Hong Kong Emerges as Magnet for Financial Firms Targeting Wealth Management and Family Offices

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Hong Kong’s financial landscape is experiencing a surge in interest from financial services providers, positioning the city as a focal point for wealth management and family office opportunities. Despite a backdrop of local brokerages winding down, the Securities and Futures Commission (SFC) has reported a notable increase in applications for financial services licenses in the third quarter.

During the July to September period, the SFC received 2,017 applications from 1,972 individuals and 45 companies, marking a 13% rise from the previous quarter and a 6% increase compared to the same quarter last year. Notably, in November alone, the SFC greenlit 17 new financial firms to establish operations in Hong Kong, spanning securities trading, asset management, and corporate finance.

“This reflects a structural change in Hong Kong’s financial markets,” remarked Oliver Ng, Managing Partner of Digiwealth Consulting. He noted that while some small brokers closed due to owners’ retirement decisions, a fresh wave of global entrants is eager to leverage emerging opportunities in corporate finance and asset management.

Among the newcomers, Landmark Family Office commenced operations this year, offering a spectrum of services, including wealth management, succession planning, and charity establishment for affluent clients.

Cameron Harvey, CEO of Landmark Family Office, emphasized Hong Kong’s strategic importance, stating, “We chose Hong Kong as our strategic headquarters after careful consideration. When you also consider the supportive government initiatives for family offices, the world-class regulatory regime, and ease of doing business in Hong Kong, it only makes sense.”

The Hong Kong government has implemented various initiatives to fortify its standing as a wealth management hub, including tax breaks and an investment migration scheme. The efforts align with Chief Executive John Lee Ka-chiu’s target of attracting at least 200 family offices by 2025.

Despite local brokerages witnessing closures, the influx of new financial firms is reshaping the landscape. Digiwealth’s Ng highlighted that these newcomers offer a broader range of services beyond stock trading, encompassing asset management and corporate finance. The emphasis is on using Hong Kong as a gateway to facilitate client investments in mainland China, the US, and other global markets.

The decline in market turnover and daily trading volume highlights the challenges faced by small brokerages relying solely on stock trading commissions. However, the optimism of new entrants, coupled with Hong Kong Exchanges and Clearing’s (HKEX) efforts to promote international listings, is fueling confidence in the city’s appeal to international investors. HKEX’s recent establishment of offices in New York and London underscores its commitment to positioning Hong Kong as a premier destination for overseas companies seeking listings.