The 16th annual World Wealth Report published by Capgemini has confirmed what was already in the minds of most private wealth managers: For the first time possibly in modern banking history, there were more high net worth individuals (HNWI) in Asia-Pacific than any region in the world. A staggering 3.37 million high net worth individuals in Asia-Pacific edged out North America’s 3.35 million.

However, is the Asian growth miracle limited merely to topline growth rates and record breaking number of millionaires?

 Where philanthropic giving is concerned, Asia is very much still in the nascent phase. While no conclusive comprehensive data exists to track donations across Asia, most expert reports point to the fact that when it comes to philanthropic giving, generally, Asian countries fall way behind mature markets such as US and UK. The UK-based Charities Asia Foundation ranks China, one of the fastest growing Asian economies, in 140th position on the index of the world’s most generous countries with US, Ireland and Australia taking the top three spots.

 However we believe the macro environment in Asia is set to accelerate the growth of philanthropy in the coming decade. There are a couple of key drivers in our view:  Asia is poised to remain the fastest growing HNWI region in the world. With the domestic economies becoming more dynamic and affluent, Asian HNWIs are in a better financial position to contribute back to the society in which they live. Hence, we expect the culture of philanthropy to grow going forward.

 There is a growing awareness among Asian HNWIs and the community on philanthropic giving. For instance, One Foundation which is set up by China celebrity movie star, Jet Li, has inspired many similar initiatives albeit on a smaller scale across China. Closer to home, both the Lee Foundation and Shaw Foundation have also inspired an increasing number of HNWIs to include philanthropy as part of their long term wealth management strategy. Likewise, in India, the Tata family which has received accolades such as the Andrew Carnegie Medal of Philanthropy continues to relentlessly challenge similar members in India’s ultra-rich club to do the same. Annual ranking of generous philanthropists such as the Hurun Philanthropy List in China also help to raise the profile for philanthropy in emerging high-growth countries. Such profiling further promotes a culture of giving as it celebrates and recognises the efforts of donors, NGOs and support networks.

The inevitable demographic shift towards younger HNWIs who have either been educated in the West or been exposed to Western approaches towards charitable giving have also given birth to a new generation of philanthropists. They are not just keen on giving money, but also play a more active role in formulating strategic philanthropy initiatives that place more emphasis on achieving innovation, efficiency and sustainability, in the hope of creating long term value for the society. They are also more likely to break free of the shackles of the traditional cultural distaste of overt displays of wealth that may be linked to substantial philanthropic giving.

 Similarly, as we see younger and better educated HNWIs getting involved in the management of their family businesses and wealth, we expect the demand for family office services to rise. Family offices allow ultra-high net worth families to adopt more sophisticated wealth planning and management solutions in the preservation and transfer of wealth to the next generation. It typically extends beyond conventional private banking model.

In Asia, what makes it particularly challenging for family office businesses, is the propensity for Asian entrepreneurs to maintain a tight rein over their investments and an almost unfettered, patriarch-infused “control” culture on their wealth management and family business activities. Coupled with a strong desire for confidentiality, it often results in an unwillingness to give anyone, including family members, full disclosure of their wealth. This dominant “control” culture has historically worked against the growth of Asian family offices in the traditional sense as how it is being practiced in Europe and US. In Europe and US, family offices are seen more as co-managers and less as pure information providers and gatekeepers for ultra-rich families.

Increasingly, there is anecdotal evidence suggesting that more multi-family office companies from Europe and US may be slowly inching their way into Asia. This would certainly pave the way for the development of more dynamic hybrid models of family offices that can provide a wide range of wealth planning solutions through their collaborations with professional advisors that can advise on family office governance, tax and legal, structural and management issues.

 Be it establishing a philanthropic foundation or family office, it is important to work with private wealth or family office professionals that can offer a seamless and integrated platform that ensures your overall wealth planning and philanthropic objectives are met.

Lee Woon Shiu is Head of Wealth Planning (Trust & Insurance) at Bank of Singapore