2016

ISSUE: AUGUST

Wealth
Management
in Asia 2016

hubbis.com
Foreword
On behalf of BNP Paribas Wealth Management, I am
delighted to partner again with Hubbis on this flagship
publication the 6th edition of an annual overview and
outlook for the private banking and wealth management
industry in Asia.

The last 12 months have been particu- In many cases, this involves redesigning
larly tough for all industry players. The the core service model and digitising
various challenges that organisations parts of the value chain.
face are nothing new, but the pressures
have been mounting to the point where A lot of conversations at the moment
chief executives are reconsidering their among industry leaders revolve around
business models, along with the strate- efficiency and enabling front-line staff
gic choices they need to make, to remain to be more productive to generate
relevant in Asia. revenue opportunities rather than
spending their time on more administra-
In short, this means re-focusing on the tive tasks.
areas within which they believe they
can provide real added value to their Meanwhile, the desire to develop more
clients. needs-based solutions for clients in Asia
is a process which will take time but
For some players, this has meant exiting will finally drive the change in thinking
certain markets or locations, or the in- needed to lead to a new business model
dustry entirely. for wealth management in Asia.

For those with the conviction to con- The content in this publication covers
tinue to compete in this space, they need these issues and more. I hope you enjoy
to determine how to build a sustainable reading and are able to benefit from
platform for the future. these insights.

MIGNONNE CHENG
CHAIRMAN & CHIEF EXECUTIVE OFFICER, ASIA PACIFIC
BNP PARIBAS WEALTH MANAGEMENT
CONTENTS

Section 1
02 Business strategy

Section 2
92 Local markets

Section 3
136 Product & advisory offerings

Section 4
176 Family wealth

Section 5
194 Insurance in wealth management

Section 6
204 Digital wealth

Feature Articles
02 A NEW LOOK-AND-FEEL FOR ASIAN WEALTH MANAGEMENT
In a more challenging year for wealth management and private banking
than the industry has seen for a long time, defining and articulating a
clear value proposition is essential to meet todays client expectations
and behaviour.

36 WILL PRIVATE BANKING IN ASIA THRIVE OR WITHER?

As consolidation gathers pace and polarisiation within this segment
continues in the face of rising costs and thin margins, how should private
banks adapt to thrive?

i WEALTH MANAGEMENT IN ASIA 2016

CONTENTS

136 RE-IGNITING THE REVENUE ENGINE

Wealth managers have found it tougher than ever to make money
in the first half of 2016. But beyond just proposing new investment
strategies for clients, they need to drive needs-based conversations to
adapt and provide a more relevant offering.

166 CHANGING THE RULES OF THE ADVISORY GAME

Better advice in Asia can only come with the willingness and ability
of wealth managers to position products as solutions, drive simplicity
and transparency, and enhance client service. A focus on long-term
portfolio value must replace the (continued) tendency towards short-
term conversations.

186 A PRESSING NEED TO ENHANCE THE DISTRIBUTION MODEL

Having discussions which are more focused, relevant to clients needs
and actionable, will create a more realistic chance of bringing the
concept of advice to life in Asia. This calls for asset managers to hone
in on the ways they engage, support and communicate with fund
gatekeepers across wealth management.

Expert Insights
16 THE EMERGENCE OF ASIAN MULTI-FAMILY OFFICES
Philippe Legrand of London and Capital Asia

24 PROVING THE VALUE OF PROFESSIONALISM

Nick Pollard of CFA Institute

46 WHY PRIVATE BANKS WILL LIVE OR DIE ON INNOVATION

Mignonne Cheng of BNP Paribas Wealth Management

48 MAYBANK KEEPS FOCUS ON SUSTAINABILITY IN PRIVATE WEALTH

Alvin Lee of Maybank

72 A NEED TO BE NICHE
Brian Shegar of Emirates NBD

92 HOW BEA IS EYEING CHINA FOR WEALTH MANAGEMENT GROWTH

Grace Chow of Bank of East Asia

ii WEALTH MANAGEMENT IN ASIA 2016

CONTENTS

100 THE COMPONENTS OF A SUCCESSFUL WEALTH OFFERING IN INDIA

Karan Bhagat of IIFL Private Wealth Management

106 KASIKORNBANK SHOWS WAY TO SERVICE HNW THAIS

Jirawat Supornpaibul of Kasikornbank

110 BRINGING A BROADER AND DEEPER OFFERING TO THAILAND

Don Charnsupharindr of Citi

114 THAI INSURERS JUMP ON DIVERSIFICATION BANDWAGON

Kris Chantanotoke of Thai Life Insurance

124 CHANGING THE PHILIPPINES INVESTMENT MIND-SET

Robert B Ramos of Union Bank of the Philippines

126 CATERING TO A MORE GLOBAL OUTLOOK IN THE PHILIPPINES

Nanjo Berba of Philam Asset Management

134 CAN MALAYSIA CREATE A REAL CULTURE OF ADVICE?

Robert Foo of MyFP Services

146 PHYSICAL GOLD: ARE YOU READY?

Seamus Donoghue of Allocated Bullion Solutions

148 GIVING CLIENTS THE PRODUCT PROPOSITION THEY WANT

Lavanya Chari of Deutsche Bank Wealth Management

152 HOW CITI IS ENHANCING ITS ADVISORY OFFERING

Paul Hodes of Citi

157 GETTING ONTO A BANKS FUNDS DISTRIBUTION PLATFORM

Stewart Aldcroft of Citi

158 MAKING THE SWITCH FROM PRODUCTS TO PORTFOLIOS

Damien Mooney of BlackRock

160 WHY BANK DISTRIBUTORS MUST RE-TUNE PRODUCT PLATFORMS

June Wong of State Street Global Advisors

162 DRIVING A NEEDS-BASED CONVERSATION

Shikha Gaur of Aon Hewitt

iii WEALTH MANAGEMENT IN ASIA 2016

CONTENTS

164 NO ROOM FOR COMPLACENCY IN DISTRIBUTION

Alison Brown of HSBC Global Asset Management

170 FACILITATING A MORE CONDUCIVE INVESTMENT LANDSCAPE

Kevin Talbot of Aviva Investors

172 THE CHANGING LANDSCAPE OF OVERSEAS PROPERTY: CHINA FACTOR

Piers Brunner of Knight Frank

176 FACING UP TO THE REGULATORY REALITY OF TRANSPARENCY

Andri Manatschal of PwC

178 PLUGGING A GAP FOR LONG-TERM STRUCTURING ADVICE

Nigel Rivers of Capital Solutions

184 GREATER TRANSPARENCY RAISES PRIVACY AND ADVICE RED FLAGS

Stephanie Jarrett of Baker & McKenzie

193 KNOCKING ON ASIAS ONSHORE OPPORTUNITY

Jonathan Hubbard of UBS Wealth Management

196 BROADENING THE INSURANCE FOCUS ON HONG KONGS WEALTHY

Thomas Young of Generali

202 EYEING HEALTHY PROFITS FROM A MORE MOBILE CHINA

Rainbow Pan of Bupa Global

207 A PROCESS TO DIGITALISATION

Peter McMillan of Thomson Reuters

208 WHY BANKS MUST RELY ON FINTECHS

Ralph Mogicato of Angel investor and entrepreneur

214 WHAT IF AN UBER WEALTH WAS BORN?

Raj Ganesarajah of Intellect Design Arena

iv WEALTH MANAGEMENT IN ASIA 2016

We combine investment expertise with agility to bring you
a broad range of performing strategies, tailored
to your personal needs.

Private Banking | Asset Management | Treasury & Trading | www.ubp.com

Past performance is not a guide to current or future results. The value of investment interests can fall as well as rise. Any capital invested may be at risk and you may not get back some
or all of your original capital. UBP is authorised and regulated in Switzerland by the Swiss Financial Market Supervisory Authority and is authorised in the United Kingdom by the Prudential
Regulation Authority. UBP is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority; it is a licensed bank regulated by the
Hong Kong Monetary Authority (HKMA) and a registered institution regulated by the Securities and Futures Commission (SFC) in Hong Kong for Type 1, 4 & 9 regulated activities; and is
regulated as a merchant bank by the Monetary Authority of Singapore, is an exempt financial adviser under the Financial Advisers Act (Cap. 110 of Singapore) to carry on certain financial
advisory services, and is exempt under section 99(1)(b) of the Securities and Futures Act (Cap. 289 of Singapore) to carry on certain regulated activities.
CONTENTS

Profiles
12 EFG SHOWS CLEAR CONVICTION FOR SCALE
Joachim Straehle & Albert Chiu of EFG International

18 FOCUSING ON WHAT MATTERS TO CLIENTS

Nigel Preston of St. Jamess Place Wealth Management

28 THE ROLE FOR BOUTIQUES IN ASIAS NEW WEALTH LANDSCAPE

Febby Avianto of Falcon Private Bank

52 HOW HSBC IS PURSUING ITS DESIRED PRIVATE BANKING MODEL

Sandeep Sharma of HSBC Private Bank

60 FOCUSING ON WHAT YOURE GOOD AT

Evrard Bordier of Bordier & Cie

64 BANK VONTOBEL EYES ASIA WITH OFFERING OF GLOBAL ACCESS

Georg Schubiger of Bank Vontobel

76 STEADY GROWTH WITH AN EYE TO THE MILLENNIALS

Vincent Chui of Morgan Stanley

80 INVESTEC STRIVES TO SET NEW ADVISORY TONE IN HONG KONG

Catherine Kirchmann of Investec Wealth & Investment

98 DRIVING AN ALL-ROUND INDIAN PROPOSITION FOR HIGH-END CLIENTS

Anshu Kapoor of Edelweiss Global Wealth Management

116 KASIKORN ASSET MANAGEMENTS VISION FOR THAI DISTRIBUTION

Benjarong Techamuanvivit of Kasikorn Asset Management

118 A NOVEL APPROACH TO WEALTH ADVICE IN THAILAND

Paul Gambles of MBMG Group

132 A WEALTH OF OPPORTUNITY FOR RHB BANK

U Chen Hock of RHB Bank

174 HOW CREDIT SUISSE IS LEADING AN ASIAN ASSET MANAGEMENT CHARGE

Michael Levin of Credit Suisse

182 SHEDDING LIGHT ON THE ANATOMY OF A FAMILY BUSINESS

Hans Diederen & Angelo Venardos of Heritage Trust Group

v WEALTH MANAGEMENT IN ASIA 2016

CONTENTS

190 A GENERATIONAL MIND-SET TO SERVICING FAMILY WEALTH

Shanker Iyer, Sunil Iyer & Sanjay Iyer of Iyer Practice Advisers

194 SUN LIFE EMBARKS ON PATH TO TAP THE WEALTH PIPELINE

Jason Dehni of Sun Life Hong Kong

198 TOKIO MARINE CARVES LIFE INSURANCE NICHE IN SINGAPORE

James Tan of Tokio Marine Life Insurance Singapore Ltd.

Event Highlights
22 COMPLIANCE IN ASIAN WEALTH MANAGEMENT FORUM 2016
Gearing up for greater compliance scrutiny

32 ASIAN WEALTH MANAGEMENT FORUM 2016 - HONG KONG

Redefining business and advisory propositions

56 INDEPENDENT WEALTH MANAGEMENT FORUM 2016

Independent firms can grab more AUM, but growth hurdles remain

68 ASIAN WEALTH MANAGEMENT FORUM 2016 - SINGAPORE

Mapping out the future for Asian wealth management

84 WEALTH THINK 2016 - HONG KONG

Rethinking business models in Asian wealth management

94 MIDDLE EAST WEALTH MANAGEMENT FORUM 2016

Enhancing capability, capacity and pipeline in the Middle East

102 THAILAND WEALTH MANAGEMENT FORUM 2016

Thai potential heralds new dawn for wealth management offerings

120 PHILIPPINES WEALTH MANAGEMENT FORUM 2016

A need for more investment and conviction in the Philippines

128 MALAYSIAN WEALTH MANAGEMENT FORUM 2016

Finding the way forward in Malaysian wealth management

vi WEALTH MANAGEMENT IN ASIA 2016

EFG Bank The Best Global
Private Bank in Asia

For the fifth year running:

Best Global Private Bank in Asia
As voted in 2016 Asiamoney
Private Banking Poll by HNWIs with
US$ 1 5 M / US$ 5.01 25 M /
> US$ 25 M AUM

also
Best Domestic Private Bank in Hong Kong

Overall Best Private Bank in Hong Kong

(As voted by HNWIs with US$ 1 5 M
and US$ 5.01 25 M AUM)

Overall Best Private Bank in Singapore

(As voted by HNWIs with US$ 5.01 25 M)

EFG Bank Building

in Singapore

Hong Kong: 18 th Floor, International Commerce Centre, Kowloon Tel +852 2298 3000
Singapore: 25 North Bridge Road, #07-00 EFG Bank Building Tel +65 6595 4888
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Jakarta 10220, Tel +6221 579 00123.
CONTENTS

154 INVESTMENT SOLUTIONS FORUM 2016 - SINGAPORE

Finding investment solutions for challenging markets

180 INDIAN FAMILY WEALTH FORUM 2016

Managing Indian family wealth

Co-published Article
88 REGULATORY CHANGE MANAGEMENT FOR INVESTMENT SUITABILITY
AND BEYOND
Prasanna Venkatesan of Synpulse

Directory
218 PEOPLE AND FIRMS WHO SUPPORTED THIS PUBLICATION
We very much appreciate the participation and contribution of key
individuals and organisations in the Asian wealth management
community to the content in this publication.

Published by Hubbis. Printed in August 2016 in Hong Kong. Hubbis (HK) Limited 2016

All rights reserved. No portion of this book may Michael Stanhope

be reproduced, duplicated or copied by any Chief Executive Officer
means without the prior written consent of the Hubbis
publisher. No legal responsibility can be accepted T (852) 2563 8766
by the author or publisher for the content which E michael.stanhope@hubbis.com
appears in this publication. W www.hubbis.com

vii WEALTH MANAGEMENT IN ASIA 2016

There is the short-term,
the long-term and
the term that lasts
for generations.

Wealth generates unique challenges. Citi Private Bank brings the global
network of Citi with local insight to help accomplish what is important to you
and to manage your wealth for generations. For an office near you, and to
learn more, visit citiprivatebank.com

Citi Private Bank (CPB) is a business of Citigroup Inc. (Citigroup), which provides its clients access to a broad array of products and
services available through bank and non-bank affiliates of Citigroup. Not all products and services are provided by all affiliates or are
available at all locations. In Hong Kong, this document is issued by CPB operating through Citibank, N.A., Hong Kong branch, which is
regulated by the Hong Kong Monetary Authority. In Singapore, this document is issued by CPB operating through Citibank, N.A., Singapore
branch, which is regulated by the Monetary Authority of Singapore. Any questions in connection with the contents in this document should
be directed to registered or licensed representatives of the aforementioned entity. Citi and Citi with Arc Design are registered service marks
of Citigroup Inc. or its affiliates.

INVESTMENT PRODUCTS: NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE

2015 Citigroup Inc. All Rights Reserved.

 USD20 bn USD1.73 trn 44

Firms with less than UBS kept its place at the top of the With branches and
USD20 billion in AUM Scorpio Partnership global ranking sub-branches covering 44 cities
may find it hard to of the 25 largest wealth managers, on the Mainland, BEAs network
sustain operations in Asia with more than is second only to HSBCs
Page 6 USD1.73 trillion in AUM among the foreign banks
Page 36 Page 92

9,000 75% 47%

KBanks private banking business 75% of the performance Chinas HNW growth has
has amassed over of average advisory portfolios resulted in a 47% increase in the
9,000 HNW clients and in a private bank amount of money flowing
more than USD19 billion under-perform into Hong Kong
in overall assets discretionary portfolios between 2012 and 2014
Page 109 Page 144 Page 188

Content colour coding - for Hubbis articles

REGULATION & COMPLIANCE SKILLS

INVESTMENTS STRATEGY & BUSINESS

FAMILY WEALTH TECHNOLOGY

viii WEALTH MANAGEMENT IN ASIA 2016

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FEATURE ARTICLE

A new look-and-feel for Asian

wealth management
In a more challenging year for wealth management and private banking than the industry
has seen for a long time, defining and articulating a clear value proposition is essential to
meet todays client expectations and behaviour.

A July 2016 report by Oliver Wyman

says that to sustain profitability, the
wealth management industry needs to Wealth managers with
redesign the core HNW service model less than USD20 billion in
and digitise parts of the value chain. AUM may find it hard to
sustain operations
More specifically, it says organisations in Asia.
should explore new sources of value
creation, such as platforms that enable
investors to access opportunities such
MARC VAN DE WALLE
as growth-stage financing or direct real
Bank of Singapore
estate investments. This is in response
to the reports findings that AUM
growth is expected to slow from 7%
per annum over the past five years to
5% per annum until 2020.
recent years are changing, and firms will on client acquisitions and managing
The messages are consistent with many need to take action on costs and devel- attrition risks, in particular with respect
other well-respected annual studies oping new ways of engaging with clients to inter-generational wealth transfers.
does on the industry, including those to maintain revenues.
by Capgemini and The Boston Consult- I agree that 2016 is, and will continue
ing Group, for example. In turn, adds the Oliver Wyman report, to be, challenging for the wealth manage-
entitled: Wealth Management: Running ment industry, not just in Asia but glob-
The conclusions are broadly based on faster to stand still, and co-authored ally, says Fredrik Lager, general manager
the fact that the forces which drove with Deutsche Bank Research, business at SEB Private Banking in Singapore.
performance in wealth management in leaders will need to sharpen their focus What we see in particular is that the

2 WEALTH MANAGEMENT IN ASIA 2016

FEATURE ARTICLE

is tackling rising cost despite margin

compression, he adds.
It would certainly ensure
enhanced professionalism According to Lager, it may take time
over time if we could before there is a return to a more stable
stabilise management financial environment. In the mean-
turnover and as a result of time, banks will suffer at a top-line level.

that, RM turnover.
SHIFTING LANDSCAPE
There is little doubt about the scale of
LONNIE HOWELL
the opportunity bearing in mind the
UCAP Asset Management
regions wealth demographics.

Capgeminis World Wealth Report 2016,

for instance, said that in 2015, HNW
wealth continued to hit new record
activity income has dropped quite con- restrictive approach towards invest- highs, aided especially by Asia Pacific
siderably over the last six months. ments, says Lager, referring to the overtaking North America as the num-
upcoming US Presidential election, ber-one wealth market. And Japan and
MULTI-PRONGED CHALLENGES Brexit, oil prices, Europes migration China emerged as engines of global
Market volatility and economic uncer- problem, broader geo-political unrest growth, registering double-digit increas-
tainty are adding to the pressures of a and China trying to cope with its loss es in both the population of HNW indi-
wealth management industry already in industrial momentum. viduals and UHNW wealth growth. To-
challenged by operational efficiency, gether, the two countries drove nearly
margin pressures and regulatory re- And the low-yield environment on the 60% of global HNW population growth.
quirements. Most clients seem to be macro front is a problem both for
waiting on the side-lines, having clients and banks. Return on all invest- And if past growth rates hold, Cap-
adopted a wait-and-see approach ments is lower, hence spreads have to gemini predicts that Asia Pacific is likely
towards investments. be thinner for clients to have a decent to continue to be a dominant force over
return, explains Marc Van de Walle, the next decade, representing two-fifths
There are a lot of things going on glob- global head of products at Bank of of the worlds HNW wealth, more than
ally which, I believe, warrants this rather Singapore. In a nutshell, the challenge that of Europe, Latin America and the
Middle East and Africa combined.

Yet while wealth is growing, revenue is

challenged and costs keep rising.
Coupled with the growing
complexity of doing business in In such an environment, some practi-
multiple jurisdictions, private tioners say that only banks with critical
mass can offer the breadth of global
banks will have to modify and
products needed to thrive.
fine-tune their business models
and strategies. In line with this, along with a maturing
and increasingly-competitive private
JASON LAI banking industry in Asia, consolidation
Thirdrock Group seems inevitable. The increasing cost
of doing business and squeezed margins
could force out some players whose

4 WEALTH MANAGEMENT IN ASIA 2016

 an individual approach
is the only answer.

zurich singapore

impartial global exclusive swiss

info@finaport.com
FEATURE ARTICLE

ensure all clients are fully transparent

both in relation to tax and plausibil-
The Panama Papers had more of ity of wealth.
an impact on the public debate.
How much privacy do you allow The times when clients could hide
for those vehicles and how do behind banking secrecy are dead and
you ensure proper oversight? will never return, says Lager. This will
become even more evident when CRS
kicks in fully in 2017 and 2018.

STEFAN KUHN
The Panama Papers incident also
Credit Suisse Private Banking
caused a lot of work to work on inquires
and in-house checks. Yet this had more
of an impact on the public debate, says
Stefan Kuhn, head of compliance,
private banking, for Credit Suisse in
core market is not Asia, says Amanda This is because Asia typically requires South-east Asia. How much privacy do
Chen, deputy head of wealth manage- a different business model, skill-sets, you allow for those vehicles and how
ment, for Nomura in Asia ex-Japan. I people and platforms. So it is not just do you ensure proper oversight?
expect more consolidation in the private global scale but also the scale within
banking space to meet regulatory re- Asia that matters. An immediate impact of the stricter
quirements as well as to meet banks regulatory environment is the fact that
needs of investing in technology to Almost regardless of size, Ronald Lee, private bankers spend a lot more time
digitise salesforce and clients. co-head of private wealth management today on administrative work, which in
at Goldman Sachs in Asia ex-Japan, said turn leads to less client-facing time.
According to Van de Walle, firms with at a recent Hubbis event in Hong Kong
less than USD20 billion in AUM may that it is impossible to over-estimate The broader strategic implications,
find it hard to sustain operations in Asia. the value of having a consistent strat- however, include forcing banks to
In line with his prediction of further egy. Another factor that leads to rethink where to operate. In particular,
consolidation in the Asian wealth man- success is being true to your culture. tax laws, cross-border rules and regula-
agement sector, he sees business tory requirements relating to onshore
moving to larger companies. Smaller From his perspective, it is key for firms resident investors will continue to chal-
players will find it harder to offer the to have a differentiated offering, given lenge the traditional offshoring banking
range of products and services that the that clients in Asia are spoilt for choice. model, says Chen.
regions rich are looking for.
RE-SHAPED BY REGULATION Regulations relating to product suit-
Speaking at Hubbis flagship wealth These trends have come in the wake of ability and selling processes will also
management event in Hong Kong earlier the far-reaching impact of stricter re-shape the industry, she adds, to move
in 2016, Lonnie Howell, chairman of regulation over the last few years. This away from a volatile and high-risk trans-
UCAP Asset Management, described has re-shaped the industry for good, actional model to a more portfolio ad-
this trend as reflective of what is going particularly in terms of KYC and AML. visory and management approach.
to continue to happen in the industry. And banks are grappling with how they
keep pace with the scale, speed and More importantly, as the volume and
But though the minimum size to be costs of these and other current and pace of regulatory change continues to
successful keeps rising, due to cost of planned changes. weigh on the profitability of private
compliance, pressure on margins and banks, which in some cases have led to
the cost of technology, firms cannot There is no excuse any longer for banks de-marketing and industry consolidation,
ignore the importance of local scale. not try, to the best of their ability, to banks will need to narrow their focus.

