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How to Honor Family Heritage While Building Generational Wealth

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Joanne Zhong with UBS is No. 63 on this year’s Barron’s Top 100 Women Financial Advisors ranking.

Photograph by Katie Thompson

Joanne Zhong, senior vice president of UBS ’ Zhong Wealth Management Group in San Francisco, was a stranger to Western customs when she moved from Shanghai to the U.S. at the age of 10. Today, with her multicultural background and more than 15 years in wealth management, she is well equipped to help ultrahigh-net-worth international clients bridge the cultural gap on everything from family values to complex tax issues. She and her four-person team manage $2.4 billion for just 17 Asian clients living either in the U.S. or abroad. The clients have assets, and in some cases family members, based in the U.S.

Barron’s: Can you describe your practice and clients?

Joanne Zhong: Our priority used to be working with Chinese executives who were listing their companies in the U.S. But fewer Chinese companies are being listed in the U.S. They are choosing to list on the Hong Kong exchange or domestically in China. So, my practice has changed in recent years. I focus on fewer clients as a tailored family office. Our clients are all from mainland China, Taiwan, or Hong Kong. Most are first-time wealthy. We have quite a few in healthcare, pharmaceuticals, and semiconductors.

Our assets under management have changed quite a bit recently. At the end of last year it was at $4.2 billion, and today it’s closer to $2.4 billion. This is due to a huge concentration we have with a small number of clients who are founders and executives of publicly listed companies.

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What are some unique complexities of your clients’ finances?

Often, one generation of a family is still living in another country, and the second or third generation is living in the U.S. So we have to navigate the transfer of assets across two or sometimes three jurisdictions. There are nitty-gritty tax issues, and there is no single template for all clients’ situations.

One client recently bought a fine-art masterpiece, and she owns many homes between the U.S. and China. She wanted to know the optimal place from a tax perspective to hang her masterpiece. One prospect is a successful venture capitalist in China whose children are U.S. citizens. She wanted to know the easiest way to structure her estate. I said, “You are about to be extremely wealthy, and easy may not be what you want to go for.”

What cultural dynamics come into play?

One complexity is family values. We help clients with the question: How do you pass on values to the next generation when the younger family members live in the U.S.?

This is a universal challenge immigrant families face. Having moved to the U.S. at a young age, I can often understand where both older and younger generations are coming from. The desire for the younger gen to better understand and honor their heritage is often already there—the generations just need a facilitator. It’s a long-term effort that can include formal family meetings, spending time with family in person, and creating opportunities like trips, philanthropy, and workshops for the next gen to engage with their culture and peers.

Key Data

  • Team Assets
    $2,355 Mil
  • Typical Account Size
    $50 Mil
  • Typical Net Worth
    $100 Mil

How do you use your team and resources to meet your clients’ complex needs?

My team is so great, with different ages and backgrounds and experiences. Diversity helps expand our viewpoints, and it’s also important because our clients see a part of themselves in us. They feel our shared experiences.

Our clients’ complexities showcase all that UBS offers. We have resources here and beyond—in Hong Kong and Switzerland, for example. If a client has cross-border planning needs, I pull in two tax experts from within UBS—one for U.S. taxes and the other for non-U.S. We often put these two together with legal to brainstorm with clients.

What’s your approach to investing? What kind of changes to portfolios have you made lately?

While we don’t change our general investing plan, in our quarterly meetings with clients we think about investment themes to act on, with the understanding we could be wrong. But we make sure that if we are wrong, it’s only a portion of a portfolio, and if we’re right, we have a nice hedge.

The theme we started talking about early last year was inflation. At Costco , the cost of meat was going up. The cost of lumber was going up. We told clients that inflation is a genie in the bottle—once it’s out, it’s hard to put back.

What changes did you make based on the inflation theme?

We added exposure to private real estate. The idea is that in an inflationary environment you’re able to adjust rents, and rents were probably going to go up. Our private real estate investment trusts have done tremendously well from both an income and total return perspective. That alternative bucket has performed the function of being a truly uncorrelated asset class to everything else that hasn’t been working. It has been the best-performing part of our portfolios this year.

What’s the dynamic like on your team?

We laugh a lot. There are four of us, and I have a fun way of describing our roles. For example, Danyi Gu—who is Shanghai-born, studied in Germany, and immigrated to the U.S.—is our chief problem solver. Veronica Wang, who helps clients with everything from accessing private aviation or art collections, is our chief experience officer.

Do you also have an alternative title?

I like to think of myself as a family doctor, bringing in the best specialists when needed.

Were there any changes you adopted during Covid that have stuck?

During Covid, I instituted a policy that if I didn’t hear from a client during the week, I would call on Friday. I continue to do that. I want every client to feel like they are my only client.

Where do you see your practice in five years?

Last year was our best year ever. So the question is, how do we maintain that level of excellence and grow? I don’t have the right answer yet. I recently received the family-office consultant designation at UBS, and I’m working with UBS’s family-office group to explore that question. Part of the answer is about being efficient and focusing on the things we do really well.

Thanks, Joanne.

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