Charles Monat explains why Hong Kong is a lucrative place for investing assets

New Yorker Charles (Chuck) Monat arrived in Asia in 1970 via Thailand, where he had served in the US army. In Bangkok, he met his mentor Reeve Hankins who ran insurance broker Rolibec Ineternational. Mr Hankins hired him off the street to sell insurance to American expatriates in Hong Kong. The 26-year-old landed in a city where he knew nobody. A year later, sensing immense opportunities in "China's Manhattan", he set up Charles Monat Associates Ltd. Fast forward 35 years later, and it is now one of Asia's premier consultancies for wealth transfer and liquidity planning, and Hong Kong's largest independent provider of life insurance.

"I set up Charles Monat Associates Ltd in 200 sq ft of office space in Central with just me and another staff member. More than three decades later, I am still in Central but with a 4,250 sq ft office and with 18 staff in Hong Kong and 17 in the Singapore office. Hong Kong has been good to me; in fact, the city is ideal for my kind of business. As a worldwide financial centre, the Hong Kong government permits insurance brokers like me to source from any insurers globally and sell to anyone interested in buying. I can't think of many places in the world where the government is so supportive and friendly.

When I first started, I was selling insurance mostly to Americans in Hong Kong, but now the 8,000 clients on our database come from around the region. The number of high net worth individuals – people with net financial assets of at least US$1 million – has risen in Asia in general and in Hong Kong in particular, so it is essential for these people to seek expert advice on wealth management. Every case is different so we tailor solutions to fit each client.

Tax-friendly environment

Estate taxes are crippling and could drain the resources of affluent families if they don't have adequate cash. In Hong Kong, estate duties have been abolished since 2005 but not so in the UK, which has an inheritance tax of 40 per cent, Singapore has 10 per cent estate tax and in the US it can go up to 46 per cent. So, Hong Kong is a good place to have assets. Increasingly, it's less of a taboo now to talk about death, especially among the Chinese, so we are seeing a lot of affluent clients and businesses coming in for advice on how to manage their estate liquidity to protect their families and businesses.

There are now more global players, agents and brokers in the insurance business. This is good. More people in Hong Kong are buying life insurance and in larger amounts. The products have become more sophisticated and the numbers and sizes of the policies have grown substantially. The crowded field creates a buzz, raises the interest level and in turn, produces more capacity on underwriting. It's easier to get policies issued.

Business has been steady over the years and the best years for me have been the last six to seven. Terrible events have happened in this decade since 1997 - the Asian Financial Crisis, IT bubble burst, Sars and 9/11. It's hard to say, but wars, terrorism, and crises are good for the insurance business. People become more aware of their mortality. They realise that insurance has a place in the face of these catastrophes. Hong Kong is capitalistic and has little in the way of social security. It's only in the last few years that there has been a mandatory provident fund for employees, so people need to look after themselves and buying insurance is one way of doing so.

I feel good as my business is a decent business. It creates cash at a low premium and provides a service whether in death or retirement. Money walks in when people walk out. My company has placed over US$1 billion of coverage over the last five years.

Longest life expectancy

It's cheaper now to buy policies as people live longer. Believe it or not, Hong Kong has the best life expectancy in the world, even surpassing Japan, which used to be the highest.

I have absolutely no desire to retire. What would I do? I love my job; my clients have become friends and my employees – many of whom have been with me for a long time – have become family. I feel very lucky to be in a city where there is a ready pool of talent, where the people are decent and industrious and work until the job gets done. Hong Kong people have big hearts and deep pockets and they are always ready to donate to good causes as well.

I have hired a lot of top calibre people, including some former bankers. Many have been with me over 10 years. That is part of my succession plan. When I check out, the company will continue to run smoothly."

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Charles Monat Associates