6 WEALTH MANAGEMENT IN ASIA 2016

 Vision means looking to the future
without losing sight of the present.
VP Bank looks ahead with both feet firmly in the
here and now. We guide you on your journey through
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FEATURE ARTICLE

Taking advantage of this potential

however, requires, firms need to navi-
As licensing regimes gate effectively through the increas-
change [in China], we will ingly complex legal and regulatory
move people onshore policies, dynamic political environment
over time and increasingly and slowing economy.
the offshore and onshore
To date, many international institutions
markets will converge.
have dipped their toes in water, but
they still lack the full suite of licences
NEIL HARVEY
to do private banking or have enough
Credit Suisse
of an onshore footprint to ensure cov-
erage on the manufacturing side, says
Neil Harvey. chief executive officer for
Credit Suisse in Greater China. As li-
censing regimes change, we will move
The nature of private banking is es- ferentiation among players and have people onshore over time and increas-
sentially suitcase banking, says Adriel the potential to enhance wealth for both ingly the offshore and onshore markets
Loh, managing director and global head wealth managers and their clients. will converge, he adds, We are posi-
of compliance at Bank of Singapore. tioning the firm for that move.
Regulators are becoming stricter on CHINA BECKONING
the conduct of unlicensed activities When looking for the biggest wealth When assessing whether to collaborate
onshore. Hence, banks do need to have management openings going forward, to accelerate access to the market in
a robust framework of dos and donts however, a common question is how to China, Bassam Salem, region head, Asia
of what can be done by a visiting RM make the most of the China opportunity. Pacific at Citi Private Bank, is wary of
onshore without breaching local regu- joint ventures. I have not seen that
latory requirements. This has become more tangible for in- many successful business strategies that
ternational banks and other advisers in are based on a joint venture.
According to Jason Lai, founder and the wake of the slowdown of the
chief executive officer, Thirdrock Group, Chinese economy in recent years. This Even those institutions which have
coupled with the growing complexity has increased the appetite of Chinese invested directly have found China a
of doing business in multiple jurisdic- HNW individuals for diversification and difficult place to make money. The vast
tions, private banks particularly small- overseas investment alternatives, giving majority are not making money, says
to-mid sized players will have to international wealth managers oppor- Michael Blake, chief executive officer,
modify and fine-tune their business tunities to gain traction in the market. private banking, Asia at UBP. China is
models and strategies. This means tar- a tough market in which to succeed.
geting specific client segments and While most wealthy Chinese individu-
geographies instead of a full-service als still prefer to manage their own Yet he is positive about the interna-
proposition to all, he explains. wealth and investments, they are tionalisation of China and demand for
gradually recognising the importance offshore products. This is a massive
This may include reconsidering re- of professional advice to preserve their opportunity for Hong Kong-based
gional expansion, de-marketing where wealth and mitigate risks, explains Lai. wealth managers.
necessary, and investing in technology
that enhance process automation, risk Data also suggests that these clients are Lai says wealth managers also need a
management and relationship manage- entrusting an increasing percentage of thorough understanding of the specific
ment, says Lai. Strategic technology- their investable assets to third parties, he attitudes and approach of this diverse
related investments, in particular, may adds, from an average of 25% of their population of wealthy Chinese to wealth
become a best-in-class point of dif- investable assets in 2009 to 65% in 2015. and wealth management so they can

8 WEALTH MANAGEMENT IN ASIA 2016

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Since then Bain has worked for both multinationals and local clients from more
0
than 30 industries. We have served our clients in over 40 cities in China. There are
1980 1990 2000 2014
now 3 offices in Greater China region, covering Beijing, Shanghai and Hong Kong.
There are about 200 consultants currently working in Greater China, with extensive Note: Calculation of cumulative percentage change attested
experience working with Chinese and multinational companies. to by an Independent Accountant through December 2014

Bain Financial Services Practice

From banking and insurance to wealth management and securities distribution,
Bain has dedicated financial services teams serving all major areas of the
financial services industry, including retail banking, private banking and wealth
management, clients and capital markets business, asset management, life and
property insurance, risk, liquidity and capital management. Our work draws on
Dr. Alfred Shang
more than 40 years of experience in the field and the expertise of Bains 5,000
Partner, Beijing
professionals in the worlds most important financial centers. alfred.shang@bain.com
Since 2009, Bain has collaborated with China Merchants Bank to publish the
China Private Wealth Report every other year. The report is very well received in Richard Hatherall
the FS industry and beyond, and its rich data and insights have frequently been Partner, Hong Kong
quoted when it comes to the private wealth and private banking market. richard.hatherall@bain.com

Bain has deep expertise in financial services, but we also look beyond the Jennifer Zeng
industry and draw upon our capabilities experience. We tailor these offerings to Partner, Beijing
the needs of our financial services clients to help them solve problems or pursue jennifer.zeng@bain.com
opportunities in many strategic and operational areas such as growth strategy,
customer strategy and NPS, organizational effectiveness, operational excellence,
mergers and acquisitions, change management and performance improvement. www.bain.com
FEATURE ARTICLE

better tailor their advice and solutions

to meet the needs of this crowd. The
newly-rich who accumulated their wealth If we have stability and
rapidly through the growth of innovative longevity, then there is a
industries like technology tend to be strong bond between the
relatively young, say Lai. Statistics client and the bank.
suggest that 80% of them are under 50
years of age. Plus, he adds, they tend to
be more aggressive in their investment
styles with a focus on wealth creation,
BASSAM SALEM
rather than wealth preservation.
Citi Private Bank

The newly-rich are the most attractive

segment also for Joseph Tam, executive
vice president and head of private
banking and wealth management at
Wing Lung Bank. They are the first
generation of new rich since the Chinese management firms to provide sufficient ENHANCING REPUTATION
economic reforms in 1978, he explains. information, recommend appropriate More broadly for the wealth manage-
They are mostly in their early 50s, they products and more importantly, mitigate ment industry going forward, it needs
are entrepreneurs and not familiar with risks for their clients, adds Lai. to work on improving its reputation
offshore investment markets. They will among clients for service quality.
be the most profitable segment. And apart from domestic banks, Lai
believes competition may also come While there are various ways it can do
At the same time, the relatively early from unexpected sources such as this in terms of more narrowly-defined
stage of development of the wealth WeChat, the instant messaging plat- value propositions, many practitioners
management industry in China also form, that has made advances into fi- point to the need for a review of com-
means the infrastructure and talent pool nancial services, and online commerce pensation models.This is focused on the
may not be as established as other global giants like Alibaba. RMs, who are still central to the proposi-
wealth management centres. So theres tion, but all the other interaction points
still a lot of room for investor education. Digital delivery will be key in China, with the customer will become more
And the opportunity here is for wealth explains Harvey. important as well.

Encouraging longevity of RMs would

generate the greatest benefit, according
to Howell, It would certainly ensure
enhanced professionalism over time if
The first generation
we could stabilise management turnover
of new rich since the
and as a result of that, RM turnover.
Chinese economic
reforms in 1978 will Ultimately, clients like stability, adds
be the most profitable Salem. We sometimes forget that private
segment. banking is predominantly a relationship
business. A client can relate to the person

JOSEPH TAM at the top and stability is a positive thing,

Wing Lung Bank he explains. If we have stability and lon-
gevity, then there is a strong bond
between the client and the bank.

10 WEALTH MANAGEMENT IN ASIA 2016

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FIRM PROFILE

EFG shows clear conviction

for scale
Despite recent damage to BSIs reputation, EFG International sees a lot of value in
bringing together complementary businesses to drive scale. And the pure-play Swiss
bank is acting swiftly and decisively to realise this opportunity.

It might seem an under-statement to explains Joachim Straehle, chief execu-

say that EFG Internationals integration tive officer of EFG International.
of the BSI business is coming at an es-
pecially challenging time. But the firms MATCHING OF MINDS
senior management is just as convinced It doesnt matter to Straehle that this
about the move as it always was. deal sees the 140-year old-plus BSI tying
up with a bank which only launched in
The deal, announced in February 2016, 1995. His confidence in the cultural fit
was driven by an ambition to combine is based on what he sees as both banks
the two private banks into a top-five being client-focused, solution-driven
Swiss firm of a size and scale sufficient and entrepreneurial.
to thrive in an era of costly regulation,
stiff competition and uncertain global More fundamentally to Straehle as a
financial markets. driver for the merger, the high cost-in-
come ratios and challenging environ-
Eyeing the CHF170 billion (USD174 ment in terms of regulation, financial
billion) in combined AUM, those running markets, staff retention and other areas JOACHIM STRAEHLE
the show remain excited about the busi- of private banking shows the scale EFG International

ness prospects. required to do private banking in a prof-

itable way today.
With each [of the organisations] having
a strong focus on private banking, the This is becoming clearer to see in the
two banks have a lot in common, and by wake of the consolidation which has completely in some locations, and even
joining forces, we will be able to make been underway over the past couple of selling their businesses altogether. For
an attractive value proposition to years in terms of banks downsizing in those institutions which are not pure-
clients, employees and shareholders, certain markets, closing operations play private banks, they are increas-

12 WEALTH MANAGEMENT IN ASIA 2016

 new markets, such as in Switzerland, and Swiss escrow account which, at closing,
across Europe, Latin America and Asia. will contain 51 million EFG shares issued
to BTG Pactual as consideration, with
In Asia more specifically, EFG brings 320 shares locked up for two years.
staff, including 100 client relationship
officers (CROs) to the table, compared The fine and the penalty will result in a
with 300 staff and 70 relationship man- reduction in the purchase price. The
agers at BSI. In terms of AUM, as of the indemnities and escrow account remain
end of 2015, EFG counted CHF16.2 unchanged.
billion, and BSI CHF12.4 billion.
From EFGs perspective, it believes that
In fact, in each region of the world, a line has now been drawn from a Swiss
besides the UK, the combined bank will and Singaporean regulatory standpoint
have at least CHF25 billion in AUM, in connection with this matter.
which Straehle sees as a key number
when it comes to size. As a result, it should constitute another
ALBERT CHIU important step to remove related regu-
EFG Bank NO ROOM FOR DOUBT latory uncertainty for clients, employ-
To some observers, the crackdown and ees, investors and other stakeholders,
enforcement action on BSI in Singapore says the bank.

ingly aware of the seemingly dispropor-

tionate risks of providing a private
banking offering compared with the The merger with BSI will allow us to move to a
value it brings overall.
different league and also be in a position to benefit
from the consolidation happening in the market.
It is not valid anymore for some firms
to do this type of business, adds Straeh-
le, who says he expects to see fewer
private banks going forward. But those
which survive will be more focused on
what they do best. (SGD13.3 million in fines) and Switzer- EFG International also received ap-
land (CHF95 million in penalties) in May proval in late May 2016 from the Swiss
Yet this creates a good opportunity for and June 2016 might seem too much Financial Market Supervisory Author-
banks with a differentiated business for anyone to bear. ity, FINMA, for the proposed acquisition
model, adds Albert Chiu, head of the of BSI. This was granted on condition
Asia region for EFG. The merger with But EFG certainly went into the deal that BSI is fully integrated and legally
BSI will allow us to move to a different with its eyes wide open. dissolved within 12 months.
league and also be in a position to
benefit from the consolidation happen- What has happened [to BSI] shows why With a view to a swift and orderly
ing in the market. we have indemnifications in place up to closing, the process for obtaining the
the purchase price, plus a large amount other regulatory approvals for the trans-
The merger also makes sense when of shares in escrow, says Straehle. action is also on track, says Straehle.
looking at a world map.
More specifically, it was agreed in the With the many employees that display
The two banks are complementary geo- share purchase agreement that the in- professionalism, knowledge and integ-
graphically giving each other access to demnity will be backed by a material rity every day at both banks, Im con-

WEALTH MANAGEMENT IN ASIA 2016 13

FIRM PROFILE

vinced we have a successful future staff as it can as part of the integration looks to only hire senior and experi-
ahead of us, he adds. We will work with with BSI. enced private bankers, they should have
BSI to ensure a smooth transfer of an understanding of the long-term
clients and employees. This is important for Chiu, in particular, nature of their business.
given his expectations that the business
It is expected to complete at the latest will significantly grow in line with op- CLEAR VISION
in the fourth quarter of 2016, as origi- portunities in the region. Straehle wants to enjoy a fresh start
nally announced. after integrating the platform. We want
And going forward, the bank will screen to be seen as a bank which focuses on
CREATING STABILITY clients from BSI and enforce compliance offering private banking services, with
The integrated nature of the deal is standards as it integrates the newly- a global network in the regions we con-
reflected in the July 2016 appointments acquired assets worldwide. sider to be important, especially in Asia.
to the executive committee and a new
management structure for the com- From a technology perspective, mean- In line with this, he is determined to
bined EFG and BSI business which while, the integration is expected to be ensure the offering remains advice
includes five executives from BSI: relatively smooth. For example, rather driven, albeit making it clear that the
Renato Cohn, Reto Kunz, Maurizio Mo- than many different legacy systems, bank can still offer clients the asset
ranzoni, Gerald Robert, and Renato both banks have just one Temenos for management capability. It is always
important to be in the top quartile in
terms of performance, he adds, to
demonstrate to clients we can do the
asset management also.

We want to be seen as a bank which focuses on offering And by focusing on what it does best,
private banking services, with a global network in the EFG should be well-placed with its
regions we consider to be important. know-how and bankers to service the
types of clients that its offering is most
suited to those individual and families
with USD10 million or more in net worth
and who have an international portfolio
and lifestyle. For these clients, we have
Santi. This will become effective as of EFG, and Avaloq for BSI. They will con- much bigger advantage than local
the date of the closing of the transaction. solidate the platform using EFGs exist- banks, says Straehle.
ing platform.
This should help to provide stability Ultimately, he doesnt see any real dif-
and reduce any insecurity in relation to Where there is still work to be done, ficulties in maintaining the EFG model
the merger, says Straehle. however, is in working to combine and value proposition once the BSI ac-
various personnel strengths as part of quisition is complete.
Adds Chiu: There has been a lot of a team, to bring together individuals in
emotion around what has happened to a focused way. While various aspects of how the banks
BSI in Singapore, but the EFG manage- operate need to ironed out in order to
ment has worked hard to quickly outline We do not want to continue in the old find a middle ground, the broader objec-
our plans in terms of transferring BSI ways of having CROs specialised in dif- tives seem reasonably well aligned.
staff, clients and the business as soon ferent areas, says Straehle. Both banks see the importance of the
as possible. client being at the centre, and we want
At the same time, the EFG model might to give them advice, says Straehle. This
Another stabilising factor has been also help ensure that the bank doesnt is a business model we are very specific
EFGs commitment to taking as many inherit BSIs problems. Given that it and clear about maintaining.

14 WEALTH MANAGEMENT IN ASIA 2016

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EXPERT INSIGHTS

The emergence of Asian

multi-family offices
Philippe Legrand of London and Capital Asia explains why the growth of Asian multi-
family offices offers a new option for those looking for service beyond brand.

The changing landscape of Asian wealth At the same time, for clients in Asia,
management has led to a growing which are increasingly sophisticated
number of senior bankers offering their and entrepreneurial investors, they
services in a regulated environment but require more than a standard wealth
outside the traditional banking platform. management offering to meet their
corporate, lending, wealth management
This has come in the wake of the 2008 and family-related needs.
financial crisis and various other chal-
lenges since. According to Legrand, trends such as
the internationalisation of wealth,
For a lot of banks, wealth management coupled with a growing focus among
is not their core business, nor does it clients on real estate and other illiquid
account for a large part of their income. assets, dont play to what banks want
So with a tougher market environment to do for clients. This is because these
and greater risks of damage to reputa- services and products are not based on
tions, banks have re-assessed whether assets that can be put on the balance
they want to be in this business in Asia, sheet, he explains. PHILIPPE LEGRAND
London and Capital Asia
beyond their home markets in Europe
and the US. In response to this, the concept of multi-
family offices in Asia has emerged, says
As a result, menus have shrunk at many Legrand. This segment now accounts
institutions, in terms of what they can for between 5% and 10% of private
offer and what they are willing to discuss wealth assets managed in Asia. menus, explains Legrand, so can focus
with customers, says Philippe Legrand, on alternative options beyond liquid
chief executive officer and founder of By being outside the bank, these inde- assets ranging from real estate to
London and Capital Asia. pendent firms are not limited by any private equity to direct investments.

16 WEALTH MANAGEMENT IN ASIA 2016

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FIRM PROFILE

Focusing on what matters

to clients
St. Jamess Place Wealth Management is adamant that its advisers should be interacting
with clients as much as possible despite a growing administrative burden. So it has
created a support infrastructure and approach to investing to match, says Nigel Preston.

Quality not quantity is an over-used do this if it finds suitable people: that

term, but one which rings true for St. is, individuals who share the same
Jamess Place Wealth Management values as the business and would there-
(SJP) in Singapore. fore make the right fit. Because of this,
Preston explains that SJP tends to only
The firm is growing steadily, but at a rate look for individuals with proven track
which Nigel Preston, chief executive records from well-respected firms.
officer for the local business, is confident
wont compromise the service levels, When a new Partner is invited on-board,
investment proposition or brand repu- there is a suite of business development
tation that SJP proudly makes a point managers in place; professionals who
of upholding. are specifically appointed to provide
support, add value and help grow the
We are pursuing comfortable growth Partners business in a safe, considered
in a way that we can manage it and way which encourages maximum benefit
continue to deliver on our commit- for their clients.
ments to our clients and Partners, NIGEL PRESTON
explains Preston. Inevitably, this means working within SJP

the spirit of the local regulation in

BRAND PROTECTION Singapore, to meet the expectations
SJP is realistic in its growth objectives. of the balanced scorecard framework
It inducts around one partner a month amid the various initiatives on the
at the moment and is looking forward FAIR agenda. Singapore at the start of 2015, it now
to increasing its number of financial counts six full-time staff in this function.
advisers in Singapore from 35 to 40 by The firm has invested to keep on top of They spend their time, says Preston,
the end of 2016. But the firm will only this. From a single compliance officer in ensuring quality is assured whilst MAS

18 WEALTH MANAGEMENT IN ASIA 2016

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FIRM PROFILE

regulations are fully understood and When they look at the market place
adopted. SJP has also appointed group globally, there are thousands of options
A clear approach to
business risk managers to support the for them to choose from. This in itself investment management
management team. can be confusing.
SJPs philosophy reflects its
We aim to help our own Partners build As a result, the developments in this beliefs that no single investment
house has a monopoly on
their businesses in the right way with area are important to give confidence
investment expertise, and it
client relationships being based on to clients about how the firm can help
does not employ in-house
longevity, explains Preston, and un- them with those investment decisions. investment managers.
derstand how we should be servicing
our clients. ALIGNMENT Instead, it selects a number of
The upshot of SJPs processes and overall external managers of what it
considers to be outstanding
INVESTING MORE SMARTLY approach to doing business is to ensure
ability to manage its range
In its mission to constantly bring the best its Partners can spend more time with
of funds.
value to its clients, the firm is continu- clients on their financial plans and to
ally developing its investment offering. understand their latest circumstances. This has a number of advantages.
First, it gives the firm the
Local market research is conducted to This is increasingly core to staying rel- freedom to select best-in-class
managers from the global
enhance the product range and overall evant to clients given that people now
investment market to manage
service, which Preston sees as a real seem to move between locations and
its funds on behalf of its clients.
differentiator: the investment manage- change jobs more often. It is important Secondly, it enables it to change
ment approach is not about simply that we understand our clients chang- any of these managers at short
bringing a UK-centric proposition to ing attitudes to risk and their financial notice if it has lost confidence
clients in Asia. and other objectives, explains Preston. in them, without any charges,
tax or inconvenience to clients.
And thirdly, it offers clients a real
opportunity to diversify their
investments by spreading their
money across funds managed
by different managers with
We are pursuing comfortable growth in a way that
different styles.
we can manage it and continue to deliver on our
commitments to our clients and Partners.

ners book to someone else internally

who is capable of servicing those
We are geographically worldwide with This is also a proposition which is de- clients, he adds.
local flavouring. We have seen that signed to attract Partners to join the
whether or not we already have in place firm. All our relationships are built on As a result, client relationships are
some local fund managers in Asia, there longevity as part of our value-based managed from the outset with a long
is demand for more. reward scheme, explains Preston. term view in mind, helping to foster a
longer term relationship.
As a result, the firm is working on iden- This enables an individual, at a later
tifying a greater variety of fund manag- stage, to capitalise on the recurring We have paid out hundreds of millions
ers specialised in Asia. income stream they have built up over of pounds in our UK business based on
the years from the excellent service these schemes, showing that they really
Choice is the biggest challenge our they provided their clients. We play do benefit both the client and the
clients in Asia have, says Preston. the role of the broker and offer a Part- Partner, says Preston.

20 WEALTH MANAGEMENT IN ASIA 2016

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EVENT HIGHLIGHTS - COMPLIANCE IN ASIAN WEALTH MANAGEMENT FORUM 2016 - JANUARY

Gearing up for greater

compliance scrutiny
With the regulatory and compliance burden getting heavier and more complex than
ever before for wealth management institutions of all types and sizes in Asia the
event revealed key strategic challenges and initiatives that anyone who wants to
survive must act on quickly.

Among the many compliance-related A clear take-away, therefore, was that it

challenges confronting financial institu- is ever-more critical for institutions and
Thank you to our sponsors
tions across Asia in 2016, perhaps the advisers alike to make sure the back-
most prominent continues to be on the ground checks and client due diligence AG Delta
AML, onboarding and tax transparency they do are done right and monitored. Amicorp Group
sides of the business. BRP
IMTF
The various global standards and drive
Allocated Bullion Solutions
While this wasnt considered the biggest towards transparency dont just require
Knighthead
issue according to a sentiment poll of new procedures, enhanced and ex- Swiss Asia
compliance practitioners and front-line panded. In addition, a significant chal- Thomson Reuters
advisers at our Compliance in Asian lenge highlighted was the timeliness of
Wealth Management Forum 2016 in these procedures.
Singapore in January, it is clearly the
priority for regulators. For instance, although a lot of countries
have announced they will be early adopt- sibilities and boundaries clear? Probably
As a result, senior practitioners said at ers, they havent yet signed the necessary not in most cases, said speakers. Risk
the time that the AML and tax-relating inter-governmental agreements or put functions were advised to turn from
reporting must remain high up on the their own regulations in place. being reactive to becoming proactive,
priority list for wealth management assuming the governance structure can
organisations. This included the Institutions must get their governance support such decision making and re-
Common Reporting Standard (CRS) and right in terms of operational risk manage- sponsibility under one roof.
Automatic Exchange of Information. ment and compliance. Are the respon-
At the same time, given the new report-
ing obligations, the industry must guard
against the risk of misinformed clients.

Ethical compliance was another area

discussed as being under more and
more scrutiny and expected to come
under a sharper regulatory spotlight.

Newer themes also emerged as issues:

information security and data privacy,
arising from various mishaps.

22 WEALTH MANAGEMENT IN ASIA 2016

Simon Wong Andrew Au Andrew Chow Byron J Murphy Vincent Koo
AG Delta AG Delta BNP Paribas Globaleye BNP Paribas Wealth Management

David Vignola Eileen Giam Evelyn Koh Joanna Yap Joseph Kwok
Standard Chartered Private Bank Deloitte Standard Chartered Private Bank KhattarWong LLP Ex-FPAS

Woon Hum Tan Julia Leong Keith Harrison Kenneth Chia Kevin Chua
Shook Lin & Bok PwC Abacare Singapore ANZ Private Bank Amicorp

Kit Halpert Koh Hoe Shin Kwong Wing Leon Lian Chuan Yeoh Mark Buesser
Goldman Sachs Manulife Financial Advisers KhattarWong LLP Allen & Overy IMTF

Patrick Dreyfuss Rolf Haudenschild Stefan Kuhn Stephanie Magnus Steve Knabl
DBS Bank Maroon Analytics Credit Suisse Private Banking Baker & McKenzie Swiss Asia

WEALTH MANAGEMENT IN ASIA 2016 23

EXPERT INSIGHTS

Proving the value of

professionalism
CFA Institute is taking to the streets with a new initiative to drive greater
awareness of the value of the qualification and professional accreditation.

Re-affirmed in a survey released by CFA charterholders through what we

Institute in early 2016, it is clear that believe in and advocate, says Nick
investors today expect higher levels of Pollard, managing director, Asia Pacific
transparency and communication than at CFA Institute.
ever before.
FAR AND WIDE
At the same time, they are increasingly To kick-start a new initiative aimed at
holding their investment managers to achieving just this, the organisation
the highest ethical standards, while they has embarked on a far-reaching brand
are, as investors, always laser-focused advertising campaign.
on returns.
This involves billboards across key
Meeting these requirements is no easy markets in Asia including Hong Kong,
task. But it demands a certain level of Singapore, India, China and Australia,
professionalism, bolstered by technical as well as in other parts of the world.
knowledge and market experience.
We want to get the message across that NICK POLLARD
This is where CFA Institute believes it we are not just focused on an examina- CFA Institute

can flourish. And especially in the type tion credential, but instead we are the
of market environment that is now con- professional body of the investment
fronting asset and wealth managers. management industry, says Pollard.

We intend to more strongly articulate The headlines used in the campaign aim vestment service and they deserve the
the value of the CFA designation to to underpin this message. Some of these highest ethical standards. And: 20
investors such that industry firms un- include the following slogans, for years of investment management expe-
derstand the benefits of employing example: My clients expect great in- rience and putting investors first.

24 WEALTH MANAGEMENT IN ASIA 2016

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EXPERT INSIGHTS

What a CFA designation

means in practice

According to CFA Institute,

practitioners who are
charterholders are uniquely
positioned to serve clients needs
for several reasons:

They are trained in the

highest industry standards
and best practices which
translates to world-class
investment knowledge, more
insightful questions and
deeper understanding of the
To give the message more meaning, CFA the need to raise the bar higher, espe- global economic climate,
Institute has also called on charterhold- cially in terms of market knowledge. resulting in greater perceived
ers who are active within their local value of client service and
firm engagement
communities to feature prominently. in TIMING
the campaign. It might seem like a good point in the
They are bound to a client-
market cycle for CFA Institute to be first duty of care, loyalty,
We want to show the range of people giving some clear and strong reminders disclosure and compliance,
who are charterholders, in terms of to the investment community about the putting investor needs first
what they do as well as the markets we need for professionalism and integrity.
They annually attest the
are in, says Pollard.
Standards of Professional
Few market practitioners could argue
Conduct, which informs
While the messaging is consistent glob- with the fact that the time has come to professionalism and integrity
ally, some tweaking for each local more successfully equate the CFA In- of capital markets, duties
market is an important feature of the stitute brand with an established profes- to clients and employers,
campaign. In Hong Kong, for instance, sion akin to the legal, medical and investment analysis and
recommendations, and
the organisation is looking to explain accounting professions.
conflicts of interests
bolstering client trust and
firm integrity

Ultimately, CFA Institute says it is

focused on getting more employers to
demand professionals with the CFA
designation.

And in particular, across Singapore

and Hong Kong, for example, it is
looking to increase visibility among
private banks, family offices and in-
vestment managers.

26 WEALTH MANAGEMENT IN ASIA 2016

 ARE YOU INVESTING
IN YOUR CHILDRENS
FUTURE?

Everyone wants the best for their children and none

of us know what the future holds. We believe that with
a little forward planning it is possible to give your
children the best future and the best education.
The key is to start planning early.

ST. JAMESS PLACE WEALTH MANAGEMENT

Tel: +65 6536 0121 | Email: info@sjp.asia | Web: www.sjp.asia

The St. Jamess Place Partnership and the titles Partner and Partner Practice are marketing terms used to describe St. Jamess Place representatives.
Members of the St. Jamess Place Partnership in Singapore represent St. Jamess Place (Singapore) Private Limited, which is part of the St. Jamess Place Wealth
Management Group, is regulated by the Monetary Authority of Singapore and is a member of the Association of Financial Advisors (Singapore).
Company Registration No. 200406398R. Financial Advisers Licence No. FA100026.
St. Jamess Place Wealth Management plc Registered Office: St. Jamess Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom.
Registered in England Number 4113955.
FIRM PROFILE

The role for boutiques in Asias

new wealth landscape
Febby Avianto of Falcon Private Bank explains why institutions of boutique size are more
agile and aligned with their clients both in terms of culture and outcome, and why they
have a key part to play in Asias evolving HNW and UHNW market.

