Taking a global approach and doing business across continents is here to stay – even if it has been tougher recently, says the Global Head of Citi’s Global Client Service Money K.
Globalization has brought many economic benefits to the world in recent decades, including lifting hundreds of millions of people out of poverty, creating new business opportunities and enhancing consumer choice.
However, geopolitical polarization between the United States and China, the COVID-19 pandemic’s disruption to global supply chains and the ongoing Russia–Ukraine war have caused a partial retreat of this trend.
Amid tariffs, sanctions and supply chain upheaval, what are the implications for ultra-high net worth (UHNW) individuals, many of whom have global investment portfolios, internationalized businesses, and homes and family members across the world?
"UHNW families look at the world as a palette of opportunities for wealth preservation, as well as income generation."
Money K, Global Head of Citi Private Bank’s Global Client Service, is optimistic that the ultra-wealthy can navigate challenges to globalization – and he believes that cross-border wealth management services may help them achieve this.
"For UHNW families, thinking global is the norm," he says. "Indeed, one of their responses to, say, United States-China tensions is often to reinforce the global diversification of their investment portfolios.
"No matter what politicians or the anti-globalization movement may say, UHNW families look at the world as a palette of opportunities for wealth preservation, as well as income generation."
When home is the whole world
Citi Private Bank understands the needs and challenges of UHNW individuals as it supports about a quarter of the world’s billionaires.
Its Global Client Service provides UHNW individuals with a one-stop solution for personal and business needs via a global coverage team of private bankers and financial specialists located in North America, the Asia–Pacific, Latin America, Europe, the Middle East and Africa. These specialists provide services across commercial and residential real estate financing, investments, wealth planning services, banking and lending.
"Having deep expertise in multiple regions to provide local insights and access is only available from a global bank like Citi," Money explains.
"We are increasingly seeing demand from wealthier clients for institutional services including corporate and investment banking, trade, treasury and capital markets solutions from our global trading floors. The combination of private banking and institutional capabilities forms a powerful proposition for the world’s wealthiest clients, including their family offices."
"This generation is far more global, and when they enter the family business, they tend to look at it quite differently."
Money explains how Citi Private Bank helps scour opportunities outside of a family’s home nation and region, although UHNW individuals often feel less of an emotional connection to a single country, in terms of where ‘home’ is.
"I used to manage our Next Gen program and met a young lady when she was around 28," Money says. "I asked her, ‘So where is home for you?’ She said it was quite difficult to define. She was born in Hong Kong, moved to Canada when she was around seven, went to boarding school in the United Kingdom for secondary education before attending college and obtaining her master’s degree in the United States.
"Her friends were all over the world and her father had homes in Shanghai, Hong Kong, Canada, London and the United States. This generation is far more global, and when they enter the family business, they tend to look at it quite differently."
Some of these younger individuals ventured into startups, raised capital, listed companies and have become independently wealthy on their own. Others, Money says, are transforming their family businesses into multi-jurisdictional enterprises.
For all of them, having access to a global bank is a critical necessity, Money explains. They expect a service allowing them to be borderless in their investment and asset acquisition, so that wealth is not just preserved, but increased.
"A lot is happening in the family dynamic of these ultra-wealthy families," Money explains.
"The Global Client Service provides them coverage across the world and bankers in each jurisdiction. Citi is an easy choice because we’re in 95 countries and serve more than 1,600 family office clients."
"Our globality is probably our biggest competitive advantage. Families are expanding their horizons in terms of business. They’re setting up family offices in more than one location. When family members are dispersed all over the world, they want the wealth dispersed all over the world as well."
The future of wealth
Money says the industry needs to be ready for the Great Wealth Transfer that’s expected over the next decade. Various market studies estimate some US$84 trillion in assets is projected to be passed on to the younger generation.
"The family office mandate is not only to preserve wealth, but also to look at new opportunities to grow wealth. For example, in startups and venture capital, private equity and investing in less traditional markets as well as ESG investing," he adds.
And for those ready to pass on their wealth, a trend toward retirement locations means a worldview and pool of cross-continent expertise is essential.
"Many entrepreneurs are digital nomads now, and they are considering multiple retirement destinations," Money says.
"They need to manage their money remotely and work with a bank present in these different parts of the world. A global bank means we work as a network with the same culture so it’s easier and more streamlined for them."
Certainly, a one-stop solution for clients’ personal and business needs covering investments, banking, lending, insurance, and trust and estate planning makes sense. It's something that the caliber of clients Citi Private Bank attracts is looking for.
"The clients we serve are intelligent people running successful businesses," he says. "You must have local knowledge and local execution capabilities to help them grow their wealth."
And this is exactly why the Citi Private Bank offering continues to grow in popularity among UHNW individuals and families.
Money K leads Citi Private Bank’s Global Client Service, which offers eligible clients access to cross-border banking, financing, investments and wealth planning services across multiple global regions.