Every risk model carries an assumption about time. For Marco Poon, a third-generation member of a major Hong Kong business-owning family, that assumption is where families and financial institutions part company. In conversation with Michael Macfarlane, he describes how a recommendation that any private bank would have endorsed was rejected by his own family, and why he is glad it was.

A safe recommendation, rejected

A couple of years ago, Poon suggested to his family that they invest in US bonds. By the standards of financial markets the case was strong. US Treasuries are very safe and very liquid, and he is confident that private banks at the time would have agreed with him. When he put the idea to his family, the older generation asked whether he had ever seen the balance sheet of that country.

Poon's reflection is that the mistake was his. He had been analysing the bonds through the lens of a financial institution. His elders were looking through a different one, shaped by having lived through multiple cycles. In his account, they know that what they were once taught was completely safe can go wrong, and that their sense of what is safe is always shifting.

They know that nothing is completely safe for the entirety of time.

— Marco Poon, Wealth Office

Macfarlane adds a historical frame of his own. He points to the Suez Crisis, when, as he tells it, the United States pressed Britain to stand down partly by threatening to sell its holdings of British bonds, and argues that on a 50-year horizon there is no certainty about any bond's safety. Poon's emphasis is more personal and practical. The family's instinct came from experience, and he lacked the variable it weighted most heavily.

Two variables institutions underweight

Poon identifies two elements at the core of how his family analyses risk. The first is geopolitics, which he describes as a key part of their risk model and as the thing he was missing. The second is time horizon. Given enough time, the family would rather invest in assets whose volatility it can ride out than bet on something that seems safe at the moment but could look completely different in the long run once geopolitical effects play through.

This sets the family against the language of private banking. Poon describes walking into a private bank and being told an investment is low risk because, compared with the industry, its beta and volatility are acceptable. His question is over what period. One year, five years and ten years are the frames institutions use. A family safeguarding resources for 100 or 200 years, he argues, feels risk very differently.

Macfarlane extends the point to equities, asking how many of the top-returning companies of the past five years existed 50 years ago, let alone 100. The implication for families is that a measure of risk calibrated to a short window says little about survival over generations.

Incentives shape advice

Poon's second argument concerns why institutions struggle to see risk the way families do. Families, he says, approach banks with a bracket of needs. Investment is one. Governance and charity are others. Banks are designed to serve investment, because that is where their revenue comes from, through commissions on products and on buying and selling stocks. Ask staff about their KPI, he suggests, and the answer is revenue from the portfolio. Anything else is an additional cost unless the family is willing to pay for it.

He sees a very direct conflict of interest. A family wants arrangements that fit its own values and goals. A bank's incentives point elsewhere. Raise family governance issues with a private banker, he says, and you can hear a pin drop.

This is part of the thinking behind JCP, which Poon founded and describes as a fiduciary business on a net-fee model. When banks offer commissions, he says, JCP discloses them to the family, declines to take them and asks the bank to reduce its fees instead, so the family's net cost is as low as possible. JCP also helps families set up investment committees and trains them to make decisions inside them, testing whether an investment fits the family's objectives and filtering out the noise of bank incentives.

Our core objective is to help family to make the best decision they can.

— Marco Poon, Wealth Office

Long horizons as a strength

Poon's view of time horizon is also a view of opportunity. He describes family capital as different from institutional capital, chiefly because families sometimes have no fixed investment horizon at all. He questions why a project should have to end in ten years when it could run for 20 or 30.

That patience, he argues, is a strong basis for backing new projects such as startups and industries that take a long time to grow. Infrastructure is his example. Construction alone may take a few years, while the investment benefits extend across ten or 20 years. He sees a global need for a major overhaul of energy grids to meet the future demands of AI, recalling African representatives at the 2024 Internet Governance Forum in Riyadh who said they lacked the power grid and communication networks to use it. He also mentions opportunities in Japan's old power grid, including micro power plants and solar power for industrial sites, and acknowledges that rebuilding a power grid is far from easy.

The thread connecting these ideas is time. The same patience that made his elders wary of a supposedly safe bond also allows families to back projects that institutions with fixed exit timelines may struggle to hold. In Poon's telling, judging risk well and investing patiently are two applications of the same long view.