Amid the polarisation of private banking CLOSER RELATIONSHIPS PAY OFF

in Asia, the boutique players have an To articulate where it is important for a
opportunity to shine. private bank to deliver something dif-
ferent, Avianto defers to the people
Despite the many challenges facing all factor. This comes down to the quality
industry players, as the needs of HNW of the RM (relationship manager) and
and UHNW clients change, so too does the understanding that they have of
the potential to offer them more than their clients businesses and personal
just portfolios and products. financial needs, he explains.

There is a need to not only manage their This then feeds into ensuring a team-
wealth, but also to help them grow their based approach.
business and navigate the relationship
between their personal and business I have worked in big banks, but I person-
wealth, both offshore and onshore, ally decided to join Falcon Private Bank
explains Febby Avianto, head of private because sometimes, big banks can be
banking for Falcon Private Bank in Asia. less flexible when meeting the many FEBBY AVIANTO
different needs of clients, adds Avianto. Falcon Private Bank

And these requirements remain, despite

the political or economic situation. Investment opportunities are one such
example. For us, there is no limitation
The key, he adds, is to be flexible enough in the same way as there might be in
to adapt to the approach that will suit big institutions, like having to work with Putting clients with similar goals and
each client. This is made possible within the investment banking side of the busi- interests together is also an important
a bank with a staff of 400 compared with ness, or requiring minimum revenue to value-add. Take a client in the prop-
a bank which has over 10,000 employees. do a deal, he explains. erty business, for example, who needs

28 WEALTH MANAGEMENT IN ASIA 2016

FIRM PROFILE

financing for his building. Their local that new wealth gets created in pockets.
bank will likely charge them a rela- Coffee and rubber, for instance, come
Falcon Private Banks
tively high interest rate due to the from the small city of Lampung, requir- three-pronged value
nature of such a project. ing bankers to get close to the producers proposition
and distributors of tractors.
This is where Avianto says the bank can Swiss heritage
help. We dont only help the client who Thats why we believe having a sea-
A Swiss-made experience
has a hotel he wants to sell, but I will soned private banker who also under-
backed by 50 years of
find a client who wants to buy that stands the corporate banking market is advisory and investment
hotel, he explains. necessary, says Avianto. competence to its clients
The Swiss heritage caters
To do this, you have to understand each They need to be able to talk about the to HNW individuals,
clients business, he adds. business, he adds. entrepreneurs and wealthy
families in Asia

This relies initially on an RM being able Mining these opportunities also involves People
to talk to clients about the palm oil in- Falcon Private Bank collaborating with
dustry, for instance. local asset management companies and A genuine entrepreneurial
securities firms in each market. spirit and strong flexibility
This might then generate further advi- with clients interest at
the centre
sory business as a result of uncovering The rationale, says Avianto, is that global
An experienced
a need a client might have to hedge a transparency has made confidentiality management team in Zurich
position, for example, or to structure a redundant as a differentiator. to build on a track record
private equity deal. of service excellence and
This is forcing banks to compete purely flexibility throughout the
Being able to act quickly is another on their services, meaning customisation international franchise
Much greater importance
benefit of a boutique bank that Avianto based on an understanding of the client
on relationship quality
believes matters in such a match- and the local regulatory environment. than quantity, with each
making role. RM in Asia only managing a
The new tax amnesty in Indonesia is a select group of clientele to
LOCAL FLAVOUR good example, he adds. ensure personal dedication
As part of Falcon Private Banks aspi- and highly-customised
financial solutions
rations for growth and deeper pene- SOLID BACKING
tration in the key markets in South- Although Falcon Private Bank can Sustainable growth
east Asia, Avianto is focused on making promote its agility due to its size and
sure he has the right RMs targeting structure, Avianto recognises the value Organic expansion and
the right clients. of being ultimately owned by a sover- strategic focus on select
eign wealth fund. and emerging markets
(Switzerland, Eastern
We need to have local RMs to provide
Europe, GCC and South-
local content and knowledge in cover- Clients have more faith in us for being east Asia
ing our target markets, and they are owned by IPIC, as the sovereign wealth A solution-driven approach
not just looking at the big cities, but fund of Abu Dhabi, which is still rela- breeds core offerings in
also venturing into other parts of the tively secure, he says. Asia of portfolio and asset
country where we understand what management, advisory and
client lending
different types of clients in these places In addition to the financial stability that
From a regional hub in
need, explains Avianto. IPIC provides, it is a supportive parent, Singapore, growth plans
as Falcon Private Bank looks to grow in are focused on Indonesia,
In Indonesia, for example, some indus- Asia and maintain its emphasis on being Malaysia and Thailand
tries only grow in certain cities, meaning entrepreneurial.

30 WEALTH MANAGEMENT IN ASIA 2016

EVENT HIGHLIGHTS - ASIAN WEALTH MANAGEMENT FORUM 2016 - HONG KONG - FEBRUARY

Redefining business and

advisory propositions
Panelists at Hubbis 6th annual Asian Wealth Management Forum in Hong Kong in
February 2016 highlighted the importance of long-term thinking to business models,
scalability and how advice is delivered.

Perhaps the most significant take-away tion. Until compensation models are
from this get-together of 300-plus high- aligned with long-term goals and clients
Thank you to our sponsors
profile industry practitioners was the best interests, practitioners say the
face that far-reaching changes are un- industry will struggle with its evolution. Allocated Bullion Solutions
derway in Asian wealth management, Amicorp Group
especially in the private banking space. Private banks were also considering Infosys Finacle
EY
how important scale is to their likely
Henley & Partners
More specifically, speakers discussed success, on the back of various an-
Labuan IBFC
the fundamental shift taking place nouncements around consolidation, Morningstar
which should, ultimately, be good for most notably the EFG-BSI deal a couple Numerix
the industry, clients and shareholders of days before this event. Old Mutual Global
alike: greater transparency, more liquid- Investors
Principal Global Investors
ity, and enhanced regulatory oversight Yet local scale is also a key factor , given
Vermilion Software
along with the banks responsiveness that Asia typically requires a different
AB
to this. This reinforces the need for business model, skill-sets, people and AXA
institutions to identify and leverage off platforms. BEA Union Investment
what they are good at, rather than trying BVI House Asia
to be all-things-to-all people. Meanwhile, the increasing influence Deutsche Bank Wealth
Management
and numbers of independent asset
Enhanced Investment
Another strong theme was the impor- managers and multi-family offices is
Products
tance of incentives as a key tool in build- also considered positive for ensuring Fundinfo
ing the right type of advisory proposi- the long-term interests of clients. Global Prime Partners
HSBC Global Asset
Management
IIFL Private Wealth
Intertrust
J O Hambro Capital
Management
Legg Mason
Swiss Life
SwissAsia
Thomson Reuters
Tikehau Investment
Management

32 WEALTH MANAGEMENT IN ASIA 2016

Albert Chiu Anthonia Hui Antoine Candiotti Arjan de Boer David Varley
EFG Bank AL Wealth Partners Indosuez Wealth Management ANZ AXA

Eleanor Wan Eli Bitan Eric Lu Freeman Tsang Gaurav Kumar

BEA Union Investment Wingate Asset Management Deloitte Legg Mason Principal Global Investors

Harmen Overdijk Jan Bellens Jeroen Buwalda Jessica Cutrera Rohit Bhuta
CAIDAO Wealth EY EY EXS Capital Asia Crossinvest

Malik Sarwar Michael Levin Norman Chan Peter McMillan Philippe Legrand
HSBC Credit Suisse NAB Private Wealth Advisory Thomson Reuters London and Capital Asia

Pius Zgraggen Riccardo Lehmann Richard Collis Roger Bacon Roger Steel
OLZ Swiss Asia Asset Management Willis Towers Watson Citi Private Bank Sun Life Financial

WEALTH MANAGEMENT IN ASIA 2016 33

 Steffen Schade Ron Lee Sameer Chishty Wing Chan Xavier Burkhardt
AIA Goldman Sachs Streeton Partners Morningstar Tikehau Investment Management

Abhra Roy Aksel Kitowski Damien Ryan Diamond Lee Jennifer Lai
Infosys Finacle Numerix Ryan Communication Old Mutual Global Investors Henley & Partners

Kees Stoute Marcel Kreis Peter Golovsky Seamus Donoghue Shanker Iyer
Hubbis Hubbis Amicorp Group Allocated Bullion Solutions Iyer Practice Advisers

Hubbis is performing a very valuable service in bringing a lot of

[industry practitioners] together, putting them on the stage and
making them express opinions allowing a large audience to
formulate views. It is an industry-enhancing activity.
Lonnie Howell, Chairman, UCAP Asset Management
Lonnie Howell
UCAP Asset Management

34 WEALTH MANAGEMENT IN ASIA 2016

 Your Access to
Emerging Markets Opportunities
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FEATURE ARTICLE

Will private banking in Asia

thrive or wither?
As consolidation gathers pace and polarisiation within this segment continues in the face
of rising costs and thin margins, how should private banks adapt to thrive?

Merrill Lynch which, at USD1.44 trillion,

was marginally ahead of Morgan Stanley.
International banks tend There is then a big gap to Credit Suisse
to offer access to a wider in fourth place with USD687 billion in
range of products, services AUM, followed (in this order) by RBC,
and expertise that UHNW Citi, JP Morgan, Goldman Sachs, BNP
clients are more likely to Paribas and Deutsche Bank to round out
the top 10.
benefit from.
Even the average rise in net new asset
BERNARD RENNELL
growth of 33% on last years figures
HSBC Private Bank
could not compensate for the lower
values of client assets, the study found.

Asian private banking, on the whole,

also reflects the difficulties in making
Some of the recent global AUM figures notable slowdown in AUM and a the model work. Plus, Recent exits/
for private banks highlights the extent squeeze on operating margins with sanctions in the Asian region Barclays,
of the challenges that many of these market conditions and hesitant clients BSI, Societe Generale, to name just a
institutions face. also suggesting tough times ahead. few show that the landscape is getting
more competitive.
Research released by Scorpio Partner- Against this backdrop, UBS kept its place
ship in mid-July 2016, for example, at the top of the Scorpio Partnership Private banks are also realising that
highlighted the challenges that the global ranking of the 25 largest wealth although wealth in Asia is growing as
worlds biggest firms face in achieving managers, with more than USD1.73 tril- advertised, accessing this wealth is not
growth. Most institutions showed a lion in AUM, followed by Bank of America as easy as they think.

36 WEALTH MANAGEMENT IN ASIA 2016

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FEATURE ARTICLE

ment providers to increase their share

of wallet, she believes.
Another factor that leads
to success is being true to Private Banks and wealth managers
your culture. will need to focus on their core com-
petencies and areas where they can
demonstrate a clear value proposition
in order to benefit from the rise in
wealth [in Asia], she says.

RON LEE
Some of the key components necessary
Goldman Sachs
for survival and success, according to
Amanda Chen, deputy head of wealth
management, for Nomura in Asia ex-
Japan, are digital offerings in execution
and portfolio reporting, quality advi-
Notable in the Scorpio Partnership re- lenges around operations, technology, sory consultations and services, and
search, however, was the arrival of two and talent management. having a niche in the market where the
Chinese banks in the top 25 China institution operates.
Merchants Bank and ICBC both of The good news, says Jing Zhang Brogle,
which saw significant AUM growth on chief executive officer of Edmond de For Alvin Ma, Hong Kong-based senior
the year before. Rothschilds Hong Kong branch, is that managing director and head of private
research shows that many of the Asias banking at EFG Bank, it is all about fol-
STILL SCOPE FOR OPTIMISM HNW individuals hold less than one-third lowing a certain type of model. This
The various and mounting pressures on of their wealth with a wealth manager. includes: being AML/KYC/CDD clean
private banks are compounded by a and compliant; offering managed advi-
combination of shifting client demo- So there is considerable opportunity for sory rather than execution only; focus-
graphics and needs, and existing chal- private banks and other wealth manage- ing on solution-driven not just broker/

KEY PERFORMANCE INDICATORS FOR THE GLOBAL WEALTH MANAGEMENT INDUSTRY

Key Perform
mance Indicattor Average
A perce
entage changee YoY
TOP 25 BANK
KS ALL BANKS ALL BANKKS
2015 2015
2 2014
Asse
ets under management -1.7% -1
1.0% +2.0%
Net n
new money +33.0% -6
6.9% +18.4%
Incom
me +1.1% +0
0.5% -4.3%
Expe
enses -2.4% +1
1.4% -5.2%
Operrating profits -4.7% +0
0.6% +9.3%
Key Perform
mance Indicattor
TOP 25 BANK
KS ALL BANKS ALL BANKKS
2015 2015
2 2014
Cost income ratio 75.1% 80
0.0% 81.4%
HNW
W Client Engag
gement Score 68.6 (/100) 69.9
9 (/100) 69.2 (/100
0)

Source: Scorpio Partnership Global Private Banking Benchmark 2016 and Scorpio Partnership Client insight database, 2016

38 WEALTH MANAGEMENT IN ASIA 2016

 LETS SIMPLIFY THINGS.

Personal Wealth Management for the New Millennium

www.caidaowealth.com
FEATURE ARTICLE

dealer-oriented services; having quali-

fied, competent and licensed profes-
sionals; providing asset protection as [Clients] expectations
well as asset growth; and advising on in terms of yield on their
corporate advisory in lieu of net-worth investments have come
monetisation. down quite dramatically.

There will be further industry econo-

mies of scale via consolidation, in terms
of NNA, AUM, ROA, cost-income ratios,
FREDRIK LAGER
formula-based compensation, and talent
SEB Private Banking
development and retention, he adds.

This also shows the importance of what

international banks can bring to the
table over some of the domestic
players amid expectations that local
private banks will play a greater role At the same time, Bernard Rennell, In this respect, he believes that inter-

going forward. regional head of global private banking, national banks tend to offer access to
Asia-Pacific, global head of family gov- a wider range of products, services and

NEW CLIENT DEMANDS ernance and family enterprise succes- expertise that UHNW clients are more

In line with the generally savvier, more sion, HSBC Private Bank, says that likely to benefit from. This can range

demanding HNW individuals, in part when a client is considering the right from access to investment opportuni-

due to the rise in availability of informa- private bank for their needs, one of the ties, including access to hedge funds,

tion via the web and increased market top concerns is how to find a bank that private equity funds and real estate club

competition, the products and services understands the region, and therefore deals worldwide, he explains, as well

they are looking for today are different their needs, while giving them access as wealth planning services, such as

from those before. to investment products and wealth family governance, trust and company
solutions that help them achieve their administration and philanthropy advi-

Plus, adds Fredrik Lager, general long-term goals. sory services.

manager at SEB Private Banking in Sin-

gapore, clients are much more cautious
today compared with only a year ago.
Their expectations in terms of yield on TYPES OF INITIATIVES TO CLOSE PROFITABILITY GAP
their investments have come down
quite dramatically.

In line with this, clients are now looking

for something extra from their private
bank guidance and direction, not only
on investments, but also on family,
philanthropy, retirement, succession
and estate planning.

It is less transaction focused and more

sophisticated financial planning, says
Marc Van de Walle, global head of prod-
ucts at Bank of Singapore. Source: Oliver Wyman analysis

40 WEALTH MANAGEMENT IN ASIA 2016

FEATURE ARTICLE

Clients also increasingly expect to play

a more active role in managing their
portfolios. As a result, clear and full There will be further
accountability in advisory services and industry economies of
execution is important. scale via consolidation.

Standardised product offerings are no

longer sufficient to compete, says
Chen. Clients expect banks to be able
to provide wealth solutions beyond the
ALVIN MA
investment portfolio, for example, M&A
EFG Bank
advisory, corporate finance and other
investment banking solutions. They also
expect transparency in fees, potential
returns on investments as well as tai-
lored advice.

Private banks should also rise to the be searching for new ideas to diversify long-term plan, explains Brogle. Trust
independent asset management (IAM) their client base, tap potential in un- is also key. Many clients have multiple
challenge. According to Thusitha de tapped markets, enhance accessibility private banking relationships.
Silva, director at Cerulli Associates, they to services through digital tools, focus However, she adds, we are seeing a
can provide opportunities for opening on value-added advice and, at the same gradual shift to consolidating their
up alternative revenue streams. Instead time, have a strong risk management assets with fewer relationships. They
of looking at IAMs as a threat, private framework for clients as well as product prefer to go with banks they can trust
banks should cooperate to form an due diligence. and who offer them the best value
ecosystem where [everyone] can mutu- proposition to suit their needs.
ally benefit, he explains. We see this Further, beyond access to the latest
happening to some extent in Singapore. products or new ideas, ever-more im- Asian wealth managers also need to
portant to clients is receiving relevant differentiate between the needs of the
More generally, in a falling fee environ- guidance and timely advice. They ap- newer millionaires and those who have
ment and as investors become more preciate that we can help them achieve held their wealth for longer periods.
savvy, he says private banks should also their objectives with a holistic and
China is where most new millionaires are
found; whereas other countries will com-
paratively have more second- or third-
generation wealth. The latter will be open
Following the tide of to discretionary services, while the former
should be approached with advisory so-
digital banking, private
lutions first, says Van de Walle.
banks have to build up
digital platforms for In addition, adds Michael Blake, chief
communication, execution executive officer, private banking, Asia
and client servicing. at UBP, there is growing internation-
alisation of Chinese wealth.
ALAN LUK
Hang Seng Bank The business has reached greater ma-
turity a decade on, he explains, and
Chinese families are much more open

42 WEALTH MANAGEMENT IN ASIA 2016

Swaen Capital Pte.Ltd.
No 8 Eu Tong Sen Street
#19-89 The Central
Singapore 059818
Tel: (65) 3109 1932
Email: clientservice@swaencapital.com
FEATURE ARTICLE

to traditional wealth management ser-

vices than they were before. The other
big change is a greater openness to Chinese families are
diversification and a desire for an inter- much more open to
national footprint that wasnt relevant traditional wealth
to a lot of people before. management services
than they were before.
INVESTING IN INFRASTRUCTURE
Other than a comprehensive suite of
products and range of solutions, having
MICHAEL BLAKE
the right infrastructure and people has
UBP
hence become essential for private
banks to succeed.

At Bank of Singapore, for example,

Van de Walle says technology has
become important in the quest for
operational efficiency, to be able banking, private banks have to build up CONSISTENCY AND CULTURE
manage costs, mitigate risks and give digital platforms for communication, Regardless of size and style of offering,
more value to clients. We are invest- execution and client servicing. to Ronald Lee, co-head of private wealth
ing in cybersecurity, data manage- management at Goldman Sachs in Asia
ment, data analytics and surveillance. Yet having this technology and infra- ex-Japan, says it is impossible to over-
For advisory, we are investing in port- structure is not the end-goal in itself. estimate the value of having a consis-
folio analytics so that we can advise The rapid advancement of financial tent strategy. Another factor that leads
clients in a timelier manner, with more technology has prompted numerous to success is being true to your culture.
details in terms of performance at- discussions about whether the machine
tribution and risk management. can replace the banker, says Van de He added that it is key for firms to have
Walle. My answer to this question is, a differentiated offering, given that
The goal, he explains, is to enable until the machine can sense a human clients in Asia are bombarded for choice.
private bankers to provide data for beings exuberance or fears, not yet.
clients who want it, anytime, anywhere This is perhaps even more important in
and on any device. Indeed, understanding clients needs an environment where there are clearly
will always remain paramount to the more challenges ahead.
According to Chen, fintech will change business of private banking. Getting
the way private banks do business. to really know a client and understand- These include more competition from
They are in competition with non- ing their subtle needs is something non-financial companies that are pro-
banks in offering multi-channel and technology cannot do, he adds. I viding alternatives to private banking
digital models which offer transparency believe humans require humans to in- services, such as IAMs.
and speed in execution, she explains. teract with in the field of investments.
The mobility of services and informa- Against this backdrop, private banks
tion will change clients behaviour to As a result, recruiting the right talent have to figure out their strategies and
become more self-directed, and the continues to be the key for growth for positioning, says de Silva, as more
relationship managers relevance in an all private banks. sophisticated aspects of wealth man-
advisory role will be challenged. agement like asset selection, alloca-
Indeed, explains Chen, intelligent, tion and rebalancing of portfolios
Aggress Alan Luk, head of private technical and finance savvy advisers become automated and available to
banking and trust services at Hang Seng will be imperative as markets become a wider wealth spectrum of investors
Bank: Following the tide of digital more complicated. at lower cost.

44 WEALTH MANAGEMENT IN ASIA 2016

 WEALTH PLANNING

You know where to go.

We know how to guide you there.
Moving abroad can be very complicated. There are many things to consider, including the requirements of the
different regulatory regimes to which cross-border wealth planning is subject. Let us guide you through the
legislative labyrinth, and help you avoid unnecessary, time-consuming paperwork, as well as any unwelcome
(and often expensive) surprises along the way. No matter where life takes you, Nordeas in-house wealth planners
and their external network of experts can ensure that you are well prepared to meet the challenges that moving
abroad brings. Find us at www.nordea.sg/contacts or call +65 6597 1070 to arrange a meeting.

Nordea Bank S.A, Singapore Branch is part of Nordea Group, the leading financial services group in the Nordic and Baltic Sea regions. Some products and services may, due to local regulations, not
be available to individuals resident in certain countries and their availability may depend, among other things, on the investment risk profile of persons in receipt of this publication or on any legislation
to which they are subject. Nothing in this publication should be construed as an offer, or the solicitation of an offer, to purchase, subscribe to or sell any investment or product, or to engage in any other
transaction or provide any kind of financial or banking service in any jurisdiction where Nordea Bank S.A., Singapore Branch or any of its affiliates do not have the necessary license. Published by
Nordea Bank S.A., R.C.S. Luxembourg No. B 14.157 on behalf of Nordea Bank S.A. Singapore Branch, 138 Market Street, #09-03 CapitaGreen, Singapore 048946. www.nordeaprivatebanking.com
subject to the supervision of the Monetary Authority of Singapore (www.mas.gov.sg).
EXPERT INSIGHTS

Why private banks will

live or die on innovation
BNP Paribas Wealth Management has carved out billionaires as a strategic growth
segment, says Mignonne Cheng, explaining that this is an industry where being
innovative and providing real solutions will be the difference between success and failure.

Despite the many challenges facing is balanced with the fact she also knows
private banks in Asia, recent signs the status quo faces imminent change.
suggest this is an industry that continues
to thrive. I believe consolidation of the industry
is likely to continue, as private banks
A quick look at the latest World Wealth need to achieve scale and efficiency,
Report from CapGemini, for example, she explains.
support this. It shows the pace and
volume of growth, with Asia Pacific ex- And as someone who has been active in
ceeding North America for the first time. the regions financial markets for well
over three decades, she is well-placed
The spotlight on compliance and gov- to judge the likely evolution in the look-
ernance is a crucial factor too. The and-feel of the marketplace.
high bar for capital requirement, the
increased transparency and greater STAYING AHEAD
scrutiny from regulators, and the The way for private banks to ensure
prudent approach of private banks to success amid todays challenging envi- MIGNONNE CHENG
business management, will provide BNP Paribas Wealth Management
ronment will be to work hard at innova-
clients with a stronger sense of safety tion. This is in order to maintain rele-
and trust, says Mignonne Cheng, vance and better serve clients
chairman and chief executive officer ever-changing needs, says Cheng.
for BNP Paribas Wealth Management
in Asia Pacific. In particular, she explains, when touch, highly-tailored, holistic yet
dealing with UHNW families, there is trustworthy personal services of hand-
Yet at the same time, Chengs bright no other type of offering which can picked, rigorously-selected and
outlook for private banking in the region provide the same combination of high- trained private bankers.

46 WEALTH MANAGEMENT IN ASIA 2016

 They must consistently present the
right ideas to clients, seriously taking
Identifying the next Supporting wealthy
entrepreneur into account the relevant risk profiles women
of those clients.
Another sign of the innovative As part of its continued
nature of BNP Paribas Wealth SERVING THE MEGA WEALTHY approach to clear segmentation,
Management was its 2016 for the second year, BNP
IN ASIA
BNP Paribas Global Paribas Wealth Management
This is perhaps most relevant for the
Entrepreneur Report. brought together (in July 2016)
ultra wealthy, which is an increasingly around 30 women who lead
The survey revealed the important target segment for BNP international fast-growing
emergence of a new generation Paribas Wealth Management. businesses in 12 countries
of entrepreneurs under 35 across Europe, the US, the
years old. Middle East and Asia, from
In line with this, the bank is rolling out
which there has been strong
a new initiative, Mega Wealth, to focus
Dubbed the Millennipreneurs, participation both times.
these are business starters from on the wealthiest individuals.
Generation Y, born between This exclusive Women
1980 and 1995, also known This follows on from the success that Entrepreneur Programme
as Millennials. the private bank has found over the last aimed to provide participants
with a programme specifically
few years in on-boarding billionaire
Their approach to business, in geared to the real issues facing
clients. Indeed, it has reached a penetra-
terms of their ambitions, results entrepreneurs, along with the
and leadership style, differs tion rate of 17% in Asia, and close to opportunity to network and
from that of other generations. 50% in Hong Kong. discuss their views on growth,
For example, they create innovation and leadership.
more companies, with larger This client segment calls for a holistic The customised training
headcounts and higher programme was designed by
banking approach, integrating invest-
target profits. Stanford University.
ment banking and wealth management
They are also generally solutions, says Cheng.
interested in the new economy,
but are equally active in many
traditional sectors including
retail and professional services
such as law and accounting.
The billionaire segment is our strategic growth lever.
The report was based on a
survey conducted by Scorpio BNP Paribas Wealth Management is gearing
Partnership, analysing the up its value proposition to this segment,
behaviour of roughly 2,600 in order to remain as the preferred partner to this
HNW and UHNW entrepreneurs
across 18 markets in Asia, increasingly-important population of clients.
North America and Europe, with
aggregate wealth of over
USD17 billion.

