Trust regulation is on its way — is this good news for Hong Kong? The question should really be — is it good news for the trustee services business in Hong Kong, or the consumer, or both?
Professional trustees operate as businesses and will always look to balance fees and operating costs, whereas the consumer (i.e. the potential settlor) is principally looking for value and peace of mind. Greater regulation in many offshore financial centres has brought greater costs which the larger trustee companies can more readily absorb, leaving the smaller operators less able to compete and looking for business partners or outside investors such as private equity firms. Proposed new regulation in Hong Kong, concentrating on standards of service and AML compliance, will no doubt lead to better and more secure trustee services for settlors, but with higher costs reflected in trustee fees, further industry consolidation and fewer providers from which to choose.
To learn more about increasing regulation of offshore trustees, click through to the button link below (on page 35) for an opinion by Richard Grasby.Trustees Under Pressure [PDF, p.35]
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