Law Alliance with Singapore-based KhattarWong, enabling the two firms to provide US, UK and Singapore legal services through what will operate as Withers KhattarWong in April.

The move represents a strengthening of ties between the US and Asia as a part of a wider trend of globalization whereby individuals – particularly wealthy ones – are increasingly international, with business and personal interests abroad.

While the world may feel like a smaller place, financial needs, at both the enterprise and individual level, have become more complex. This has created enormous opportunity for the wealth management industry, particularly given how the sector’s landscape differs across various global regions, driven, among other factors, by rates of wealth creation. 

The Singaporean market is young, although beginning to experience the strains of generational change. The explosion of wealth there is however largely in the hands of first-generation individuals, Ivan Sacks of Withers told Family Wealth Report. Planning for family business succession and governance are hot topics in Asia-Pacific today.

By contrast, the US has a longer history in terms of the development of a family office market, with many looking to Asia for direct and long-term investments.

“Another thing that is very true about the market in Singapore is that it is very mobile – many individuals are immigrating, emigrating and making investments in the US,” Sacks, who is the New York-based global chairman at Withers, said.

In his words: “They are slightly different markets – but they're seeking connections with each other.”

Highlighting this as a growing trend, Citi Private Bank’s North America Asian Clients Group recently expanded into a fourth US market - Seattle, WA – in a bid to capture additional market share from what it said is “one of the world’s fastest growing ultra high net worth segments.”

Indeed, Asia-Pacific recorded the biggest increase in high net worth individual population, at 17.3 per cent, according to the World Wealth Report 2014. This growth also narrowed the gap on North America—the region with the largest HNWI population at 4.33 million—to just 10,000 individuals. As predicted in the 2013 report, Asia-Pacific is expected to have the largest high net worth individual population by 2014 as well as the most wealth by 2015.

Growth in the region is creating opportunity for firms such as Withers to “add value for clients” who are, for example, looking to send their children to school in the US, seeking immigration visas or citizenship there or elsewhere – and indeed vice versa – said Sacks.

“We are in a phase that is very challenging today because all sophisticated advice to families of significant wealth today implicates international issues,” Sacks said.

“Families are increasingly international whether on a personal level or residential level, with marriages, moving for work, or investing for diversification, etc. That pulls you into areas that are very demanding such as in tax compliance, property regimes and forced heirship. There is a lot of exposure for those that are investing across borders, so they need to make sure they do it right.”

Withers KhattarWong
 
With offices already in Hong Kong and Singapore, the alliance has created a “permanent commitment to local capability” for Withers, Sacks said.
 
Withers' Singapore office has nine lawyers, including six partners, offering tax and estate planning, corporate, cross-border dispute resolution and arbitration advice.
 
KhattarWong has over 70 attorneys in practices including banking, finance and property; corporate and securities; criminal litigation; intellectual property and technology; litigation and dispute resolution; and tax and private client.
 
Through working together as Withers KhattarWong, the alliance will offer corporations, institutions, individuals and families in South East Asia a range of wealth planning, litigation and arbitration and commercial legal capabilities.
 
Crucially, these services, according to Withers managing director, Margaret Robertson, are currently “not adequately provided in the market.”
 
And yet Singapore is, “without question,” the financial and legal center of South East Asia and has the highest concentration of millionaire households in the world, noted Withers’ Singapore office head, Jay Krause, when the announcement was made earlier this month.
 
“This alone is enough to illustrate its importance to us, which only stands to increase as other economies in the region reach critical mass and seek to engage more fully with the global economy,” Krause added.

“The creation of Withers KhattarWong follows closely on the launch of Withers SBL, our new alliance in Australia and, taken together, these developments give us a substantially more significant presence through which we can assist clients in this hemisphere.”

As part of the move, the entire KhattarWong partnership will also become partners at Withers.
 
Sacks said Asia is currently the fastest-growing region at Withers, although it is still the smallest by absolute numbers.
 
“With this move we could expect it to continue to grow,” he added. “The demographic of wealth is exploding there; we're trying to go where our clients' needs are.”
 
Long-term, Withers anticipates that a third of revenues will come from Europe, a third from the US and another third from Asia.