For example, this demands specific BNP Paribas Wealth Management is

credit solutions as well as private invest- gearing up its value proposition to this
Private bankers, as the last bastion of ment opportunities as two of the key segment, in order to remain as the pre-
trust, must also maintain an enhanced drivers of the initiative. The billionaire ferred partner to this increasingly-
awareness of their clients interest and segment is our strategic growth lever, important population of clients, she
protection, explains Cheng. adds Cheng. explains.

WEALTH MANAGEMENT IN ASIA 2016 47

EXPERT INSIGHTS

Maybank keeps focus on

sustainability in private wealth
The Malaysia-based bank is continuing to build-out its offering to HNW clients at home
and across the region, but with the focus on ensuring that any bankers and client assets
are sticky, says Alvin Lee.

Alvin Lee has a clear vision about the Maybank has also implemented a new
growth he wants to see for the private Avaloq platform to ensure it has the
wealth business over which he presides right IT systems and processes to deliver
at Maybank but he is also willing to an enhanced suite of products and ser-
take his time in ensuring it is the right vices to what was largely a retail-ori-
type of growth. ented business previously.

More than two-and-a-half years since Now, the priority is scaling up in order
the Malaysian banking group launched to drive performance and mainly at
a formal offering for HNW and UHNW the front-line. But this doesnt just
individuals, Lee believes things are well mean hiring to bulk up the numbers at
on the way to making the investment the expense of the strategy of longer-
worth it. term sustainability that Lee is adamant
about maintaining.
For example, he counts roughly USD11
billion in AUM across three booking We need to hire relationship managers
centres, including the units hub in Sin- (RMs), but they need to be the right ALVIN LEE
gapore, Malaysia and Hong Kong as a people who also are a cultural fit for us, Maybank

newer, smaller location. he explains.

This has come from a combination of This comes down to how they view
onboarding some of the wealthier exist- their careers and also the approach
ing clients from the retail bank onto the they take to advising clients. In line with to bring in bankers who are focused on
private wealth platform, as well as at- this, Lee stresses the importance of the developing a long-term career in
tracting new clients to bring assets to bank ensuring that its customers make private wealth management not
the business. money too. To achieve this, he wants simply look to push products.

48 WEALTH MANAGEMENT IN ASIA 2016

 THINK INDEPENDENT. THINK TTG
TTG is a leading independent private wealth manager, committed
to providing unbiased professional investment advice to private
clients, companies, trusts and charitable organisations.

Our goal is to develop long-term partnerships with our relationship managers

and clients, founded on mutual trust, where the preservation and ongoing
management of our clients wealth is the primary objective.

We are regulated by the Securities and Futures Commission of Hong Kong

and are part of the Swiss private banking group CBH Compagnie Bancaire
Helvtique SA.

Suite 501A, 5/F, 9 Queens Road Central, Central, Hong Kong

Website: http://www.ttg.com.hk/
Email: info@ttg.com.hk
Tel: +(852) 2869 0801 Fax: +(852) 2523 4610
EXPERT INSIGHTS

TAKING ADVANTAGE PERKS OF BEING FRESH

While on one hand the timing for expan- Starting a private wealth proposition
Getting the ball rolling
sion might not seem ideal given the from scratch has also enabled Lee to
wider market environment, there will benefit from the advantage of not having The birth of the private wealth
always be challenges and questions over to deal with a lot of the legacy systems component of the Community
the right time. and processes which weigh down some Financial Services (CFS) business
at Maybank, essentially meant
of his peers.
the creation of a new unit.
The Asian private banking industry, for
example, is characterised by high costs He also applies this type of thinking to The bank realised the potential
in terms of regulation and the general implementing his plans for aiming to do to access a ready-made
running of the business. more digitally. customer pool through a more
dedicated offering. This could
also help it generate new income
Indeed, this has been a factor over the Yet it is still early days. So, for the time
streams and meet growing
past 12 to 24 months in many European being, he says he is looking to leverage
demand from customers for a
private banks, in particular, reviewing on the other parts of the Maybank broader service.
the extent and scope of their operations group, such as the Kim Eng securities
in Asia. venture and the retail bank. In Malaysia, for example,
Maybank has more than 12
million customers, and is the
largest bank with No.1 overall
market share in consumer loans,
retail deposits, unit trusts, loans,
retail fixed deposits and CASA.
The private wealth industry has to be The group also has a presence in
very careful not to let costs escalate to all 10 ASEAN countries.
the point where they cannot sustain or provide
Lee was then hired to take
the required level of service or solutions. charge of the private wealth
business and harvest what
the bank saw as a segment
which was rightfully already
its own. And it took a logical
step by basing the team out of
Singapore. This enables it to
The private wealth industry has to be Ultimately, he wants to continue to service a combination of local
very careful not to let costs escalate to focus for the time being on those client clients as well as use its offshore
the point where they cannot sustain or leads which are what Lee calls warm. desk to cater to clients based
provide the required level of service or overseas but who want to bank
solutions, says Lee. The conversion rate so far has been in Singapore.

around 65%.
The view was that in the
He is also aware of the need to be more medium term it could be a
creative in how and where he looks for In another two to three years time, he source of liquidity, and in the
new talent to bring on board. wants to have between 6,000 to 7,000 longer term, one of profitability.
private wealth clients the rationale Even though it was decided to
And he sees a big opportunity to hire being, that if each of them has, on position the private wealth arm
within the consumer bank, the
corporate and investment bankers into average, between USD2 million and
strong collaborative culture in
a private banking role. USD5 million with Maybank, then Lee the group ensured it is closely
can look to roughly USD20 billion in linked to the corporate and
There is a lot of re-tooling and training AUM. This is what he believes is the investment banking divisions.
needed to do this, but this shows that minimum critical mass to work with in
there are potentially other areas to tap. todays market.

50 WEALTH MANAGEMENT IN ASIA 2016

FIRM PROFILE

How HSBC is pursuing its

desired private banking model
HSBC Private Bank took some bold decisions a few years ago to redefine its risk appetite.
With a clearer sense of the type of business it wanted to do, and with whom, this mandate
had allowed Sandeep Sharma, its head of South-east Asia, the opportunity to position the
business for growth.

The first half of 2016 has been a tough Everything we have done in recent
time for all private banks. years is based on pursuing that vision,
explains Sharma.
The generally-unfavourable investment
environment due to the volatility and AHEAD OF THE CURVE
uncertainty has resulted in lower bro- The strategy review that the bank did a
kerage and trading activities, worldwide. few years ago was important in enabling
it to define its risk appetite.
This has highlighted the importance of
business models built on more in-depth, For example, it defined the markets in
needs-based conversations with clients, which it wants to grow, resulting in a
stemming from a deeper understanding consolidation leading to it operating
of their needs and goals. today in key growth markets where the
bank has a well-established HSBC
For HSBC Private Bank, this is exactly Group presence.
the direction it has been heading.
It also combed through its client book SANDEEP SHARMA
We have defined our strategy as being to ensure that it banks with only the HSBC Private Bank

the preferred private bank for clients right kind of clients, where they are com-
of the wider group, says Sandeep mitted to being compliant with its tax
Sharma, head of global private banking, transparency requirements and efforts
South-east Asia at HSBC Private Bank. to combat financial crime risk.
private banking industry will become
This includes servicing its commercial In Sharmas view, this was a forward- uniform. Ultimately, a banks platform
banking customers, to meet their per- thinking move. Over the next five years, and proposition will define its success,
sonal wealth needs. I think the risk appetite for the whole not only its ability to arbitrage risk.

52 WEALTH MANAGEMENT IN ASIA 2016

 Hong Kong

BVI
Singapore

Asian Focus,
Global Solutions

Asias Leading Trust and Corporate Services Firm

Singapore Hong Kong BVI

Heritage Fiduciary Services Pte Ltd Heritage Corporate Services (HK) Limited Heritage Trust Services (BVI) Limited
50 Raffles Place, 902, 9th Floor, Ground Floor, Coastal Building
#15-05/06, Loke Yew Building, Wickhams Cay II,
Singapore Land Tower, 50-52 Queens Road Central, Road Town, Tortola
Singapore 048623 Hong Kong British Virgin Islands VG1110
Tel: (65) 6533 0774 Tel: (852) 2527 9396 Tel: (284) 494 7077
Fax: (65) 6533 0224 Fax: (852) 2527 0762 Fax: (284) 494 7078
Email: info@heritagetg.com Email: hkenquiry@heritagetg.com Email: info@heritagetg.com

www.heritagetg.com
FIRM PROFILE

In terms of segmentation, although We see numerous cases where clients

HSBC Private Banks minimum invest- have a requirement for their business
HSBCs Private Wealth
ible assets for new client is USD5 at short notice. If they have an existing
Entrepreneurs Proposition
million, given its focus is on serving the relationship with the private banking
private wealth needs of HSBCs com- division, it gives more confidence to This was introduced globally
mercial banking clients, it has intro- the commercial banking team to turn in 2014 to provide access for
duced a Private Wealth Entrepreneur around a solution very quickly, ex- existing commercial banking
clients to private wealth
(PWE) programme. plains Sharma.
solutions and advisory.

PWE is an incubator proposition offered This works the other way round too. It is offered to HSBC Corporate
to HSBC Commercial Banking clients For the banks commercial banking and Business Bankings most
who are on course to building busi- clients, given that much is known about valued and high-potential clients
nesses and, as such, expected to create them and their business, it is much that are on the path to creating
their personal wealth through
wealth in the coming years. Essentially, easier for the private banking business
their businesses.
these clients get to enjoy HSBCs private to consider the individual as a client by
banking solutions and services even if already having background on their The bank adopted a team-
they might not meet the minimum in- business and how theyve accumulated based service model, whereby
vestible assets. their wealth. Clients prefer to deal with a dedicated team comprises an
banks which know all aspects of their RM, relationship executive and
wealth adviser, to provide these
From Sharmas perspective, the upshot business and their family, he adds.
clients with wealth advisory and
of this re-positioning has created capac-
investments solutions.
ity for the team to grow its business in ADDING CAPACITY
South-east Asia, by effectively tapping Sharma is certainly not complacent.
into the rising affluence in ASEAN. We now need to add capacity.

For example, in the 2016 Boston Con- There are various approaches that the erational wealth, he adds. Given that
sulting Global Wealth report, Asia bank is taking. One of them is to create HSBC has one of the largest corporate
Pacific (ex Japan) is expected to hold greater efficiency and improve produc- banking portfolios globally, we will
a projected USD60 trillion of wealth tivity by ensuring its employees have benefit greatly if we are able to hone
in 2020. the necessary training and resources in on our collaboration framework with
to reach his or her potential. other group businesses and offer Asia
It is also likely to surpass Western business owners with a comprehensive
Europe as the second wealthiest region The bank is also selectively recruiting, suite of private wealth solutions.
in 2017. The report also highlighted that especially for seasoned relationship
Asia Pacific (ex Japan) is projected to managers (RMs), product specialists Yet size is less important compared
hold 27% of global wealth in 2020 and and middle-office personnel to better with client satisfaction and the speed
its growth is largely driven through tap into potential opportunities that of providing relevant solutions.
creation of new wealth. lie within its commercial, corporate and
retail banking divisions.We have a lot It also needs to be about more than just
THE BANK OF CHOICE of untapped potential internally, explains bringing in people in order to just bulk
The HSBC Private Bank mission is to Sharma. Last year, net new money glob- up the numbers. Sharma is looking
leverage its existing client base as part ally was largely driven by internal col- instead for RMs who believe in the
of the broader Group. laboration. I dont think we are even close banks risk appetite and why it has
to mining half of these untapped internal changed. It doesnt want to populate
This is based on the viewpoint that more opportunities. its private banking business with indi-
and more clients are looking to work viduals still of the mind-set where they
with one bank for all their corporate and As Asias wealth grows so will the believe they need to be everything to
private banking needs. demand for the transfer of inter-gen- every client.

54 WEALTH MANAGEMENT IN ASIA 2016

 Integrating your
business objective
with ours
We believe that your business success is our success. We
work with you through every phase of your business and
care for your results as a trusted partner and adviser as
though we are a part of your business.

International & Domestic Tax

Trusts & Foundations
Family Office Structuring and Support Services
Regulatory & Compliance
Immigration & HR
Company Formation & Administration
Accounting & Financial Reporting

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SINGAPORE | HONGKONG | iyerpractice.com
EVENT HIGHLIGHTS - INDEPENDENT WEALTH MANAGEMENT FORUM 2016 - MARCH

Independent firms can grab more

AUM, but growth hurdles remain
Sentiment among participants at Hubbis annual get-together for the independent wealth
community in Singapore in March showed the optimism for this industry segment to
become more prominent but only if it can engender enough client trust in the model
and lure more competent advisers from private banks.

Increasing awareness among HNW and uncertainty; and the growing appeal of
UHNW clients of the added benefits of access to alternatives not present within
Thank you to our sponsors
an independent adviser especially many bank offerings.
during market distress is a key factor Asia Cornerstone
driving optimism among practitioners At present, less than 5% of private Leonteq Securities
that this segment can control more wealth AUM in Asia is overseen or Pershing
Henley & Partners
client assets and wield more influence managed by independent firms. But in
Heritage Trust Group
amid an increasingly polarising land- 3 years time, two-thirds of speakers
IRESS
scape within Asian wealth management. and delegates from IAMs, MFOs, Principal Global Investors
other independent firms, and some Allocated Bullion Solutions
Independent asset managers (IAMs) and private bankers predicted that AXA
multi-family offices (MFOs) stand to between 10% and 20% of this AUM will EFA Group
Expersoft Systems
benefit from a mix of dynamics playing be with firms such as IAMs and MFOs.
J O Hambro Capital
out at the moment: growing client wari-
Management
ness and skepticism about the service The main opportunities for these firms Pictet
and performance they get from their were considered to be: capitalising on Swiss Asia
private banks; a search by clients within their flexibility; capturing clients unhappy Iyer Practice Advisers
the current financial market turbulence with the service and performance from Thomson Reuters
Tikehau Investment
for models offering disruptive innova- private banks; hiring private bankers and
Management
tion combined with greater flexibility advisers disgruntled with higher compli-
VP Bank
via a more tailored and relevant service; ance scrutiny; consolidated and com-
a desire for genuine independent guid- prehensive and unconflicted service;
ance to manage market volatility and and flexible product range.

Yet, the hard work is by no means over.

And a number of hurdles remain. The
top five challenges included: the compli-
ance burden and keeping up with
change; acquiring clients and convinc-
ing them its worth paying a fee; being
able to attract enough talent (pay, com-
mitment, prospects, etc); bank plat-
forms DDC process; and raising suffi-
cient AUM for economic viability.

56 WEALTH MANAGEMENT IN ASIA 2016

Angelo Venardos Anthonia Hui Federico Donato Filippo Fabbris Liam Collins
Heritage Trust Group AL Wealth Partners FFA Asia Oclaner Asset Management PwC

Rashmi Lodha Stirling R Larkin Khing Go Leonardo Drago Olivier Destandau

Amicorp Larkin Group Marc Faber Group AL Wealth Partners EightStone

Patricia Thomas Paul Gambles Paul Hodes Philipp Piaz Rajini Kodialam
IRM Family Office MBMG Group Citibank Finaport Focus Financial Partners

Rohit Bhuta Yash Mishra Rolf Haudenschild Shanker Iyer Steve Brice
Crossinvest Taurus Wealth Advisors Maroon Analytics Iyer Practice Advisers Standard Chartered Private Bank.

Steve Davies Suresh Withana Ted Low Steve Knabl David Varley
Javelin Wealth Management Tikehau Investment Management GAO Capital Swiss Asia AXA

WEALTH MANAGEMENT IN ASIA 2016 57

 Dominic Volek Jeff Medina Jessica Cutrera Mark Nelligan Matthew R Byer
Henley & Partners Asia Cornerstone Asset Management EXS Capital Asia Pershing Securities Spectrum

It is good to see this forum is growing

every year... and this year seems to be a
breakthrough in terms of the optimism for
this segment of the industry.
Urs Brutsch, Managing Partner & Founder, HP Wealth Management
Peter Williams Urs Brutsch
Leonteq Securities HP Wealth Management

58 WEALTH MANAGEMENT IN ASIA 2016

 INTERNATIONAL ASSETS
TAX EFFICIENT STRUCTURING

Photo archideaphoto - Fotolia.com

MULTI - FAMILY OFFICE TRUSTS, FOUNDATIONS REAL ESTATE & YACHT TAX, ESTATE
ADVISORY & ADMINISTRATION & CORPORATE OWNERSHIP & ADMINISTRATION & RESIDENCE PLANNING

HONG KONG
SINGAPORE
MONACO
BVI
Contact: Peter Brigham
Email : p.brigham@rosemont.hk
www.rosemont-int.com
FIRM PROFILE

Focusing on what youre good at

As the fifth generation of the founders of Bordier & Cie, Evrard Bordier has a unique
perspective. And he is looking beyond shorter-term industry pressures to build a genuine
relationship-driven offering that dispels the myth that scale is critical for survival.

Evrard Bordier straddles two overlap- ADAPTING TO THE MARKET

ping worlds: on one hand, he runs a The first half of 2016 has been transfor-
private bank, trying to give his clients mative for Bordier & Cie in many ways.
the best service he can; on the other,
he is the fifth-generation of a success- From a reputational and regulatory
ful family business. adherence point of view, the private
bank has a clean bill of health, and this
He balances the two as managing is credited to the robustness of its op-
partner of Bordier & Cie a 170-plus erational infrastructure.
year old independent, international
private bank. Yet Bordier acknowledges the need to
regularly review the banks overall busi-
This also gives him a perspective where ness strategy, especially against the
he can be pioneering in terms of devis- backdrop of the regulatory, margin and
ing a new strategy to stay relevant and other pressures he shares with his peers.
profitable as a boutique player in This is always a potential consideration,
todays environment. but what motivates me is the responsi- EVRARD BORDIER
bility I feel to my ancestors to build the Bordier & Cie

We have gone past the point in this best business we can, and one which will
industry where it is viable to run a small stand the test of time, he explains.
business, says Bordier. It is no longer
enough for the middle and back office He is also in quite a unique position
to keep pace with the scale of opera- insofar as he is able to look beyond the His relatively small scale also alleviates
tions. Banks today need enough infra- short-term pressures of revenue targets the need to rely on hiring hoards of new
structure to build the equivalent of a that might influence the strategy of bankers. Instead, he has the potential
20-storey building, regardless of size. many publicly-held institutions. to be opportunistic.

60 WEALTH MANAGEMENT IN ASIA 2016

FIRM PROFILE

Plus, it is arguably too difficult to extract that go beyond just managing their port-
the most successful relationship manag- folios, adds Bordier. We take pride in Profit by partnerships
ers today, anyway. executing a uniquely tailored touchpoint
strategy for each of our clients to bring In trying to do things differently
They tend to be financially-tied to their the Bordier experience to life. to its competitors, and at the
institutions, plus banks themselves have same time play to the banks
strengths, Bordier believes in
become a lot more effective at retaining These strategic brand touchpoints adapt
partnerships as a key way to
client assets, even when their top to clients individual needs and lifestyle secure new client assets and
bankers leave. preferences. Enhancing the ambit of grow profits in Asia, and without
our client servicing is an essential raising fixed costs.
The Bordier & Cie approach, therefore, element to deepening our clients trust
is to have more of a business develop- in us, he explains. This is important to being able
to weather the expected trend
ment team. We try to go systemati-
towards more onshore wealth
cally through a particular country, one In line with this, the firm is building its management going forward.
at a time. We are redefining how we repertoire of services that anticipate This poses a challenge to
approach the market, he says. the need for a more involved wealth boutiques like us, says Bordier.
Our model will never be geared
up towards having licences in
local markets.

So to capture onshore revenue

We dont need to be good at everything, but only in one while remaining offshore, he
sees alliances as the main
or two specific areas which clients will come to us for. avenue. The bank can charge for
sharing specialist knowledge
and training with institutions
which are building their private
banking offering. In return, it
hopes to be introduced to clients
DELIVERING VALUE management approach. We think this who wish to bank in Singapore.
Going against the trend of standardi- is something we can continue to excel
sation, Bordier says he wants to in as long as we play to our boutique
provide a more tailored set of solu- strengths, says Bordier.
tions and services.
In his mind, this needs to go beyond In finding the right model, as every bank
We want to be known in the market as simply talking about protecting, preserv- tries to pool its qualities, Bordier has
the best boutique bank, but with an of- ing and passing wealth on to the next opted for the relationship-based ap-
fering which is genuinely different, he generation. Clients hear this from every proach, not a performance one. We are
adds. We dont need to be good at ev- private bank, and nobody stands out. taking the right decision in moving this
erything, but only in one or two specific way, and charging a fee for that.
areas which clients will come to us for. As a result, he says clients often get
badly serviced, regardless of which bank Likewise, the firm looks for clients who
However, this must involve more than they have an account with. fit its business model and philosophy.
just marketing talk, and in its place be
genuinely transformative in terms of By contrast, Bordier is proud that the Those who are willing to pay a premium
the banks approach to how it adds value bank has retained what it calls its human for proficient private banking are aware
to its clients. dimension. This starts by having a frank of what our advisory fee entails, says
and more realistic conversation with a Bordier. Our ideal client values the work
Our relatively small size also means we client about why they even want a bank we do for them and is willing to pay what
are able to cater to clients specific needs account in the first place. we are worth for doing it.

62 WEALTH MANAGEMENT IN ASIA 2016

FIRM PROFILE

Bank Vontobel eyes Asia with

offering of global access
Bank Vontobel is bullish on private banking in Asia despite the intense competition in
the region which has compressed margins. Georg Schubiger says the firms boutique
strategy allows a unique offering to HNW clients.

Being focused and targeted is a good decision to basically operate as a wealth

thing in the Asian private banking in- adviser to clients in the region, and book
dustry today. their assets in Switzerland.

In an increasingly-tough environment Such a narrow focus, it is becoming more

to even try to be all-things-to-all-peo- and more relevant due to a combination
ple, downsizing, mergers, acquisitions of market developments, as well as what
and exits have started to happen more the bank believes entrepreneurs and
and more frequently. wealthy families are increasingly looking
for, explains Schubiger.
But there is always scope for banks to
develop businesses where they offer GROWTH AMBITION
clients something they really need. As of 30 June 2016, Vontobel as a group
grew its net profit by 8% to CHF105.7
For Bank Vontobel, it is clear that the million based on strong growth in new
firm looks for differentiation rather than money of 7%, enabling advised client
scale. We have a boutique strategy assets to reach a new level of CHF179.3 GEORG SCHUBIGER
that focuses on clients who want to billion (USD151.8 billion). Bank Vontobel

diversify part of their assets internation-

ally across jurisdictions, asset classes More specifically, in its wealth manage-
and currencies, says Georg Schubiger, ment division, it was able to increase its
member of the group executive board advised client assets to a new record
and head of private banking globally. level of CHF43.3 billion. This was due However, investments in the recruit-
to organic growth and the acquisition of ment of additional client advisers, the
With a very lean set-up in Asia to offer Finter Bank thus achieving above- number of whom increased by 18% over
these services, the firm has taken the average growth compared with its peers. the last 12 months had an impact on

64 WEALTH MANAGEMENT IN ASIA 2016

FIRM PROFILE

the overall positive result. At CHF34.2 form, where structured products of

million, pre-tax profit in wealth manage- various providers are traded; these are
Asian footprint expanding
ment was higher than it was in the also offered to private clients.
previous year. While many Swiss private banks
In terms of asset management, mean- run their Asian operations from
Yet the strong growth in the wealth and while, some of Vontobels equity funds Singapore, Bank Vontobel has
asset management businesses over the chosen Hong Kong in which
have posted above-average perfor-
to base its roughly 20-strong
last year resulted in significantly higher net mance in recent years under US fund
private banking unit.
fee and commission income, representing manager Rajiv Jain.
66% of Vontobels operating income. In early 2016, the firm boosted
The bank can also offer a globally-di- its firepower on the relationship
In Asia, plans are afoot to increase the versified, tailor-made portfolio to clients management side, selectively
impact of the region to the banks bringing in individuals with
with USD3 million in AUM and up.
the experience required to
implement Schubigers strategy.
For example, it hired Christine
Chen and Joannes Ho in March
and April respectively, both
from CTBC Bank, as senior
Our ideal RM is somebody who understands the relationship managers in
investment world from a global diversified standpoint. newly-created roles.

