[Insights Article] Keep Calm and Carry On: Reflections on 2022 and Beyond

As we near the end of 2022, most parts of the world have entered into a post-pandemic normal. This includes Hong Kong, which is gradually loosening COVID restrictions. At the same time, new threats emerged alongside persistent uncertainties, such as the war in Ukraine and other geopolitical tensions, soaring inflation, high interest rates and the rapid decline of equity prices worldwide.

Amidst this turbulence, it has been a challenging year for high-net-worth individuals (HNWIs), who should give thought to managing financial risks and business strategies while adjusting their personal wealth management approaches in a timely manner. According to a wealth report study by Wealth-X, the global ultra-high-net-worth population (UHNW) has fallen for the first time in four years. While the UHNW population in Asia fell to 3.9%, Hong Kong remained in first place as the city with the highest number of UHNW individuals, though there has been a drop by 6.8%.

Undoubtedly, this has profoundly impacted the needs and demands of the HNWI market. For one, the focus has shifted from wealth accumulation to wealth preservation. For that purpose, HNWIs have sought out different tools to do so, such as further increasing geographical and asset class diversification in their portfolios. In addition, insurance policies have emerged as an important weapon, as it is one of the most direct methods of risk transference. Given the complex interactions of these shifts, there has been an increased demand for professional partners who can provide one-stop shop services, as the concentrated nature of such offerings facilitates efficient, holistic advice.

As 2023 approaches, we foresee a number of market trends and opportunities available for HNWIs. First, the premium of life insurance largely remains the same as the pre-COVID-19 level although the pandemic has led to a dramatic loss of human life. As such, there is likely a short window for HNW families to increase their life insurance coverage to better protect family members.

Second, we expect that conventional life insurance products such as universal life or whole life products offered by insurers will begin to pick up again among HNWIs, as those products have an investment savings element and low premiums which contain a flexible-premium payment option given current interest rate hike.

Lastly, the HNWI demand is increasing for specialist services such as family governance, children’s education, tax planning, migration consultation and business succession from family offices. As clients often need to manage businesses across multiple jurisdictions, they are looking for consultants with an international footprint and the ability to provide holistic advice.

Lioner pioneered the 3-in-1 model, which has been proven to benefit HNW families in today’s uncertain world. Riding on the new office opening in Singapore and future expansion in Mainland China, Lioner continues to strengthen its services and deepen its solution offerings to fulfil clients’ evolving needs. Lioner’s tailor-made wealth management approach and its commitment to tackling changes in a responsive manner helps clients to carry on through uncharted waters.