As of June 2016, a new team

of experienced private banking
advisers has been in place in
Zurich, hired specifically to cater
to wealthy clients who
bottom-line. For example, it has a In line with this, Schubiger says Bank are domiciled in Australia.
publicly-stated aim to place a focus on Vontobel is more focused on bringing
emerging markets in Asia Pacific, to on board advisers and wealth managers
strive to at least double its current busi- who understand the clients they serve.
ness volume in the region by 2020. Our ideal relationship manager (RM) is
somebody who understands the invest- vices and products from Switzerland to
In line with this vision, the target for ment world from a global diversified Vontobels focus markets world-wide.
AUM in Asia (in wealth management) standpoint, he explains. He or she
is to grow it by at least double over the needs to have a broader view on the one Also, in late 2015, it launched a secure
course of the next four years. Key to hand, but also understand how entre- mobile private banking app. This pro-
this for Bank Vontobel is emphasising preneurs think. This enables them to get vides HNW clients in China and Hong
its boutique strategy, which seeks to a tailor-made service that takes into Kong with around-the-clock access to
avoid having cost-intensive local consideration the entrepreneurs needs their portfolio and wealth management
booking centres. in wealth planning and preservation. services using smartphone and tablet
devices. Plus, it enables them to trade
RELEVANT SOLUTIONS DIGITAL DIMENSION and speak live to their RM through
As this family-owned firm continues to Using technology to reach across borders encrypted instant messaging.
try to distinguish its solutions for HNW easier and quicker is a further important
clients, it puts value in being able to component of Schubigers strategy. While Schubiger acknowledges the
benefit from its investment banking and importance of Bank Vontobel being at
asset management arms. Although the bank doesnt believe that the forefront of the digital revolution,
a digital interface can replace the face- however, it must also distinguish what
In the case of investment banking, an to-face interaction with an RM, technol- will translate into an industry standard,
important focus is the Deritrade plat- ogy has allowed it to export its ser- and what will fall by the wayside.

66 WEALTH MANAGEMENT IN ASIA 2016

 BRITISH AND MALAYAN TRUSTEES LIMITED

Fiduciary Services for Families &

Financial Institutions since 1924

1 Coleman Street, #08-01, The Adelphi, Singapore 179803

Tel: 6535 4922 Fax: 6535 1258 www.bmtrust.com
EVENT HIGHLIGHTS - ASIAN WEALTH MANAGEMENT FORUM 2016 - SINGAPORE - MAY

Mapping out the future for

Asian wealth management
Our 7th annual event in Singapore for the regional wealth management industry brought
together 400 senior individuals from across the community to discuss and debate the
risks and opportunities ahead.

Despite Asias well-documented growth example, over the last 24 months, the
in wealth, the time has come for a reality focus was on trying to find solutions to
Thank you to our sponsors
check. Only a small number of private the lack of differentiation in strategies
banks are profitable and the industry is and value propositions of many organ- Allocated Bullion Solutions
increasingly polarising; with the larger, isations vying for market share. Further, BNY Mellon
universal institutions on the one hand, with insurance companies making a FactSet
Infosys Finacle
and more focused boutique advisory foray into wealth management in Asia,
Intellect Design Arena
firms at the other, making more the landscape is changing quickly.
Leonteq Securities
headway. A look at where the net new Charles River
money went over the previous 12 to 18 Going forward, individual players agreed EY
months has been clear evidence of this. on the urgency to drive needs-based Henley & Partners
conversations with the right clients, Morningstar
Numerix
Discussions focused on how to address backed up by real advice and relevant,
Old Mutual Global Investors
industry shortcomings, such as business contextual information.
Vermilion Software
models overly-reliant on transactional Aetna International
revenue, continued challenges in raising Local institutions onshore also need to ASK Group
competency and productivity, onerous seize their opportunity to position their Aviva Investors
compliance obligations, and limited real wealth management offerings as more AXA
Domacom
innovation or automation. strategic within the wider group. This
Enhanced Investment Products
is timely, as many foreign firms struggle
Friends Provident International
In the face of the growing pace of con- with the demands of transparency and Fundinfo
solidation in Asian private banking, for tax-related initiatives. Global Prime Partners
Heritage Trust Group
Investec Asset Management
J O Hambro
Orbium
Pershing
Quantifeed
Rosemont
SEI
Swiss Life
Swiss Asia
Synpulse
Thomson Reuters
Tikehau

68 WEALTH MANAGEMENT IN ASIA 2016

Abhra Roy Adriel Loh R.N. Nagaraj Prasadh Amar Bisht Anurag Mahesh
Infosys Finacle Bank of Singapore Intellect Design Arena Orbium Deutsche Bank

Arthur Wu Bassam Salem Bruno de Pampelonne Evrard Bordier Febby Avianto

Morningstar Citi Private Bank Tikehau Investment Management Bordier & Cie Falcon Private Bank

Oliver Lee Gary Harvey Jeroen Buwalda Greg King Frank Troise
Old Mutual Global Investors Nexus Financial Services EY FactSet Leonteq Securities

Toby Simpson Philip Lung Veronique Fournier Jason Moo John Cappetta
Friends Provident International BNY Mellon Investment Management Baring Asset Management Goldman Sachs Bank Julius Baer

Kevin Talbot Koh Hoe Shin Lim Say Boon Mark Wightman Markus Blattmann
Aviva Investors Manulife Financial Advisers DBS Bank EY Bank Julius Baer

WEALTH MANAGEMENT IN ASIA 2016 69

Max Tiong Ned Phillips Nicholas Kourteff Owen Young Patrick Donaldson
DBS Bank Bambu UBS Wealth Management Standard Chartered Bank Thomson Reuters

Paul Gambles Paul Hodes Philipp Portmann Ranjiv Raman Rodolphe Larque
MBMG Group Citibank fundinfo Cazenove Capital Management Credit Suisse

Smita Choudhary Stefan Kuhn Steve Knabl Erdem Ozgul Alexis Tan
Bank of Singapore Credit Suisse Private Banking Swiss Asia Numerix Henley & Partners Singapore

David Varley Derek Goldberg Dominic Volek Seamus Donoghue Hans Diederen
AXA Aetna Henley & Partners Allocated Bullion Solutions Heritage Trust Group

Jaideep Billa John Robson Marcel Kreis Mark Smallwood Matthew Dabbs
Intellect Global Consumer Banking Quantifeed Hubbis Deutsche Bank Wealth Management AAM Advisory

70 WEALTH MANAGEMENT IN ASIA 2016

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EXPERT INSIGHTS

A need to be niche

To survive one of the most challenging periods private banking has ever faced, a more
focused and defined proposition is essential, says Brian Shegar of Emirates NBD.

A common concern among senior ex- FACING UP TO CHANGE

ecutives in wealth management is the Pressure is coming from multiple
gloomy outlook for the industry in Asia. sources. Clients, too, have become more
and more demanding. They expect finer
They see it as one populated by increas- pricing and lower transaction costs,
ing challenges from the many regula- says Shegar. These challenges are not
tory obligations and compliance expec- to be under-estimated.
tations, in turn requiring significant
investments in people and systems. Plus, a few clients have been able to
With rising overheads from these and successfully sue their private banks, so
efforts to tackle other business risks, this places yet more emphasis for senior
private banks need to rapidly find a way management on risk management and
to weather the storm. operational efficiency.

According to Brian Shegar, head of Asia In terms of the competitive environ-

Pacific for Emirates NBD, the right ment, Shegar is also wary of what he
proposition for many institutions calls the irreversible trend of fintechs. BRIAN SHEGAR
without existing scale or size in this Some institutions are trying to meet Emirates NBD

space is to focus on what they can do this challenge through collaboration and
best for their clients. acquisition of fintechs. The banks which
are slow to adapt to this phenomena
A niche strategy works best, he ex- could be bypassed in due course.
plains. Private banks shouldnt try to the private wealth management space
do everything, or cover all markets. Despite the need that will always exist also suffering a certain amount of dis-
They need to focus on their compara- for bespoke, tailor-made private banking intermediation especially given the
tive advantage. services, he foresees the potential for threats that the banking industry is

72 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

facing from robo-advisers and other and commitment to continue to build This is an evolution of Emirates NBDs
digital advice platforms. out their wealth management offerings. vision from the time of the opening of
its Singapore branch in late 2010. As
SUSTAINABILITY IN QUESTION A CLEAR STRATEGY part of its strategy to play a pivotal role
Change is clearly underway within the From Shegars perspective, this all works in facilitating and catalysing trade and
private banking industry in Asia. to the benefits of an institutions like investment flows between Singapore
Emirates NBD. and the Middle East, the bank aims to be
Many banks have rationalised their busi- a gateway for providing private banking
nesses, either down-sizing in some loca- We have a differentiated strategy in services to Middle Eastern HNWIs
tions, or pulling out of certain markets Asia, which gives us a niche so that we seeking to invest in Asia, and conversely
altogether, or even selling their busi- dont have to compete with other for Asian investors seeking investment
nesses entirely. private banks, he explains. opportunities in the Middle East.

It was inevitable that a shake-up in this More specifically, the bank services the The Singapore branch also leverages
industry would happen sooner rather growing pool of money that gets in- on the banks niche competence in
than later, says Shegar. vested offshore from the GCC. Shariah-compliant private banking and
asset management.
The cost-income dynamics have While this has traditionally gone to
become unattractive for many banks Switzerland, or London, particularly for ADAPTING THE ADVICE
not just their fixed costs, but also the real estate investments, the bank is The challenge of making money in
impact of getting caught out by making increasingly seeing Singapore become todays environment requires banks to
mistakes, he explains. positioned as an attractive offshore focus on how they can better harvest
their clients to deepen and broaden
these relationships. For example, Asian
families are looking to further diversify,
protect and grow their wealth.
The cost-income dynamics have become
unattractive for many banks not just But with all jurisdictions under scrutiny,
some of the structures used in the past
their fixed costs, but also the impact of
are no longer viable. Plus, the potential
getting caught out by making mistakes.
universe of clients in Asia is more limited
than before; any individuals which banks
now deem as questionable in terms of
source of wealth are untouchable.

As a result, to do well, he says manage- investment centre for GCC clients. This There is a lot of Chinese wealth, but
ment must have a granular focus on is underpinned by Singapores world- the challenge would be meeting the
costs and revenues. class infrastructure and capabilities for compliance requirements banks face
execution and advice across all asset today in the onboarding process and
But the exit of some of the best-known classes under the well-respected super- managing this money, says Shegar.
brands from private banking in Asia in visory regime of the MAS.
the last few years, has raised questions In general, wealthy Asian families also
about how any of the smaller players The banks relationship managers in need to understand the rising demands
can make it work. Dubai also play an important role, he of global regulators and the impact of
adds. They try to help clients learn about current and prospective regulatory
In Shegars view, this plays to the opportunities to service offshore reporting requirements such as FATCA,
strengths of regional banks with the size wealth, but still keeping it with the bank. CRS, etc, he adds.

74 WEALTH MANAGEMENT IN ASIA 2016

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FIRM PROFILE

Steady growth with an eye to

the millennials
Vincent Chui of Morgan Stanley sees the challenges facing private banking as an
opportunity to selectively acquire talent and grow the platform to give it the right scale
and positioning especially with the next crop of Asians wealthy in mind.

Perhaps one of the more prudent ways ably likely to pay off given that cyclical
to approach the current private headwinds will stay strong for a while,
banking environment is to view 2016 adds Chui.
as a transitional year for industry
players to develop a rational view about At the same time, it is hard to deny the
sizing and aspirations. importance of scale. But it needs to
come via growth in the right way. Just
Being realistic is certainly a take-away bringing in additional clients isnt neces-
for Vincent Chui, managing director and sarily going to be most effective, cer-
head of Asia institutional equity distri- tainly in comparison with additional
bution and private wealth management revenue. You can sign up as many
at Morgan Stanley. clients as you want, but ultimately in
this environment, most of them will
Private banking, notwithstanding its probably be cautious, explains Chui.
secular growth, has been affected by
the very challenging investment and Where there is a big opportunity and
low/negative interest rate environ- one of the drivers for him to position- VINCENT CHUI
ment, he says. ing the private wealth proposition in Morgan Stanley

this direction is to put in place the

It impacts both the flow and fees busi- people, processes and infrastructure
ness, hence it is unrealistic for banks to to attract and service the regions
manage their business using 2015 rev- wealthiest millennials.
enues as a baseline. manager. In Asia, its wealth manage-
TRADITIONAL STRENGTHS ment business adopts a very differenti-
Whereas a few banks continue to seek With AUM of around USD2 trillion, ated approach, leveraging on its synergy
to add headcount, patience is prob- Morgan Stanley is the biggest US wealth with the firms top-ranked institutional

76 WEALTH MANAGEMENT IN ASIA 2016

FIRM PROFILE

securities and investment banking fran- investors. And he knows that wooing This is a challenge for the industry as a
chise and connectivity. these individuals requires the firm to whole, not just for Morgan Stanley.
adapt its approach.
Private clients benefit from that sig- The key thing, however, is to make a start
nificantly in terms of investment ideas, More specifically, this involves bringing along this path by investing in and sup-
research and products, he adds. on board relationship managers (RMs) porting younger RMs.
who are more aligned in their thinking.
On the flipside, the bank has deliber- Chui believes that the bank has an im-
ately chosen not to be aggressive in Plus, they need to talk to these clients portant advantage in the current set-up
terms of lending on a stand-alone basis. about a wider set of solutions to meet in which he operates: with a crop of
Saying that, it does use lending as a tool a broader variety of needs and goals. high-quality and well-experienced RMs
to try to help its clients achieve their who, on average, have 10 years-plus at
goals in terms of hedging or investment, The reality is, this next generation of Morgan Stanley.
as part of a more holistic approach. potential clients is not going to spend
all their time thinking about invest- This is in line with the strategy that he
As with its peers, the bank has found the ments, explains Chui. and his fellow senior management have
investment conversation with clients to on productivity.
be a more challenging one over the past Instead, they are much more likely to
12 months, and especially in 2016. seek investment opportunity in a tech Our model focuses on delivering top
start-up, conscious of their investments quartile revenue per head, hence the
The risk-reward is different this year environmental impact, and having more importance of bringing in and retaining
versus the last two years, so any product
that gives you low volatility and reason-
able risk-adjusted returns is worth
looking at, explains Chui.

As a result, cross-asset product which Our model focuses on delivering top-quartile revenue
generates a reasonable yield, such as
per head, hence the importance of bringing in and
4% to 5%, is in demand, as long as there
retaining experienced RMs and product talent.
is a demonstrable track record and
limited drawdown. Cash-equivalent
products like money market funds and
certificates of deposit are also highly-
sought after.

This is where it is essential to take a longer work-life balance. And the mechanisms experienced RMs and product talent,
term view, he adds. These types of prod- for delivering advice are different too. he explains.
ucts are not very profitable for either the
asset management company or distribu- A younger generation of RMs is there- Whereas Morgan Stanleys Asia wealth
tor, but to me its part of the service, and fore required to meet these needs, start- business is estimated to be managing as
at a time when clients need advisers to ing with advisers developing the right much as USD60 billion, it is notable that
help them take care of the problem of connectivity and better understand ing its team of a hundred RMs is small
having too much cash. of how these clients think. among banks with similar AUM.

AN EYE ON WHATS NEXT Then, when this new generation takes This is a crowded industry but if we
Where Chui does believe the bank can over or starts to share responsibility segment appropriately and execute well
also make a mark, is in advising the next with the first generation, we are already with the right talent, it is a very good
generation of Asias HNW and UHNW speaking their language, adds Chui. business, adds Chui.

78 WEALTH MANAGEMENT IN ASIA 2016

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FIRM PROFILE

Investec strives to set new

advisory tone in Hong Kong
A focus on service-led, discretionary investment portfolios for a targeted group of clients
should enable Investec Wealth & Investment to articulate why and how it has something of
value to offer. This is the strategy Catherine Kirchmann is spearheading.

As the new kid on the block in Asian More specifically, says Kirchmann, divi-
private wealth management, Investec sional director and responsible for In-
Wealth & Investment has a clear strat- vestecs Wealth & Investment business
egy that it believes will enable it to in Hong Kong, the goal is to offer
weather one of the most challenging bespoke investment management ser-
landscapes in recent memory. vices to affluent Chinese and expatriates
in Hong Kong.
In addition to volatile financial markets,
a number of players in the industry are She is well-placed with her background
also exiting this space, given the various to oversee this. For instance, her exper-
pressures from regulation, margin com- tise lies in providing discretionary and
pression and competition. advisory investment services to profes-
sional investors, including HNW indi-
Yet the Investec Group didnt rush its viduals, charities, trusts, companies and
decision to open its new business in Asia. clients of financial advisers. The focus
is very much on service rather than
As an organisation, it tends to leverage product. We dont believe in putting CATHERINE KIRCHMANN
where it has existing infrastructure, so clients in pre-determined boxes or pro- Investec Wealth & Investment

had comfort from its asset management moting off the shelf solutions.
presence in the region dating back to
the late 1990s. SETTING THE TONE
Many of the firms clients in the UK and
Plus, Catherine Kirchmann says the firm Europe, as well as in South Africa, who Now it needs to be transferred to Asia
has a very focused strategy in line with are in some cases loyal for over 20 something Kirchmann is confident
the wider Investec Groups plans to years, will testify to the firms client- about. With our strong track record,
expand the division internationally. centric approach. tailored and flexible approach to manag-

80 WEALTH MANAGEMENT IN ASIA 2016

FIRM PROFILE

ing portfolios, and the access our clients and they want to speak to individuals
have to experienced and skilled invest- who can have an in-depth conversation
Dedicated investment
ment managers, we are well-suited to about markets, asset allocation and process
the unique needs of the Chinese and portfolio construction.
expatriate markets in Hong Kong. To support its value proposition,
So while there will still be a large number Investec has invested heavily
in a dedicated central research
In particular, the people clients speak of wealthy individuals who will opt for
function for its Wealth &
to are the investment managers, so can an advisory model, she sees there being
Investment business.
give much more specific information a growing opportunity for the discre-
about the portfolio. This also avoids the tionary approach. This consists of an experienced
all-too-common disconnect in some team of analysts covering a
other firms which happens between the MEASURED GROWTH wide range of equities, fixed
income and collective investment
client and investment team sitting in the For the time being, the focus for Kirch-
opportunities.
background without really understand- mann is Hong Kong, although she says
ing the clients investment objectives that she wouldnt rule out expanding The research team is fully
and needs. into other markets in Asia further down independent of the wider
the track. Investec Group, but benefits
The evolving demographics in Hong from a collaboration of thoughts
and processes.
Kong also offer Investec reason for op- We have only just begun here, she says.
timism. Not only are there growing af- We got the go-ahead from the SFC in
The process it follows is a
fluent and HNW populations, but they November 2015, but we officially disciplined and consistent
are also getting younger. launched the business in April 2016. We one, with the sole purpose
have started to gain some good momen- of supporting the divisions
As wealth passes down from first to tum, taking on a number of new clients. investment managers in
three core areas: asset
second generation, and from second to
allocation, equity strategy
third generation, people take longer- One of the inevitable challenges she
and collective funds
term views in terms of wealth manage- shares with her peers is finding the right
ment, says Kirchmann. people to join the team a potential At this point in time, the Hong
stunt to growth. Kong division offers international
Meanwhile, the firm is also bringing a and diversified portfolios.
less-trodden fee structure to Asia. But the shortage is a slightly more dif-
When it comes to developed
ficult one to fill in Investecs case.
markets, Investec Wealth &
It charges clients an all-in management Investment provides single-line
fee. This is important in a market where We are not just relationship managers, stocks and bonds, whereas in
people are so focused on commission explains Kirchmann. developing markets, it uses
and brokerage, adds Kirchmann. But mutual funds, but within an
open architecture platform.
we believe that fees should be as trans- We look for people who have got the
parent as possible. depth of experience in investment
We are best-of-breed rather
markets, she adds, because what does than best-of-brand, explains
Ultimately, she predicts investors in Asia differentiate us from many of our com- Kirchmann.
will become more demanding when it petitors nowadays is the fact that the
comes to the quality of advice. person you are speaking to is the person
managing your portfolio, not just
When people are focusing on what handing it back to a team or putting it
they are paying in fees, they want to in a model portfolio. a positive development in her eyes. We
get something for their money, she see an opportunity in this because
explains, to the extent that they want In fact, the outflow of some private there are some very good people in
their investments properly managed wealth management firms from Asia is these organisations.

82 WEALTH MANAGEMENT IN ASIA 2016

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EVENT HIGHLIGHTS - WEALTH THINK 2016 - JUNE

Rethinking business models in

Asian wealth management
Speaking at Wealth THINK 2016 in Hong Kong, leading practitioners within Asian
wealth management explored some of the key themes shaping the look-and-feel for the
industry going forward as organisations rethink business models and re-define their
value propositions.

In a tough year for the wealth manage- need to be able to deal with the cost
ment industry, chief executives and and regulatory pressures they face.
Thank you to our
other banking leaders are reconsidering exclusive sponsor
their business models, along with the Yet there is competition also coming
strategic choices they need to make, to from different segments and types of Thomson Reuters
remain relevant in Asia. organisations within the wealth man-
agement industry.
At the same time, they are looking at
how they can take advantage of the In terms of China, many practitioners time on more administrative tasks, or
opportunities relating to China, includ- believe that this market will be the doing research.
ing the offshoring and onshoring of driver for the industry over the coming
Chinese wealth. decade, yet it is also a slowly-develop- This wont change the fact of challeng-
ing one. ing market conditions, but it can help
In line with this, we designed and to make these individuals more produc-
hosted our first Hong Kong-based A lot of conversations at the moment tive in the meantime.
summit, in June 2016, for leaders from among industry leaders revolve around
Asia and globally. efficiency and enabling relationship Meanwhile, the desire to develop more
managers (RMs) to do more. needs-based solutions for clients in Asia
For private banks, in particular, they is a process which will take time
need to determine how to build a sus- This involves digital capabilities in order perhaps another five to 10 years ac-
tainable platform for the future. In ad- to help them to generate revenue op- cording to some estimates.
dition to having to increase scale, they portunities rather than spending their
In practice, in the current environment,
advisers need to focus on clients exist-
ing portfolios, rather than continue to
try to engage clients with new ideas. In
line with this, the banks must also adapt
their incentive structures, to think
longer term.

That will finally drive the change in

thinking needed to lead to a new busi-
ness model for wealth management
in Asia.

84 WEALTH MANAGEMENT IN ASIA 2016

Alan Armitage Alan Luk Alvin Ma Bassam Salem Bobby Bok
Standard Life (Asia) Limited Hang Seng Bank EFG Bank Citi Private Bank Thomson Reuters

Eddy Wong Eleanor Wan Piers Brunner Robert Rooks Howard Bilton
J.P. Morgan Asset Management BEA Union Investment Knight Frank Deloitte The Sovereign Group

Peter McMillan Janet Chong Jonathan Ha Joseph Tam Jung Ho Rhee

Thomson Reuters DBS Bank Red Pulse Wing Lung Bank Mirae Asset Global Investments (HK)

Ken Tam Kevin Lee Martin Crawford Michael Blake Michael Olesnicky
RBC Global Asset Management Zhong Lun Law Firm Vistra Group Union Bancaire Privee KPMG

Neil Harvey Nigel Rivers Roger Steel Ron Lee Rosita Lee
Credit Suisse Capital Solutions Sun Life Financial Goldman Sachs Hang Seng Bank

WEALTH MANAGEMENT IN ASIA 2016 85

 Stewart Aldcroft TF Cheng Thomas Young Thusitha de Silva Timothy Lo
Citi BNP Paribas Investment Partners Generali Cerulli Associates CIC Investor Services

Xiaofeng Zhong Alexandre Viale Henry Fu Peter McMillan Philippe Legrand

Amundi EY Thomson Reuters Thomson Reuters London and Capital Asia

86 WEALTH MANAGEMENT IN ASIA 2016

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Operational efficiency
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WEALTH MANAGEMENT IN ASIA 2016 87
CO-PUBLISHED ARTICLE

Regulatory change management for

investment suitability and beyond
It may come as no surprise that in spite of turbulent financial markets, most global and
local private banks in Asia are continuing to invest heavily in their operations in order
to keep pace with the agility needed to service the growing market of Asian multi-
millionaires. By Prasanna Venkatesan of Synpulse.

As digitally-savvy and wealthy custom- these suitability requirements. However,

ers look out for more sophisticated these solutions have resulted in added
engagement via online channels, banks administrative overheads to their rela-
also strive to find smarter ways to on- tionship managers (RMs)and created
board these new channels and scale complex control structures that are
them across markets while being com- heavily-scrutinised during regulatory
pliant. Although banks show the willing- reviews.
ness to embrace such changes, they are
limited by their internal inefficiencies TACKLING INVESTMENT
and less-than-agile IT infrastructure. SUITABILITY CHALLENGES
Implementing a suitability framework
Of the many regulatory topics that in a pragmatic way requires deep un-
continue to challenge banks, invest- derstanding of the private banking in-
ment suitability has been one of the dustry in terms of regulatory require-
key topics that most banks struggle to ments, clients, investment products and
handle effectively. risk management.
PRASANNA VENKATESAN
Although practices for careful advice There are three key steps to implement- Synpulse

were known in the market for years, ing a robust suitability framework:
regulators in Hong Kong and Singapore
started issuing many clear directives on Formulate a pragmatic portfolio
suitability standards after the financial approach to ensure that clients
crisis in 2008. investments are assessed at port- Implement pre-trade checks in the
folio level instead of a transaction order management system in a way
In the last few years, many banks have level, making it more meaningful that the RMs only need to focus on
resorted to tactical solutions to address in a private banking set-up failed suitability checks and follow

88 WEALTH MANAGEMENT IN ASIA 2016

Source: MAS and HKMA Suitability Requirements on a timeline

the clear recommended actions change management process and IT In spite of these large investments, most
presented via a unified dashboard infrastructure present. of the private banking businesses even
today face formidable challenges based
Devise a periodic portfolio moni- This takes us towards concept of digi- on two aspects.
toring mechanism to ensure that talisation and organisation agility where
the clients portfolios are moni- the industry needs to identify efficient First, there are still a lot of administra-
tored to detect unusual portfolio ways of conducting business which tive overheads that the RMs and the
performance, risk mismatch, con- extends towards the space of regula- clients face due to ineffective ways of
centration risks etc in order to tory and compliance topics. implementing regulations that many
address suitability risk in a proac- times ignore the business context of
tive and timely manner THE RULE ENGINE SOLUTION: private banking. This results in frus-
STRATEGIC PERSPECTIVE trated RMs, unhappy clients and poor-
The majority of the large banks in the Traditionally banks have been big part ly-implemented control processes that
region have a good understanding on of their change budget to implement are heavily-scrutinised by regulators.
the principles of a successful suitability the regulatory requirements (especially
framework. However, they seem to be suitability) and the corresponding Secondly, decentralised IT implementa-
constrained with the challenges that IT control processes to ensure compliance. tions spanning across multiple core

Source: Key steps in implementing a robust suitability framework

WEALTH MANAGEMENT IN ASIA 2016 89

CO-PUBLISHED ARTICLE

banking components are too cumber- This significantly brings down the cost Given the rapid increase in clients
some and costly to maintain. This results and time to market for new channel or demand for digital channels that are
in a less agile IT infrastructure that pre- new booking centre integration. accessible across the globe, there comes
vents scalability of regulatory implemen- a strong need to explore strategic ways
tations across geographies or channels. The central maintenance of rules of implementing regulations across dif-
become paramount as regulators across ferent jurisdictions.
A central rule engine to develop and different jurisdictions are coming in with
maintain the rules will not only allow aligned practices. Even in cases of BCBS Banks that head down this path will
ease of maintenance and future scal- 239 and CRS (FATCA/AEI) require- definitely have an edge over the others
ability but also enable central control ments, the rule engine allows central in gaining strategic market advantage.
and management of regulatory rules pooling of data and managing output The advantage and agility is even more
and internal controls. in a bespoke way. A regulatory change needed for the mid-sized private banks
needs to be implemented only in one in order to be able increase their effi-
As such, the rule engine is designed only place and standard practices are avail- ciency of conducting business by adopt-
to maintain the business logic relevant able across different channels and ing digitalisation in relevant regulatory
to regulatory checks and envelopes booking centres. and compliance topics.
around the existing core banking
systems. This architecture facilitates There are already established technology With our many years of experiences in
aggregation of relevant client, product products in the market that allow such shaping the topics on regulatory and
and portfolio information before the change agility that the banks could lever- compliance, Synpulse has developed
business logic can be executed. age. One of the products even offers and showcased specialised skills in this
visually-customisable capabilities where area. Backed by both business and tech-
Such an implementation would enable a business user can directly adapt many nology solution expertise, Synpulse is
other digital channels and different configurations (for example, product well-positioned to offer its support to
booking centres to connect to the rule scope) and simple business logic which clients in streamlining their regulatory
engine and start leveraging the cen- makes the change even more efficient implementations in an effective and
trally developed regulatory rules. and controllable directly by business. meaningful way.

Source: Central rule engine that facilitates ease of implementation and scalability across channels and booking centres

90 WEALTH MANAGEMENT IN ASIA 2016

 From Prospecting to Onboarding and Servicing

Ensured & automated Risk and Compliance

(KYC, Suitability, FATCA, CRS, MiFID, etc.)

Getting your Digital Bank ready

EXPERT INSIGHTS

How BEA is eyeing China for

wealth management growth
The growth of The Bank of East Asia (BEAs) wealth management business is being
fueled by opportunities in China, says Grace Chow.

Despite the challenging business envi- general manager and head of the banks
ronment in 2015, BEA reported sus- wealth management division.
tained growth in wealth management,
largely as the bank has focused on With branches and sub-branches cov-
growth in China. ering 44 cities on the Mainland, BEAs

We have been trying to refer clients within our

organisation as much as possible. We are now looking
at whether its possible for us to expand our
onshore services via our Mainland subsidiary,
BEA China, to help clients manage their
onshore and offshore funds. GRACE CHOW
Bank of East Asia

An important factor in its success during network is second only to HSBCs

more difficult markets has been the among the foreign banks. This has increasing number of Mainland-based
banks extensive branch network in enabled BEA to generate business for entrepreneurs are conducting their
Mainland China, says Grace Chow, its private banking division since an business abroad.

92 WEALTH MANAGEMENT IN ASIA 2016

CHASING THE CHINA OPPORTUNITY try players, the possibility of a robo- petency in the technical as well as in
Chow says that China remains a key part type RM is not something that Chow the ethical and compliance areas for
of the growth strategy for her division, thinks is relevant for private banking private banking practitioners.
despite the challenges for her industry in this instance.
and the broader market in 2016. But she also believes that practical
Private banking, she explains, is still knowledge is equally important to a
With current market sentiment, clients about a personal relationship and a private banker to serve clients.
are unwilling to take risks and would tailor-made solution for clients, and
rather sacrifice yields and returns. In robots may not easily take up the job, The account-opening process is another
addition, clients are not so comfortable at least for some time. example where requirements are more
buying stocks, she explains. stringent than in the past.
INCREASINGLY STRINGENT
We have not seen such risk-averse REGULATIONS For instance, while a private banking
sentiment for quite a number of years, Operating within an increasingly account can be opened as quickly as
she adds. complex regulatory framework, some within one to two weeks, it is quite
private banking practitioners are con- common for the process to take three
Given the lack of trading in todays en- cerned that the stringent regulatory to six months.
vironment, which in the past has played
to the strengths of BEAs wealth man-
agement platform, the bank has been
looking into offering more stable prod-
ucts for a clients longer-term holdings.
While Hong Kongs wealth management
The focus on China, therefore, contin- business has its advantages, it needs to ensure
ues to be strong, with the aim to attract that it stays competitive and facilitates business
assets from wealthy individuals as by being both professional and practical.
Chow believes this is where the bank
has a competitive edge for the foresee-
able future.

We have been trying to refer clients

within our organisation as much as pos- environment can create headwinds for Such evidence reflects the direction of
sible, she says. We are now looking at the industry. the regulatory environment today.
whether its possible for us to expand
our onshore services via our Mainland For example, in Hong Kong, recently- And this means that private banking is
subsidiary, BEA China, to help clients introduced exams as part of the joint now less about sitting across the table
manage their onshore and offshore government and industry-led certifica- to reason out rules, and instead more
funds, she adds. tion scheme to implement the En- about sticking to the letter of the
hanced Competency Framework do various ordinances.
EXPERIENCE COUNTS not factor in the value of an RMs ex-
Developing these types of relationships perience as much as they should, ac- Nowadays, we just have to follow the
will inevitably be done face-to-face, cording to some practitioners. rules, explains Chow.
highlighting the importance of the em-
phasis on relationship managers (RMs) Fresh recruits who study hard seem to While Hong Kongs wealth manage-
with experience. be performing much better than those ment business has its advantages, it
who have been in the industry for 10 needs to ensure that it stays competi-
Although digitalisation and automa- or 15 years. Chow agrees with the ob- tive and facilitates business by being
tion are in the works of all the indus- jectives of an enhanced level of com- both professional and practical.

WEALTH MANAGEMENT IN ASIA 2016 93

EVENT HIGHLIGHTS - MIDDLE EAST WEALTH MANAGEMENT FORUM 2016 - FEBRUARY

Enhancing capability, capacity

and pipeline in the Middle East
Our inaugural event for the local wealth management industry in the Middle East,
hosted in Dubai in January 2016, highlighted key ways that the industry needs to
develop to move to the next level.

There is little doubt about the poten- from people capable and competent
tial for wealth management and to do so. This will also help to remove
Thank you to our sponsors
private banking in the Middle East. confusion between what is retail/af-
Statistics from various industry reports fluent banking versus private banking, Emirates NBD
highlight growth especially the fact said speakers. Allocated Bullion Solutions
that a large proportion is from newly- Amicorp Group
Comarch
created wealth. From diversification to wealth struc-
FinIQ
turing to client education to higher
Jersey Finance
At the same time, Islamic finance has standards of professionalism, there- Miles Software
proven its resilience against economic fore, organisations need to position Principal Global Investors
headwinds is on a constant growth path. their businesses in line with the op- Profile Software
Dubai, in particular, is also well-posi- portunities that exist, and define clear Old Mutual International
Thomson Reuters
tioned to tap frontier markets around value propositions. This also includes
the region. reducing the dependence on oil and its
price fluctuations, which has an impact
Yet practitioners at the event high- on the fiscal situation of the various
lighted that there is still a lot to do to GCC countries. remains a challenge. And ensuring the
develop the regions and wealth man- right types of clients are on-boarded is
agement industry. At a business level, finding the right key to maintaining a compliant and
model that is suited to the most lucra- viable proposition.
At a client service level, a big focus tive client segments not just today,
must be delivering the right advice but more importantly tomorrow Further, there is a lot more to be done
within local financial institutions to
position their wealth management of-
ferings as more strategic within the
wider group. This includes investing
sufficiently in the technology, platforms
and overall infrastructure.

At a regional level, meanwhile, there is

a need for regulators to be more joined
up, to provide clarity on cross-border
practices/activities and remove reliance
on tolerated practices.

94 WEALTH MANAGEMENT IN ASIA 2016

Ahmad Chahidi Akash Anand Alastair Glover Andrew Mortimer Andrew Prince
Emirates NBD Private Banking Profile Software Wragge Lawrence Graham & Co Barclays Acuma

Anthony Jaganathan Brendan Dolan Damian Hitchen David Marshall Deepak Ahuja
Emirates NBD Old Mutual International Swissquote Bank Emirates NBD RAKBANK

Deepak Mehra Dr Haroun Dharsey Fadi Al Said Fiona McClafferty Gary Dugan
Commercial Bank of Dubai Dubai Islamic Bank Lazard Asset Management Deloitte Emirates NBD

Gary Hales Gary Tiernan George Triplow Gifford Nakajima Hans Goetti
Jersey Finance Ernst & Young HSBC Banque Internationale A Luxembourg

Karima Abdesslami Karine Kheirallah Kees Stoute Lina Taher Georg Hartmann
National Bank of Abu Dhabi Falcon Private Bank Hubbis Friends Provident International Liechtensteinische Landesbank

WEALTH MANAGEMENT IN ASIA 2016 95

Maya Marissa Malek Mihaela Moldoveanu Milan Ganatra Walter Jopp Peter Golovsky
Amanie Advisors DIFC Wills and Probate Registry Miles Software Solutions Zurich International Life Amicorp Group

Rajesh Khanna Sean Kelleher Subroto Som Tom Anderson Vic Malik
Emirates NBD Mondial Dubai Mashreq Bank Killik Barclays

Yann Mrazek Luke Janssen Mahesh Bulchandani Tim Searle Greg Prosowicz, PhD
M/Advocates of Law Tigerspike FinIQ Globaleye Comarch

There isnt such an event that exists in the

wealth management space in this part of the
world. This is a great initiative.
Nayeem Khan, Chief Operating Officer, Qatar First Bank

Sandeep Lalwani Nayeem Khan

Miles Software Solutions Qatar First Bank

96 WEALTH MANAGEMENT IN ASIA 2016

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FIRM PROFILE

Driving an all-round Indian

proposition for high-end clients
Edelweiss Global Wealth Management has shunned the oft-trodden route in India of pushing
product, trying instead to provide real solutions to targeted groups of HNW and UHNW
individuals. Anshu Kapoor explains the benefits this is bringing to the firm and its clients.

A growing number of wealth manage- CLIENT FOCUS PAYS OFF

ment players in India especially the The firms strategy has been simple: to
foreign private banks are seeing mixed be completely focused on its clients.
results (at best) within their businesses We dont look at it from an output
as the cost, regulatory and competitive perspective; we think much more from
challenges have mounted. an input perspective, explains Kapoor.

But in what is an increasingly polarising Carefully selecting its client segments

industry as a result, Edelweiss believes to target is a key component of the
it is bucking the trend. Edelweiss approach. For example, on
the UHNI side, it exclusively caters to
For example, explains Anshu Kapoor, new-generation and next-generation
the firms head of global wealth man- entrepreneurs, rather than servicing any
agement, 2015 was a good year overall old wealth.
for the firm across both wealth and
asset management. The firm also has a group which caters
to family offices and what it refers to ANSHU KAPOOR
Today, AUM across the two businesses as institutional clients. Within the family Edelweiss

stands at the equivalent of around office client base, it further divides the
USD9 billion, split roughly evenly. market into evolving and evolved.

We have reached critical mass now, An additional business line provides

says Kapoor. I think we are number financing in relation to employee stock lending money against the shares that
three today, by any measure, in the ownership plans (ESOPs), which the staff own (or will own in the future), plus
Indian market for serving both HNI and firm sees as a large and growing cate- hedging the exposure and managing
UHNI clients. gory. This involves a combination of the concentration.

98 WEALTH MANAGEMENT IN ASIA 2016

A lot of other wealth managers only do For example, on the real estate side, the
investment management, explains firm co-partners with clients in dis- Becoming digitally-enabled
Kapoor. Within our client segments, tressed deals, as well as buying inven-
we are focused on their needs, so we tory and underwriting for commercial Acknowledging the importance
have built our value proposition and and pre-leased properties. of digital, Edelweiss has forged a
teams accordingly. partnership with IBM to build a
digital infrastructure.
At the same time, Kapoor says the firm
For instance, in the family office group, is very focused on building up its invest- On the wealth management
clients get serviced by a mix of former ment platform, especially since this is side, this involves some big
traders, investment bankers and insti- not something which can be easily investments, says Kapoor.
tutional salespeople. This creates a replicated. The rationale is, that in ad-
different kind of team, which is able to dition to be able to provide products Salesforce is an example of
whats currently being
deliver the solutions that clients need, via the platform such as structured
implemented in terms of
he adds, whether this is capital, advi- investments, this also gives the firm customer relationship
sory, investment, leverage or tax struc- certain capabilities to service the client. management.
turing and planning.
FINDING THE RIGHT TALENT In addition, to stave off the threat
Perhaps the most tangible example of Despite the opportunities and market from robo-advisors, the firm is in
the process of building a simple
the client focus that Kapoor is keen to potential, one of the drags on growth
online tool which its clients can
highlight is the fact that the firm invites in Indian wealth management continues use to invest.
clients to some its own sales meetings. to be the availability of talent.
There are two clients on our real estate This highlights more broadly the
advisory board, he says. They help us Yet Kapoor says Edelweiss wont com- role that Kapoor sees technology
select real estate projects to be offered promise. We have an internal policy playing as part of the interface
with clients ranging from
to other clients. that we only hire what we consider to
digitising account opening to
be A-raters. transaction processing.
THE RIGHT PACKAGING
A challenge for any wealth management Such an individual needs to pass a series
firm in India stems from the market of tests. This starts with product, then
continuing to be characterised as rela- includes an MBA-like analytical test and
tively short on product, yet long on a psychometric evaluation. Beyond its KEEPING IT LOCAL
product pushing. focus on the quality of intake, the firm Notable about Indias wealth manage-
then trains and grooms these people ment landscape over the past 12 to 18
So standing out requires a different ap- over time. months has been the fact that some of
proach one which is more about the foreign players have been unable
packaging a solution. The reward for those who get through to grow their operations.
the door is an environment of zero
We help our clients to spot opportuni- politics and opportunity for growth. Yet addressing some of the key chal-
ties and trends, and be protected from We give our people the canvas to paint lenges in terms of capacity and capabil-
risks, explains Kapoor. on, says Kapoor. To us it is not impor- ity, and being able to scale the business,
tant what someone has done before; it starts by ensuring that it caters to the
With a vigilant regulator which tries to is what they want to do in life which is needs of the local market.
prevent any kind of over-complication more important.
or complexity in the product offering India is an onshore-only market, very
for investors, Edelweiss approach is to Reflecting the ownership and incenti- much like the US, explains Kapoor. So
agree an asset allocation with a client visation structure of the firm, its em- no player, whether foreign or local, can
and then be smart and nimble in creat- ployees and founders own a combined work on an imported wealth manage-
ing opportunities. 55% of Edelweiss. ment model.

WEALTH MANAGEMENT IN ASIA 2016 99

EXPERT INSIGHTS

The components of a successful

wealth offering in India
Many firms have tried and failed to tap the assets of Indias wealthiest citizens. Karan
Bhagat believes that IIFL Private Wealth Management has devised a successful strategy
based on the right blend of people, product and platforms.

IIFL Private Wealth Management was Private Wealth Management, this is a

borne out of the vision of a group of particularly attractive segment.
senior professionals with significant
private banking experience who, at the In India, fixed income taxation only
height of global financial turmoil in reaches zero after the investor holds it
2008, took a decision to join forces with for three years, so if clients have liquid-
India Infoline Group. ity needs they can draw against the
portfolio. In India, many people invest
Since then, being more focused on ad- their own money but they want a credit
visory than distribution has enabled the line against it, he explains.
firm to develop a sustainable business
model that offers a high level of trans- A WINNING MATRIX
parency and has been able to engender To create the right mind-set and culture,
client loyalty. the firms 90 or so employees now own
33% of the business, which has kept
More recently, IIFL Private Wealth Man- attrition low as staff feel more commit-
agement has been in fundraising mode, ted. That is the people component. KARAN BHAGAT
with the majority of the funds raised IIFL Private Wealth Management

earmarked for reinvestment, particu- In terms of products, there is a need to

larly in non-banking finance. In Febru- be continually innovative while achiev-
ary, for example, it acquired non-bank- ing a standardisation in the offering.
ing finance company (NBFC) Chephis
Capital Markets. Even though most of the business in As for the platform, there are a number
India and Asia is non-discretionary, the of elements without which a firm cannot
For Karan Bhagat, managing director majority of the client portfolios have a survive, he adds. Obviously one is the
and chief executive officer of IIFL similar product profile, explains Bhagat. NBFC aspect of the business for client

100 WEALTH MANAGEMENT IN ASIA 2016

finance, but you also need a very solid have moved the money that it manages
technology platform, as well as a good today from other advisers because he
Digital demands
equity brokerage set-up and research. believes that it would have taken way
too long to do so. There is little doubt that while
With this in mind, Bhagat attributes the digital technology will improve
struggle of many wealth management EVOLVING THE CONCEPT OF ADVICE adviser effectiveness along with
firms in India to the ability of getting the client experience, user-
Bhagat describes the introduction of
led dashboards will change as
the three components of products, advisory guidelines in India as a major
platforms evolve and new ones are
platform and people right. step forward in the development of the developed. In turn, this will make a
countrys wealth management sector. big impact in terms of aggregation
As time goes along it will only become of data.
difficult because investment required This has the power to consolidate, to
in these three facets will only be higher The outlook for robo-advisers,
look at all holdings under one umbrella
meanwhile, is less rosy among
and retention ratios on assets will only and deal with multiple advisers through
HNW clients. Dealing mainly with
be declining. the custodian account as opposed to very simple products and ETFs,
Bhagat says that robo-advisers
have generally performed poorly
compared with actively managed
funds. Over the last 10 years,
active managers have consistently
beaten the index by a big margin.
The advisory model is challenged by the commercial
reality of the business.

Plus, given the way the regulations are,

an advisers ability to earn any kind of
NEW PROSPECTS individual segregated depository ac- commission is effectively zero.
The fact that many older entrepreneurs counts with multiple brokers.
in India have exited businesses has In the interim, Bhagat says flow is more
created a pool of money that remains Such reforms, driven by the Securities important than transaction fee income.
available for investment. We also have and Exchange Board of India (SEBI), We are not worried about earning a
professionals who are selling stock have moved the country much closer specific fee on a transaction, he con-
options and land, the proceeds of which to global regulations in terms of disclo- firms. We are more interested in being
can be collectively described as new sures of fees. able to capture the flow of the transac-
money, says Bhagat. tion for the client. Given all the tax
In line with this, Bhagat suggests the benefits in India for mutual funds, about
IIFL Private Wealth Management has majority of the larger firms are going to 50% of our clients portfolio will always
found it easier to go after this type of struggle to move to advisory mandates be in these products, so we need to be
business. Old money typically went because the fee structure doesnt sharper in this business to get access
with established wealth management support their cost base. He adds that to the remainder of their portfolios.
brands, he explains. Even if you did IIFL Private Wealth Management is
break through, the client would possibly exploring internally whether it could The firms retention rates are healthy,
start with 5% of their portfolio and test potentially make such a move. he concludes. We are possibly a little
you over 12 months to 24 months less expensive in commoditised prod-
before scaling up their portfolio. The advisory model is challenged by ucts and a little more expensive in ex-
the commercial reality of the business, clusive products, but we get the exclu-
So while the firm does business with because typically in India, clients have sive products because we are sharper
established wealthy families, it couldnt been averse to paying fees, he explains. in the commoditised space.

WEALTH MANAGEMENT IN ASIA 2016 101

EVENT HIGHLIGHTS - THAILAND WEALTH MANAGEMENT FORUM 2016 - MAY

Thai potential heralds new dawn

for wealth management offerings
Discussions at our 5th annual event in Bangkok for the local wealth management
industry highlighted renewed belief in the opportunities for the countrys banks, insurers,
asset managers and independent advisers.

The potential for open architecture viduals from the leading private banks,
platforms to evolve and facilitate a more retail banks, investment advisers,
Thank you to our sponsors
holistic wealth management offering is brokers, insurers and asset managers.
gathering momentum in Thailand. BNY Mellon
Ultimately, clients are starting to want Intellect Design Arena
In a declining interest rate environment, more choice. This is coupled with a more Allocated Bullion Solutions
Henderson Global Investors
clients are starting to look at new prod- conducive and supportive regulatory
Henley & Partners
ucts to diversify portfolios. They are environment in the country, offering
Heritage Trust Group
moving from a risk-averse mind-set the traditionally risk-averse investors IRESS
where they focus on savings via depos- greater scope to invest more offshore. Labuan IBFC
its, money market funds and fixed Pafilia
income towards equities, mutual But the logistics to make this happen and Vermilion Software
Allianz Global Investors
funds and some alternatives. More take root will take time. There is still much
ASK Group
broadly, with the growing wealth, the to be done locally to raise advisory capa-
AXA
scope for banks and advisory firms to bilities, the quality of the product offer- BVI House Asia
penetrate more clients with a wider ings and consistency in standards. There Charles River
array of investment products, insurance is also a pressing need to enhance Commerzbank
solutions and other services is more of systems, training and processes. Enhanced Investment
Products
a reality than ever before.
Franklin Templeton
More specifically, although local banks
Investments
These were some take-aways from this continue to have a lot of influence in J O Hambro Capital
event attended by 275 senior indi- terms of distribution, as they move from Management
Morningstar
Rosemont
Swiss Life
Swiss Asia
Iyer Practice Advisers
Thomson Reuters
UTI International

captive to open architecture, they will

need to find innovative ways to develop
more of the capabilities themselves.

102 WEALTH MANAGEMENT IN ASIA 2016

Adisorn Sermchaiwong Charnwut Roongsangmanoon Don Charnsupharindr Evan Gallagher John Robson
CIMB MFC Asset Management Citi ASK Capital Management, Singapore Quantifeed

Kittikun Tanaratpattanakit Kris Chantanotoke Mandeep Nalwa Michael Benz Ned Phillips
Morningstar Thai Life Insurance Taurus Wealth Advisors Bambu

Nont Buranasiri Patrick Donaldson Paul Gambles Praveen Jagwani Ranjit Khanna
Kasikornbank Thomson Reuters MBMG Group UTI International Union Bancaire Privee

Samdarshi Sumit Shanker Iyer Steve Knabl Sukit Jarutchaiwanna Ted Low
Generali Life Assurance Iyer Practice Advisers Swiss Asia Standard Chartered Bank GAO Capital

Theeranat Rujimethapass Thomas Friedberger Trawut Luangsomboon Vira-anong Chiranakhorn Phutrakul Win Phromphaet
Tisco Asset Management Tikehau Investment Management Jitta Citi CFA Institute

WEALTH MANAGEMENT IN ASIA 2016 103

 Win Udomrachtavanich Angelo Venardos David Varley Michael Gagie Philip Lung
One Asset Management Heritage Trust Group AXA Maples and Calder BNY Mellon Investment Management

R.N. Nagaraj Prasadh Scott Moore Sumetha Lewchalermwong Vinay Kumar David MacDonald
Intellect Design Arena Henley & Partners Franklin Templeton Investments Intellect Design Arena Hubbis

Im very impressed with how many industry practitioners are here, especially
individuals who know the business and are willing to share insights without
holding back.
Nont Buranasiri, Private Banking Family Wealth Management Advisory Head, Kasikornbank

104 WEALTH MANAGEMENT IN ASIA 2016

When Flexibility
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essential for banking

EXPERT INSIGHTS

Kasikornbank shows way to

service HNW Thais
When Jirawat Supornpaibul joined Kasikornbank (KBank) in early 2013, his mandate
was clear: build the best onshore private bank in Thailand. Already, he seems to be well
on his way to achieving this.

It is hard to see how KBank could have to Thailands growing number of HNW
grown its private banking business any individuals in a more significant way.
faster than it has to date. Of the USD19 billion within the private
bank, 60% is still in deposits and only
Jirawat Supornpaibuls strategy to scale 40% is under our advice. So we cannot
this division under his leadership began really say yet that all of this is AUM,
simply by inviting the banks privilege he explains.
customers to upgrade their account
status to private banking. The challenge he faces, therefore, is to
find ways to increase the take-up of
Underscoring his initial progress in just funds and other investment services
three years, his business has amassed among the HNW amid an effort to nudge
over 9,000 HNW clients and more than them along the path to a more advisory-
USD19 billion in overall assets. type relationship with the bank.

Added to this achievement is the part- BUILDING BLOCKS

nership it has forged with Lombard Supornpaibuls plan is to build the JIRAWAT SUPORNPAIBUL
Odier in terms of family wealth manage- private banking proposition around Kasikornbank

ment services, to widen its product of- three pillars: quality of advice, quality
fering and add a global perspective for of product, and quality of service.
KBanks Thai client base.
With existing offerings ranging from
Yet Supornpaibul is a realist who knows stock trading to security deposits, he However, he knows he needs to steer
that the job is still far from complete. says the bank is well-placed to cater to clear of servicing the typical short-term
He is now focused on building KBanks most of the financial needs of HNW trading mind-set of local investors.
investment advisory platform to appeal clients in Thailand. Instead, he is exclusively focused on

106 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

helping customers to take a longer-term Every one of my clients has lots of land,
view on their investments. which is why we are expanding our non-
Planning for the future
capital market services, he says.
We are more focused on creating long- There are several emerging
term wealth, he adds. Our wealthiest clients have the chance areas of interest for KBank.
to speak to Goldman Sachs, UBS, These include family office
services, tax planning and
This strategy has an added cost advan- Morgan Stanley, Credit Suisse or others
creating family constitutions.
tage; it allows KBank to have fewer when it comes to capital markets, so we
relationship managers (RMs) in total. cannot compete on offshore products. Private equity will also be
For example, it only has 50 RMs, with important going forward.
each looking after around 200 clients. So KBank is instead tapping on its wide,
local network and knowledge base when In Thailand, for example, this
part of the market is still
The number of clients for each RM it comes to the property market to gain
relatively disorganised, so
might seem high, but since they dont a foot in the door with this client
Supornpaibul wants to start to
do short-term trading [for their clients], segment. We have a broad network of build a network of people who
they do not need to be glued to a monitor people who want to buy and sell, and are looking to put their money
the whole day, explains Supornpaibul. also we are the financiers of many prop- into start-ups.
They can go out and meet clients and erty projects, he explains. As we have
Unlocking more of the potential
work with their portfolio. the expertise, this is an area where we
for private banking in Thailand
can compete.
also calls for changes from the
The approach of streamlining staff regulator. In particular, says
extends to the advisory offering too. For For example, he adds, a lot of these types Supornpaibul, there is a
example, the bank has one financial of clients acquire acres upon acres of growing need to meet the
adviser for every five RMs. land, but after a while it becomes costly requirements of the land-
owning HNW clients.
for them keep those assets without
Here again, Supornpaibul rationalises generating any return from them,
Estate trusts are the big topic
this ratio because his RMs are also because they just add to the tax burden. for discussion in Thailand.
equipped to construct investment port- People are looking for asset-
folios for their clients. These people have expertise only in holding solutions that can
collecting land, not developing it. They keep their assets for many
generations.
At the same time, he believes open ar- also do not know how to sell it.
chitecture is the way to go. This also
At the same time, he adds, the
includes feeder funds for investors who The specific opportunity Supornpaibul regulators shouldnt shield local
are looking for more diversification by sees is in advising these clients on the wealth managers from overseas
investing in overseas markets. holding structure for their land so that competition.
it minimises their tax burden.
I love to be in an open
ACCESSING OLD MONEY
competition, I dont want to be
The centre-piece of the private banking He believes that providing a proper
protected. If you are protected
strategy, meanwhile, is being built service to clients in this area will deepen from international markets, you
around KBanks ability to straddle both their relationship with the bank and cannot improve your capability.
capital markets and non-capital mar- could, in turn, make them potential cus-
kets-related demands of wealthy Thais. tomers for capital market solutions as
well, in the long run.
In particular, Supornpaibul says that
offering more than just investments is We look at the whole picture, he ex- help a small client who has his money
key to wooing HNW clients in Thailand, plains. And at this point we dont mind tied up in land to get some of the pro-
given that so much wealth is tied up in if we are not charging a fee for our ceeds back, this individual could become
real assets such as property and land. advice. We want to build trust. Once we a big client.

108 WEALTH MANAGEMENT IN ASIA 2016

allocated
bullion
solutions
LIQUIDIT Y & TECHNOLOGY
EXPERT INSIGHTS

Bringing a broader and deeper

offering to Thailand
With the local stock market flat and interest rates low, a new approach is needed to
service the investment and other financial needs of Thai investors all along the wealth
spectrum. Don Charnsupharindr of Citibank is trying to drive such change.

Wealth management in Thailand is A TARGETED APPROACH

changing. At the top of the wealth With three retail banking branches in
pyramid, there is a small number of ultra- the country, the Citi offering has to be
wealthy, with a growing number of indi- carefully tailored to the banks cus-
viduals in the HNW segment. Following tomer base. This means focusing on the
in their footsteps is an-expanding group Citi Priority and Citigold segments.
of mass affluent customers.
Launched in 2016, Citi Priority focuses
Inevitably, each of these groups is on clients with THB1 million
looking for a different kind of help in (USD26,000) to THB3 million to invest.
terms of investment opportunities and Citigold, meanwhile, looks at clients
wealth-related needs. with at least USD100,000 equivalent.

Don Charnsupharindr, head of retail The banks approach in Thailand over

banking for Citibank in Thailand, has the past three years to drive a longer-
been doing some hard thinking about term mind-set in investing has been to
how to service these different sorts of offer its clients a global allocation-type DON CHARNSUPHARINDR
Citi
customers in todays more challenging of advice.
and volatile environment.
During this period, Citi has seen clients
In the past few years, there has been show more interest in investing in
a lot of development in the wealth space Foreign Investment Funds (FIFs).
in Thailand, he says. work with companies such as Allianz,
These are a version of the foreign funds JP Morgan and BlackRock. They bring
The big question, is which clients want that get wrapped by local fund houses. in the offshore fund and then wrap it
to start to delve more into mutual funds? For example, Citi has Thai partners who in the form of a local fund, in line with

110 WEALTH MANAGEMENT IN ASIA 2016

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what local regulations allow. Citi has have the potential to become Citigold
also recently launched direct investment clients, he adds.
Three challenges to Thai
into some offshore funds. success in wealth
PROACTIVE REGULATION
Falling interest rates have also played Regulation also has its part to play in First, getting the
their part in creating more opportuni- helping the market to develop. infrastructure right to give
clients more flexibility and
ties, awareness and interest in new
choice around what they
types of investment products as part of For example, explains Charnsupharindr,
invest and with whom.
a wealth management strategy. the governments deposit protection
scheme has previously set out that all Secondly, education
Just five years ago, one could easily bank deposits are fully protected, al- internally to ensure advisers
see time deposits in the range of 3% to though the authorities are gradually have the right mind-set,
and externally for clients to
4%, observes Charnsupharindr, but reducing this level. In the future, the
think longer term.
today its hard to get anything beyond limit will be reduced, to THB1 million.
the 1.5% to 2% range. Times are even Thirdly, planning for the
harder in the securities market. The Charnsupharindr thinks this change will future which is largely
bond yield curve is around the 1.5% encourage more people to start thinking guesswork when looking
plus or minus range, he adds. about how they diversify their invest- 10 years into the future,
but includes making wealth
management mobile and
enabling clients to review
their portfolio and interact
with advisers anywhere,
any time.
Citi as a global bank will play a role in terms of
being that alternative choice for Thai clients.

sumer. I think this is absolutely the right

direction, adds Charnsupharindr.

He sees this as creating opportunities ments, in turn potentially expanding the Yet despite a more open market and the
too: I think it encourages clients to think relationship they have with banks. new freedoms it offers Thai investors,
about how to manage [their wealth] in there is little doubt that they have a
a more open-minded manner and not From this perspective, Citi as a global preference for investments in Thai baht.
constrain their strategies to what they bank will play a role in terms of being
have traditionally been used to. that alternative choice for Thai clients, As a result, the feeder funds as well as
he explains, as well as having the broad local funds will continue to be at the
While Citi does not compete on a product range for our clients to select core of the wealth management busi-
branch basis with local players, its from, especially bringing in offshore ness for banks like Citi.
network, digital platform and the es- products that are really our strength for
tablished card business it has, do both our regional and global wealth For clients who are more sophisticated
provide other opportunities too. management platforms. and looking to have some exposure in
other currencies or to other products,
Our card business has a much broader In general, the Thai government, in con- meanwhile, they have the option of
presence in the Thai market, explains junction with the Bank of Thailand and additional choices and alternatives. We
Charnsupharindr. the securities regulator, seems to have see it as something that complements
come a long way in terms of measures and further develops the wealth man-
We then try to understand the client to create a more competitive landscape agement industry in Thailand, says
base and identify those individuals who that will eventually benefit the con- Charnsupharindr.

112 WEALTH MANAGEMENT IN ASIA 2016

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EXPERT INSIGHTS

Thai insurers jump on

diversification bandwagon
The affinity many Thais have had with savings products is slowly changing. And
insurance providers want to tap this demand through diversification in the product
offering and new distribution channels, says Kris Chantanotoke of Thai Life Insurance.

To date, around 50% of life insurance from the Thai General Insurance As-
products sold in Thailand have been sociation (TGIA) 4.1% for life insur-
savings-related; basically an annuity ance and 1.7% for non-life insurance.
endowment product with a guaranteed
interest rate. It is little surprise, therefore, to see
providers looking to capture as much
These provide the much-sought after of this opportunity as they can.
sense of security via a fixed return in a
given year. And most of them have been Thai Life Insurance, the countrys third-
sold through the banks. largest player in this space, is well-
placed among them. And it further
However, the game is starting to bolstered its position in December 2015
change. With an expanding middle class by acquiring Thai Cardif Life Assurance.
and a growing awareness and under-
standing of whats available, growth in At the time, one of the drivers for the
Thailands insurance sector is underway. deal was for Thai Life to be able to
broaden its distribution capabilities, KRIS CHANTANOTOKE
In response to this potential for a wider including its non-agency and tele- Thai Life Insurance

array of solutions, insurance companies marketing channels. In line with this, it

are developing both their distribution formed a new unit called Thai Life Part-
channels and range of products. With nership Solutions.
such diversification, they believe they
can penetrate greater market share. For the time being, however, bancas- The deposit rates are not very high, so
surance continues to dominate sales in banks offer this product to make sure
The positive signals for the insurance life insurance; accounting for half of the they can retain the customer and diver-
sector are evident in growth predictions market in Thailand. sify their investments, says Kris Chan-

114 WEALTH MANAGEMENT IN ASIA 2016

tanotoke, senior executive vice presi- they are trying to make sure their front- their own products anymore, explains
dent at Thai Life. line staff are better educated about Chantanotoke.
insurance and can discuss the options
DIVERSIFICATION LOOMING with customers based on goals and For example, the banks and other finan-
Yet Thai Lifes rationale to broaden its objectives not just commission. cial companies can provide clients with
distribution is certainly a sound one. a variety choices of products, including
OPEN ARCHITECTURE combining investment funds together
The low interest rate environment plus Against this backdrop, Thai Life is in the with insurance solutions.
the ever-reducing disparity between process of partnering with a local bank
rates in developed and developing coun- to design a platform for customers to And insurance providers and asset man-
tries is impacting the appeal of savings register all their insurance and asset agement companies alike can therefore
products among the emerging affluent management products, whoever they then reach more customers through a
in Thailand. This is driving interest bought them from. single channel.
among customers away from the tradi-
tional fixed income offerings towards While still a work in progress, Chan- MORE TOUCH POINTS
products such as unit-linked policies. tanotoke says the platform will enable Growth is on the agenda for Thai Life
Partnership Solutions, meanwhile, to
expand the number of firms it ties up
with, says Chantanotoke.

It wants to broaden its partnerships

Anybody who has a proper touch-point with the from banks to non-banking institutions,
customer can play that role, which means that an including retailers, consumer finance
insurance company today might be a wealth companies and telecoms, furthering its

management company in the future. customer reach in the process.

Going digital is another priority.

The firm is aiming to use new tools in

order to go directly to customers, as
Chantanotoke says this shift is also insurance agents to track their clients part of efforts to increase the number
taking place as customers become more overall exposure to all asset classes, in of touch points beyond agencies and
aware of what they want to invest in and turn helping them provide more tailored existing partners.
how they want to diversify their risk. and relevant advice.
And Chantanotoke says he expects this
For example, he explains, they are The partnership can also be extended will start to become more of a reality
looking for something more attractive, to the product offering, he adds, creat- as insurance companies make a greater
which varies the yield and enhances ing an open architecture for banks and foray into wealth management.
their opportunity to gain more. insurance companies.
Anybody who has a proper touch-point
This also highlights the importance for Such an approach to insurance is where with the customer can play that role,
insurance companies of helping to drive he says the industry should head, bring- which means that an insurance company
more of a needs-based conversation ing benefits to all parties. today might be a wealth management
with customers. company in the future, he explains.
At the end of the day, the distribution
According to Chantanotoke, a number channels need to become more open This is something we are looking at
of the leading local retail banks are now architecture, in selling more investment and expect to happen; it is just a matter
more focused on segment marketing; and financial products, and not only of time, he adds.

WEALTH MANAGEMENT IN ASIA 2016 115

FIRM PROFILE

Kasikorn Asset Managements

vision for Thai distribution
The firm is looking to take its product offering, infrastructure, and digital and data
capabilities to the next level as it strives to bring something new and wholly more
international to wealthy Thai investors, explains Benjarong Techamuanvivit.

The key to wealth management, across by offering investment products which

most of Asias markets, is balancing now span global markets. On offer are
demand and supply. a mix of asset types, specific industries
and regions.
Customers needs are evolving rapidly
and getting more complex, requiring And the firm is eager to expand direct
providers to fit new products to their investment capabilities to the regional
demands. All this has to be achieved level, says Benjarong Techamuanvivit,
within a tougher regulatory framework first senior vice president in the strate-
that is also changing. gic planning division.

KAsset has kept a keen eye on service,

by ensuring its technology is up-to-date BENJARONG
and multi-channel, making it relevant to TECHAMUANVIVIT
Kasikorn Asset Management
however clients want to invest.

In Thailand, Kasikorn Asset Manage- At the moment, it has a domestic to index local and foreign mutual
ment (KAsset) has emerged as one of market share of nearly one-quarter in funds, to money market vehicles, ex-
the countrys leading firms of its type various funds ranging from active plains Techamuanvivit.

116 WEALTH MANAGEMENT IN ASIA 2016

The firm has also kept a keen eye on across the globe. In February 2016, for
service, by ensuring its technology is up- example, besides FIFs, KAsset intro- Tangible growth goals
to-date and multi-channel, making it duced K-AEC for direct investment in for KAsset
relevant to however clients want to invest. ASEAN stocks.
With all the plans that KAsset
A BALANCED STRATEGIC VISION Further, demographic shifts have moti- has for 2016, it says that it
expects to attract about 27,000
Doing this via digital solutions is very vated KAsset to develop products that
new customers over the course
much front-of-mind for the firm as part cater to the needs of every market. of the year.
of its strategy.
For instance, K-GA is suitable for inves- The firm is also continuing
This includes enhanced platforms that tors who prefer to diversify their invest- to focus on growing AUM
make investment easy, under the banner ments in various types of assets around from THB1.136 trillion as of
December 31, 2015, by 4%
of Simplify Your Investment Life. the globe.
year-on-year.

For example, KAsset has said it wants K-STAR, meanwhile, offers automat-
to introduce investment portfolios ic investment unit redemption once
customised for individuals financial the investment units reach their ex-
aspirations. And in line with this, in the pected value. This allows investors
pipeline is a new service called My with little time to follow the markets with online functionality for its range of
Port Simulator. to yield profits. mutual funds and other businesses.

This will allow investors to find the most Additionally, K-GINCOME is for inves- When it comes to the product offering
suitable asset allocation models. tors which want a regular cash flow. too, she says KAsset is not just focused
on launching new products.

Instead, there is an ongoing review

process to determine which ones to take
When it comes to the product offering too, KAsset off the shelf and which products need
is not just focused on launching new products. to be launched.

Instead, there is an ongoing review process

The ASEAN-focused funds are a good
to determine which ones to take off the shelf
example. Plus, having such a capability
and which products need to be launched. also indicates the way forward.

In the future there may be some other

asset class that we can leverage via our
research, says Techamuanvivit.
Yet while enhanced distribution will enable IMPROVING INSIGHTS
the firm to reach new investors, Te- Amid these growth plans, Techamuan- The local knowledge the firm has is also
chamuanvivit says product development vivits objectives, she adds, include im- important.
remains a cornerstone of the business. proving business analytics.
We do company visits and research
Externally, KAsset is looking to further We are enhancing our customer rela- work ourselves and, of course, if we are
diversify its investment options, driven tionship management capability. talking about the longer term three
by what it foresees as economic inter- years onwards I think the middle-in-
connectedness. More specifically, the These initiatives will also form the foun- come clients will still need our advisory
firm has plans to extend investments dation to develop mobile tools along service, she adds.

WEALTH MANAGEMENT IN ASIA 2016 117

FIRM PROFILE

A novel approach to wealth

advice in Thailand
MBMG Group has carved a niche within the countrys wealth management industry an
independent offering combining investments, insurance, corporate solutions and family
office services. And it charges for the quality of its advice.

The real need for wealth management ally evolved and expanded albeit at a
in modern-day Thailand can probably slower pace than many investors and
be traced back to the Asian financial practitioners have wanted.
crisis of 1997. Until that point, the cur-
rency, the Thai baht, had been pegged Despite a wide number of internation-
to the US dollar, exchange control al investment assets and opportunities
regulations constrained capital flows, being made available in various guises
and strict rules inhibited foreign owner- in Thailand, investors can still only get
ship of Thai investments and assets. a much narrower range of options than
they can in jurisdictions like Singapore
Nearly two decades later, the initial or Hong Kong.
need to manage the currency has given
way to a broader requirement for invest- This is where Paul Gambles believes
ment advice, insurance solutions and that the value proposition of MBMG
other services to meet the needs of Group really becomes clear. And, in
emerging affluent as well as individuals particular, its investments-focused divi-
further up the wealth pyramid. sion, MBMG Investment Advisory. As PAUL GAMBLES
co-founder of the group, and managing MBMG Group

Whats more, the inbound and out- director of the investment advisory arm,
bound flow of funds has been signifi- Gambles has spearheaded the delivery
cantly liberalised and many qualifying in the Thai market of fee-based global
Thai assets have been opened to wider advisory services to both locals and
overseas ownership. expats alike. customers starting to get more sophis-
ticated and interested in venturing
In line with this, the product range in The rationale has been the following: offshore, this approach can add invest-
the local financial markets has gradu- with wealth continuing to grow and ments which are relevant and inter-

118 WEALTH MANAGEMENT IN ASIA 2016

national to their portfolios. It is very In pursuing this approach, Gambles is
difficult to get global investment and confident about how his firm has been Doing the right thing
wealth management advice in Thailand, performing in terms of delivering com- by clients
explains Gambles, who also serves as petitive and cost-effective products to
chief investment officer. clients. ETFs are one example of many. MBMG Group has been focused
on providing relevant advice
to its clients in Thailand since
While a lot of firms do a good job of COMPETITION DRIVING BETTER
opening its doors in 1995.
offering local products, there is defi- SERVICE
nitely a shortage of international knowl- This type of competition and alternative It has developed into a provider
edge, so we tend to focus on bringing for providing wealth management of investment advice, corporate
all of this together, consolidating what advice is also exactly what Gambles solutions, insurance and family
people do with their local and interna- thinks the local market needs. office services. And it has
expanded from its initial focus
tional exposures combined, he adds.
only on expats to now working
This is in order to create greater interest with many local clients.
VALUE OF A FEE-BASED and attract more quality to the industry.
MODEL Its advisory arm, MBMG
MBMG Investment Advisorys business In general, there seems to be little incen- Investment Advisory, is
model is quite different from how the tive for most Thai retail banks to focus registered with and licensed by
the Securities and Exchange
banks and other traditional players in on private banking services, given their
Commission of Thailand,
the local wealth management industry successes in the various retail segments. providing investment advisory
services and as a derivatives
adviser.

Among its advisory services

are: financial and investment
We get paid a fee, so the better the job planning; investment funds;
our advisers do, the higher the chance they have retirement funds; currency
markets; trusts; wills &
of getting an ongoing fee. foundations; insurance; and
tax planning.

operate. But Gambles says that he con- As a result, there are few organisations
siders this to be an important learning around to provide real investment control most of the wealth in the
curve for the market. advice of the type that MBMG Invest- country, to several hundred.
ment Advisory offers.
With the fees that the firm charges its In the meantime, he explains, more
clients based on the advice it gives to At the same time, there is a need for and more wealthy foreigners have
them, it places the focus and emphasis more people and products to continu- decided to move to Thailand, or they
of each adviser on the suitability of what ally educate the wider market about the might have chosen to buy a second
they are offering to their clients, to meet scope of global opportunities. home in the country.
their needs.
GROWING PIE These two groups are examples of the
We get paid a fee to do this, says Gambles also says he has seen growth expanding demand for more effective
Gambles, so the better the job our in the number of wealthy families in the and cost-efficient ways to manage
advisers do, the higher the chance they 20 years he has lived in Thailand in- wealth in the HNW and family office
have of getting an ongoing fee. creasing from a handful of those which space, adds Gambles.

WEALTH MANAGEMENT IN ASIA 2016 119

EVENT HIGHLIGHTS - PHILIPPINES WEALTH MANAGEMENT FORUM 2016 - MAY

A need for more investment and

conviction in the Philippines
The country faces a variety of hurdles to develop its wealth management industry.
Overcoming risk-aversion to turn more savings into investments, expanding the product
range, and developing more advisory capability are all key ways to breed investor
confidence and engagement.

Wealth management in the Philippines regulator needs to step in to help en-

continues to be characterised by savers courage a more structured and com-
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sible for oversight for banking, asset products are still too similar. Part of this AXA
management and insurance, there is no relates to developing digital tools and Commerzbank
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The win-win, it seems, will come when critical as they look to make themselves
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advisers offer needs-based selling via more relevant for the millennials, plus Swiss Life
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investors become a bit less risk-averse on clients today. Thomson Reuters
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as a way to build and protect wealth. Priorities for the development of wealth
management in the Philippines include:
However, to ensure any initiatives have educating investors as early in their investing; enhancing the competency
meaning and will have an impact, the lives as possible to be more aware of of bankers and other advisers / agents
through more formal training and as-
sessment; broadening the investment
options via a greater array of investment
products; and enabling more access to
invest overseas.

These were among the key talking points

at our 2nd annual event in Manila, where
250 senior individuals attended across
the top retail banks, trust banks, securi-
ties firms, insurance companies and local
asset management firms.

120 WEALTH MANAGEMENT IN ASIA 2016

Aaron Mullins April Tan Carlos Jalandoni Clement Lee Dhawal Kamath
Asiaciti Trust COL Financial Bank of the Philippine Islands Legg Mason Miles Software Solutions

Frederico Ocampo Gaurav Malhotra Ida Mendoza Josefina T Fno Leonardo Roxas Arguelles
BDO Unibank ASK Capital Management, Singapore CTBC Metropolitan Bank & Trust Unicapital Group

Maria Lizette Perez Maria Paz Garcia Michael Enriquez Nina D Aguas Noel Andrada
Metropolitan Bank & Trust Bank of the Philippine Islands Sun Life Financial Insular Life BDO Unibank

Phillip Hagedorn Rafael Ayuste Randell Tiongson Reynaldo G Geronimo Rizalina Mantaring
ATR Asset Management BDO Private Bank Registered Financial Planner Romulo Sun Life Financial
Institute Philippines

Robert B Ramos Roberto Vergara Steve Knabl Thomas Henze Valerie Pama
Union Bank of the Philippines Philippine National Bank Swiss Asia Swiss Life Sun Life Asset Management

WEALTH MANAGEMENT IN ASIA 2016 121

 Anthony Campbell-Brown David Varley Dominic Volek Sandeep Lalwani Stephen Lingard
AG Delta AXA Henley & Partners Miles Software Solutions Franklin Templeton Investments

The attendance was great and the coverage of all the key topics has been
really good, including client engagement, regulation, new products and
digital trends.
Maria Lizette Perez, Head, Private Banking Division, Metropolitan Bank & Trust

122 WEALTH MANAGEMENT IN ASIA 2016

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EXPERT INSIGHTS

Changing the Philippines

investment mind-set
Robert B Ramos of the Union Bank of the Philippines explains why investor education
and formal training for front-line bankers can make a wealth management offering more
compelling. This will change how the countrys emerging affluent think about investing.

When it comes to the concept of wealth Philippines. People dont talk about
management in the Philippines, most investments based on their current
investors still seem set in their old ways. objectives, their time horizon, or their
With the mentality of savers, they needs. What they do know is that equi-
prefer to hold most of their liquid assets ties are volatile.
in time-tested fixed deposits, rather
than investing in mutual funds that offer Tied to this mind-set is also a preference
the promise of higher returns and also for holding investment assets in the
more diversification. form of a trust.

A major appeal of time deposits is the Though these are widely-accepted

2.5% fixed return on offer. Yet while structures in the Philippines, they make
high enough to beat inflation, what they the process much more cumbersome.
earn is significantly lower than the
average 8% from equities on the local A trust is a complex structure, adds
stock exchange. Ramos. It integrates the US asset man-
agement and custody businesses into ROBERT B RAMOS
As a result, it is difficult to see how most Union Bank of the Philippines
one service. It serves its purpose here
of these individuals can achieve their but we need to learn from what is hap-
long-term financial objectives. pening in other countries.

There is much greater comfort with EDUCATION TO PAY OFF

time deposits, explains Robert B Being able to deepen the understanding Only then, says Ramos, will they be able
Ramos, first vice president and trust among investors generally of the value to objectively evaluate the risks as well
officer within the trust and investment of wealth management relies on proper as returns trade-offs associated with
services group at the Union Bank of the education about products. investing without getting disheart-

124 WEALTH MANAGEMENT IN ASIA 2016

ened by short-term influences, such as make it compulsory. At present, with
market volatility. bank staff able to take or leave these
Building the right wealth
courses, few advisers lack formal cer- proposition for the
In line with investor education, advisers tification and training. Philippines
too need to increase and widen their
knowledge, he adds. STANDING OUT Union Bank has identified its
target customer segment as
Beyond the quality of their advisers, a
the emerging mass affluent
The common approach in the Philip- big challenge for banks in the Philip-
meaning individuals with between
pines at the moment not dissimilar to pines is to differentiate themselves, as USD80,000 and USD500,000 in
what happens in many Asian markets fees and products are broadly similar. investible assets.
is to sell products which are front-of- Often, clients pick one bank over
mind. And in the Philippines, this tends another based on just one criterion: The appeal of these individuals is
clear, says Ramos.
to mean a time deposit. If we try to location. Clients go to a bank thats
provide more in-depth training to advis- nearest to them, explains Ramos.
They have the potential to
ers to enable them to understand what generate more business as they
might be suitable for a client, it will allow The surest way to make an impression grow in wealth and stature; they
them to offer different products and on the client, therefore, is to enhance can also serve as a good source of
services that will fit the needs of these the customer experience. This comes referrals for the bank.
clients, explains Ramos. back to the importance of quality of
In contrast, the relatively few
HNW and UHNW individuals
in the Philippines present less
potential for many local bankers;
these clients like to place some
Often, clients pick one bank over another of their assets in more mature
markets such as Singapore and
based on just one criterion: location.
Hong Kong.

It is also perhaps more realistic for

local banks to target the affluent
segment given the limited amount
of product innovation.
But prioritising financial education for advice. Products are standard, so you
investors rather than advisers may result cant really be exotic in your offering. While there are different types
in a bigger bang for the buck. So you have to compete on experience. of fixed income and equity funds
to offer short-, medium- and long-
It will, says Ramos, deter advisers from Those banks which are able to offer a term investment choices,
taking the easy road by trying to recom- broad array of products and services the strategies adopted by different
funds are more or less similar,
mend products for a client without first under one roof will also have a greater
if not identical, says Ramos.
taking the time to understand what is chance of success. But to achieve this, There is a need to bring in
suitable for them. institutions need to change the way more variety.
they sell products, to integrate various
The win-win will come when advisers aspects of the wealth management One way of adding variety to the
embark on the road towards needs- process into a single function. product mix is to have an open
architecture model, where banks
based selling at the same time as inves-
can sell funds from other providers,
tors look beyond short-term gains If you create alliances that allow you says Ramos.
towards building long-term wealth. to do different investments through one
account, you are in a better position to Union Bank is adopting this
Meanwhile, to ensure that any initia- succeed, says Ramos. Wealthier clients approach, he reveals, but this is at
tives can have the most impact, the are short on time, so they want a one- an early stage.
regulator is likely to need to step in to stop shop.

WEALTH MANAGEMENT IN ASIA 2016 125

EXPERT INSIGHTS

Catering to a more global outlook

in the Philippines
With restrictions in the types of funds which can be offered locally, Nanjo Berba of
Philam Asset Management, Inc. (PAMI) explains what the firm is doing to capitalise on a
growing interest among the affluent in accessing global investments.

With a growing economy that prom- of the strategies that PAMI has adopted
ises better days ahead in the Philippines, to try to stand out.
more and more emerging affluent indi-
viduals are eyeing global investment As an ambitious local firm, which ranks
avenues to grow their wealth. itself as number-three in the asset man-
agement pecking order it is also trying
Seeing this unfold, PAMI is among to be innovative in terms of its distribu-
those firms which is acting on this op- tion model; it is moving to a digital

The Philippines is a growing economy, which means

the existing market will become more affluent.

NANJO BERBA
Philam Asset Management, Inc.

portunity by tying up with interna- platform as well as tying up with the

tional peers to offer a broader set of largest pawn-shop chain in the country.
products to its clients.
The Philippines is a growing economy, plains Nanjo Berba, PAMI president and
In a competitive market which is dom- which means the existing market will chief executive officer. These investors
inated by large foreign rivals such as become more affluent, and will want to are already aware they are not going to
Sun Life Asset Management, this is one invest more to grow their money, ex- get the kind of growth they want from

126 WEALTH MANAGEMENT IN ASIA 2016

bank deposits, which has to date been This, he adds, explains why they prefer The objective of this, is to ensure that
the preference of domestic investors. bank-offered instruments, since this more people can afford to invest, ex-
gives them protection of the principal, plains Berba.
FINDING NEW OPENINGS despite the low returns.
The need to think differently about their The firm is looking for non-traditional and
investment strategy has driven an in- A NEW APPROACH non-bank partners who can reach people
creasing number of the countrys The obstacles for asset managers have in the lower to middle income levels.
wealthy to look to buy global invest- convinced Berba that the biggest prior-
ment products such as equities, fixed ity for PAMI is to be different. We want to tap a wider market given
income and balanced funds, on offer that competition at the HNW individual
from various asset management firms. Thats the only way to grow, he believes, level is already quite saturated, he adds.
and he says he is planning to achieve
In PAMIs case, in order to reduce any his goals by ramping up distribution as Thinking out-of-the-box like this gives
delays in bringing product to market, well as spearheading investment educa- him optimism about what the future
the firms approach has been to launch tion and awareness. Thats the reason holds for asset management in the Phil-
feeder funds, sold by Citibank, which why we are saying that we need to ippines, as well as for local investors to
are invested in master funds run by
Fidelity Investments.

This strategy has proven effective, says

Berba, within a mutual funds industry Two big challenges in the Philippines stem from
which faces various hurdles to growth. the fact that investors have traditionally
been risk-averse... plus, tough regulators
Two big challenges in the Philippines,
with strict rules make it difficult to
for example, stem from the fact that
investors have traditionally been risk- invest in anything new.
averse, not really looking beyond fixed
income instruments offered by the
banks; plus, tough regulators with strict
rules make it difficult to invest in any-
thing new. expand our private client business from move beyond what is known to be a
local to global, explains Berba. conservative stance.
In the funds space, for instance, while
asset management companies sell One of the steps it has taken to date is Given that economic growth in the
mutual funds, banks sell Unit Trust In- to go digital by tying up with an online country has been at a pace of about 6%
vestment Funds, and insurance compa- distribution channel such as COL over roughly the last decade, this helps
nies also sell funds, these are essen- (Citisec Online). fuel such sentiment.
tially all similar in their look and feel
yet each is governed by a different At the same time, PAMI is moving Thats a tremendous change from
regulator and therefore a different set towards setting up its own digital plat- where it used to be, and this is the
of requirements. form, so that in 10 years from now, reason why we think that [with] more
Berba estimates that 20% of its total people getting affluent [and] looking for
However, the biggest growth hurdle business will be done digitally. how to make their money grow, we can
remains the local investment mind-set. create more funds to cater to what they
Filipinos are generally very conserva- PAMI is also expanding its distribution want, explains Berba. This augurs well
tive, says Berba. They like something network and working on lowering the for the asset management sector [in the
that is guaranteed. cost of investing. Philippines].

WEALTH MANAGEMENT IN ASIA 2016 127

EVENT HIGHLIGHTS - MALAYSIAN WEALTH MANAGEMENT FORUM 2016 - JULY

Finding the way forward in

Malaysian wealth management
Perhaps most pressing in the country is the need to overhaul the business model, in
large part to kick-start the revenue engine by increasing the penetration of wealth
management products and services as long as this is more focused on the right type
of (longer term) revenue.

Hubbis 6th annual event in Kuala petitors and regulatory reform, among
Lumpur for the Malaysian wealth man- various changes underway. Secondly,
Thank you to our sponsors
agement community, in mid-July, came players must focus on building the right
at a time when the industry is facing culture; this needs to come via innova- Allocated Bullion Solutions
one of its toughest-ever years. Markets tion and human capital. But this is not Intellect Design Arena
are clearly tough for everyone, and chal- just about product innovation; rather, Henley & Partners
Heritage Trust Group
lenges are mounting across all aspects new ways to engage consumers and
IRESS
of the service and product offering. leverage relationships. Thirdly, it must
Sun Life Malaysia
be easier for clients to do business, by Vermilion Software
There is little doubt that the dynamics, giving them multiple points of contact Franklin Templeton
regulatory intent and demographics are through greater collaboration. Tied to Investments
all on Malaysias side when it comes to this is the need for clearer and more Mercer
Morningstar
developing a healthy and sustainable targeted communication for clients.
Rosemont
wealth management market. The ques- Fourthly, there should be more investor
Swiss Asia
tion-mark is over the pace it is moving. education and awareness generally, Temenos
with all industry stakeholders required Iyer Practice Advisers
There are several key ways in which to play a role in ensuring this. Thomson Reuters
Malaysian wealth management can
move to the next level. First, there is a Asset managers, meanwhile, need to
need to embrace change, given the extend their global offering to the local
inevitable emergence of fintech, the market, providing professional money
next generation of investors, new com- management in non-retail structures. Solution-based versus product-based
offerings will also enable stronger
manufacturer-gatekeeper relationships.

For Islamic wealth management, in par-

ticular, there is an opportunity for the
Islamic banks to also focus on HNW
business in addition to the retail market.

In insurance, providers can play a much

bigger role in the wealth management
sector if they can embed advice into dis-
tribution and offer more protection.

128 WEALTH MANAGEMENT IN ASIA 2016

Ai Mei Chan Alex Tan Alvin Lee Alvin Tan Anthony J. Harper
Affin Hwang Asset Management AmInvest Maybank Standard Financial Adviser Managed Accounts Partners

Carolyn Leng Alistair J. Macdonald, CFA Datin Maznah Mahbob Dr Mohar Yusof Gerald Ambrose
CIMB Private Banking Franklin Templeton Investments AmInvest Blueprint Planning Aberdeen Islamic Asset Management

K R Raju Kin Onn Kee Mahdzir Othman Munirah Khairuddin Nazaruddin Othman
Blueprint Group of Companies WIN Group i-VCAP Management CIMB-Principal Asset Management FIMM

Ng Chze How Philip Smith Puan Sharizad Binti Jumaat Raj Ganesarajah Raymond Lew
AIA Pension & Asset Management Zurich Insurance RHB Islamic International Asset Intellect Design Arena Sun Life Malaysia
Management

Robert Foo Seamus Donoghue Shan Saeed Steven Seow Yap Ming Hui
MyFP Services Allocated Bullion Solutions IQI Group Mercer Whitman Independent Advisors

WEALTH MANAGEMENT IN ASIA 2016 129

 Danny Chang Dominic Volek Hans Diederen Shanker Iyer David MacDonald
Standard Chartered Bank Henley & Partners Heritage Trust Group Iyer Practice Advisers Hubbis

This is a very engaging forum, with interesting topics and good questions
[being asked]. I am privileged to be a part of this [event], which is very useful.
Danny Chang, Head of Managed Investments & Product Management, Standard Chartered Bank

130 WEALTH MANAGEMENT IN ASIA 2016

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FIRM PROFILE

A wealth of opportunity for

RHB Bank
The Malaysian bank has its sights on building a wealth management offering for the
South-east Asian region that U Chen Hock believes can more-than-adequately compete
head-on with any of its peers.

Its never too late, it seems, for banks in falls into one or more of these categories
Asia to realise that they need to do more has a much broader range of financial
with the generally vast number of afflu- needs that can be serviced.
ent customers on their books.
We therefore see a lot of opportunity
Having under-penetrated and therefore to do more with them, says U.
under-serviced this segment until now,
RHB Bank is confident about what it can In practice, these customers have money
do for these individuals. We think there put aside for investments and are gener-
is a lot of room for us to play more to ally looking for wealth management
our strengths and build these out over products, including unit trusts, dual-
time to meet the needs of this segment, currency instruments, insurance solu-
says U Chen Hock, RHBs head of group tions, structured products, FX trades
retail banking. and other types of deposits. And RHB
doesnt want to miss out.
CLEAR SEGMENTATION
What RHB means when it defines its On the Islamic side of the offering, U says U CHEN HOCK
affluent segment are individuals with the bank is very much in line with the RHB Bank

a minimum AUM of RM200,000 aspiration of the central bank to grow

(USD49,000), or those customers with the Shariah-compliant share of the busi-
a home property valued at more than ness to 40% by 2020; it currently repre-
RM1 million, or people with a salary or sents around 24.1% of all assets.
income of at least RM20,000. return from their investments, explains
We want to help these affluent custom- U. This involves how they diversify their
From the banks existing base of affluent ers make their money work harder for assets, to give them more choice in
customers, it knows that anyone who them, so that we generate a much better terms of asset classes.

132 WEALTH MANAGEMENT IN ASIA 2016

 The overall customer experience, driven
Re-launch by the service, is another key way that
RHBs priorities
U believes the bank can stand out.
In line with its business strategy, Over the next few years, U says
RHB is undergoing a re-launch of To be able to achieve all this, he knows the bank has its sights set on
its premier proposition, meaning there is an urgency around developing three key objectives.
its top segment of wealth.
talent to support the areas of growth
First, is to continue with its
This involves a refresh of the he has earmarked. We have always
current strategy to manage its
brand some elements of which been very strong in the mass segment, business by priority segments,
will reinforce the way it reaches for example, but not as much in the mass especially its affluent and mass
out to these customers; others affluent and affluent segments. So, affluent customer groups, given
will provide added value, such as naturally, if we want to swing our focus, that it is yet to fully tap into the
a new premier card that comes opportunities these both present.
strategy-wise, to these two segments,
with exclusive benefits.
we have to make sure we have the kind
Secondly, is to focus on building
of talent to manage these customers. out its digital capabilities.

INVESTING IN THE VISION And thirdly, is to ensure it has the

PLAYING TO ITS STRENGTHS While still in its early days, U says the right type of people to win and
To date in Malaysia, foreign banks have RHB wealth management proposition service the business it wants to,
by growing, training and retaining
enjoyed a significantly higher penetra- is built on some solid foundations.
its talent pool.
tion of products such as funds than their
local counterparts. We have put in a lot of effort over the
last 12 to 18 months in creating the key
U has been watching this closely as he pillars to support the people, processes,
looks to make the RHB offering more products and technology, to help us to clients, he says. This means engaging
compelling than average, especially deliver the services that meet the millennials with tools to reach out to
since many customers are multi-banked. demands of this segment, as well as them in more relevant ways, for example
satisfy the expectations in terms of cus- via mobile apps, to make banking con-
This involves developing a greater un- tomer experience, he explains. venient. This also caters to their prefer-
derstanding in the first place of what its ence to transact online.
customers are actually looking for, and At the same time, to ensure the sustain-
then using these insights to build its ability of the model as well as client re- In line with this, the bank launched its
capability to match that. lationships, RHB is looking to create RHB Now Mobile Banking Application
more fee-based income streams. in May 2016 to offer customers simple,
What RHB can also bring to the table fast and seamless banking experiences
is our regional expertise, says U. Much of this will be driven by the in- using smartphones.
vestment on the IT front, starting with
This plays to the appetite of many of enhancing our loan origination system, It also includes a first-in-the-market
Malaysias wealthy and aspiring wealthy plus implementing a new CRM system feature that enables customers to send
to diversify outside of the country. along with a portfolio management tool. money to family members, friends and
We are also going to invest in a brand any individual using mobile numbers,
We have a regional asset management new digital platform to provide us with email or Facebook, without the need for
business out of Singapore, giving us the kind of flexibility to develop apps as a bank account number. Recipients can
access to more products than some of frequently as possible, adds U. then accept the transacted amount
the domestic players in Malaysia, and through an RHB account or any other
we can help clients manage their cross- This should also set the bank up well to Malaysian bank account. This is part of
border investments, he explains. This service the next generation. We are our digital strategy to meet the needs of
is where we are trying to differentiate. recalibrating the way we deal with these the new generation, adds U.

WEALTH MANAGEMENT IN ASIA 2016 133

EXPERT INSIGHTS

Can Malaysia create a real

culture of advice?
A combination of consumer pressure and regulatory reform are needed to enhance the
credibility of the countrys wealth management industry so that it can deliver more value
and genuine advice to investors, says Robert Foo of MyFP Services.

While product-pushing continues to planning profession as a strong advo-

be prevalent in many developing cate and voice for an independent and
wealth management centres, Malaysia unbiased fee-only advisory model, it
faces a particular challenge around has been difficult for the industry to
this issue which is largely due to a move forward.
lack of regulatory action and limited
investor activism. But there is some scope for optimism.

This is according to Robert Foo, co- There is definitely more acknowl-

founder and managing director of edgement about a need for advice,
MyFP Services, who says despite some says Foo, just not at the pace I am
recent new initiatives, the regulators happy with, because we have been
havent fixed the root of the problem. talking about it for years.

ROBERT FOO
There is definitely more acknowledgement about a MyFP Services

need for advice, just not at the pace I am happy with,

because we have been talking about it for years.

model really caught the attention of

As a result, explains Foo, who is well- Only recently, for example, has the the countrys central bank, Bank
known within the Malaysian financial concept of the fee-based advisory Negara Malaysia.

134 WEALTH MANAGEMENT IN ASIA 2016

It has provided some guidelines for there is pressure from the regulator, FPAM Boards policy making body, so
the insurance industry, for instance, explains Foo. he expects little change from FPAM.
by introducing a scorecard system and
enabling product providers to place What needs to happen is more com- The Association of Financial Advisors
non-commissioned products either petition, whether in the form of local (AFA), meanwhile, claims to represent
online or through bank branches. or overseas institutions, adds Foo. the intermediaries and stand between
Then there will be more emphasis by the customers and the product provid-
This means instead of buying insurance the regulators in terms of advice. ing institutions.
products through tied agents, therefore
incurring commissions, individual cus- He points to the examples set by the There might be a credibility issue
tomers now have more flexibility. regulators in markets like the UK and here, explains Foo, because AFA
the US, which has been intent on was started by long-time life insur-
Meanwhile, the Employees Provident driving changes in the industry. ance agents. So their perspective
Fund (EPF) is trying to build its own fi- could be more skewed towards life
nancial planning arm, to employ advisers Where there is more activity from the insurance than the whole financial
within its payroll to give advice to people Malaysian regulators more recently is planning profession.
on how to invest their EPF money. in the fintech space, as the authorities
At the same time, however, he ex-
plains that some of these advisers are
starting to see the importance of in-
dependent advice.

When the public is more educated, then they TAKING A BOTTOM-UP

will start to demand it, as they can see the APPROACH
various options and things that are If a top-down approach seems to be
happening all over the world. unlikely for the time being in Malay-
sian wealth management, a bottom-up
effort based on educating the public
seems to be more feasible.

Indeed, there is a pressing need for

RELUCTANT TO CHANGE want the financial services industry practitioners at all types of institutions
Reforms have not happened in any to be prepared for the threat from to help investors understand and ap-
notable way at the moment, mainly potential disruptors. preciate what choices are available to
due to the fact that the market is made them to buy.
up of a few dominant institutions and A CREDIBILITY ISSUE
their tied distributors, with a lack of It is also not very practical to rely on And this is not just from a Malaysian
competition to change the status quo, the various industry groups and rep- perspective; they should be looking
explains Foo. resentative associations across the at opportunities globally.
country to lead the necessary changes,
Further, it is unrealistic to expect any- based on what Foo describes as a When the public is more educated,
thing far-reaching in terms of an en- conflict of interest issue. then they will start to demand it, as
tirely new approach from the banks they can see the various options and
and the dominant institutional product While the Financial Planning Associa- things that are happening all over the
manufacturers in this area. tion of Malaysia (FPAM) might seem world, explains Foo.
a natural vehicle to drive reforms, Foo
This will most likely only come about says that many of the incumbent in- Then I think the regulators will prob-
when the public demands it, or when dustry representives dominate the ably move a bit faster.

WEALTH MANAGEMENT IN ASIA 2016 135

FEATURE ARTICLE

Re-igniting the revenue engine

Wealth managers have found it tougher than ever to make money in the first half of
2016. But beyond just proposing new investment strategies for clients, they need to
drive needs-based conversations to adapt and provide a more relevant offering.

Amid stagnant transaction volumes and

low risk appetite, more than ever wealth
managers need to approach the conver- Many clients appreciate
sations with clients with much more of fee-based pricing as it is
a longer term and diversified mind-set. simple, transparent and
aligns interests.
Their focus should be to develop a
better understanding of client needs
and expectations to adapt the offering
and recommended asset allocation.
PAUL STEFANSSON
UBS Wealth Management
Risk appetite is much lower than last
year. Advisers should adapt to that en-
vironment and not try to sell risky prod-
ucts that clients do not want, suggests
Arnaud Tellier, head of investment
services for BNP Paribas Wealth Man-
agement in Asia Pacific.
Risk appetite is much lower than last year.
EVOLUTION Advisers should adapt to that environment.
Against this backdrop, banks need to
enhance the offering for their clients.

This can be done in various ways both

in terms of the assets and solutions they of conversations and approaches to At UBS Wealth Management, Paul Ste-
make available, as well as via the types portfolio management taken. fansson, head of IPS portfolio specialists

136 WEALTH MANAGEMENT IN ASIA 2016

 A UNIQUE VIEW
ON GLOBAL
INVESTING
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takes a truly global perspective. Ours comes from
over 600 investment professionals on the ground
across more than 25 countries. Put our expertise
to work for you via our wide range of global funds.
Find out more at
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This advertisement is for information only and does not constitute investment advice or a recommendation and was prepared without regard
to the specific objectives, financial situation or needs of any particular person who may receive it. The value of investments and the income
from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not an indicator nor
a guarantee of future performance.
Copyright 2016 Franklin Templeton Investments. All rights reserved. Issued by Templeton Asset Management Ltd. Registration No. (UEN) 199205211E
FEATURE ARTICLE

in Singapore, says the focus this year

has increasingly been on giving clients
greater access to all kinds of alternative Risk appetite is much
investments, such as private equity. lower than last year.
Advisers should adapt to
UHNW individuals need more than that environment and not
just traditional banking services, he try to sell risky products
explains. It is important that we can
that clients do not want.
provide them with a mix of investment
banking, asset management and
ARNAUD TELLIER
wealth management.
BNP Paribas Wealth Management

At the same time, UBS will soon offer

mandate portfolios that utilise higher
weights in illiquid asset classes. This
is a common strategy for certain well-
known endowment funds and inves-
tors with longer time horizons, ex-
plains Stefansson. The wealth management industry in Asia is
going through a profound change in terms of
The right investment strategy must
how we will charge for our services.
inevitably take into account the fact
that asset allocation and diversification
are key to ensuring stable positive
returns, adds Tellier. Expected returns
have to be adjusted to current market
environment. Plus, he explains, more According to Jean Chia, head of equities Challenging markets inevitably put the
frequent portfolio reviews are advisable. advisory and sales at Bank of Singapore, spotlight on the service and product
creating a structured investment proposition. From a distributors per-
OUTCOMES AND NEEDS process, with after-sales delivery is one spective, this is where it is important
To really be able to determine which of the ways to make the engagement for them to ensure that product provid-
investment solutions are best suited to with investment solutions more sticky. ers can deliver on what they need.
todays environment also depends on
the ability of advisers to have more
needs-based conversations with clients,
WHAT WILL FINALLY DRIVE CONVERSATIONS WITH CLIENTS TO
and create outcome-focused portfolios. BE MORE NEEDSBASED?

This is starting to happen in some seg- 16% RMs being beer educated
to sell these soluons
ments. The wealth management indus- 21% Regulatory-led reforms
try in Asia is going through a profound
Changes in incenve structures
change in terms of how we will charge
for our services, says Stefansson. At Beer plaorms and
29% infrastructure
UBS, we see increasing client interest
More client educaon
in fee-based, as opposed to commis- 21%
sion-based, pricing models. In his view,
many clients appreciate fee-based
pricing as it is simple, transparent and
13%
aligns interests. Source: Hubbis Investment Solutions Forum 2016

138 WEALTH MANAGEMENT IN ASIA 2016

 DELIVERING EXCELLENCE IN
Hubbis_A4_July16_WIP.ai 1 28/7/2016 11:21:01 AM

ASIAN INVESTMENT
DELIVERING EXCELLENCE IN
At Fullerton, our understanding of the region comes from more than just
ASIAN INVESTMENT
analysis and statistics: we embrace the dynamism and energy of Asia. As
committed long-term investors, we see quality beyond the trends. Our recent
awards demonstrate the results.
At Fullerton, our understanding of the region comes from more than just
analysis and statistics: we embrace the dynamism and energy of Asia. As
committed long-term investors, we see quality beyond the trends. Our recent
awards demonstrate the results.

Best Fixed Income House Best SGD Bond Fund

2016 Morningstar Singapore The Edge-Lipper Singapore
Fund Awards Fund Awards 2016
Best Fixed Income House Best SGD Bond Fund
C
2016 Morningstar Singapore The Edge-Lipper Singapore
M Fund Awards Fund Awards 2016
Y

Best Local Currency Bonds

Best Hard Currency Bonds
CM

MY
Best China Offshore Bonds
CY Best Local
2016 Currency Bonds
AsianInvestor
CMY
Best Hard Currency Bonds
Asset Management Awards
Best China Offshore Bonds
2016 AsianInvestor
K

Asset Management Awards

Best Fund Manager, Singapore Best RMB Bonds, Offshore

Hard Currency Bonds, Asia Pacific Asia Asset Management
Best Fund
Citywire AsiaManager,
AwardsSingapore
2016 Best
BestRMB Bonds,
of the BestOffshore
Awards 2015
Hard Currency Bonds, Asia Pacific Asia Asset Management
Citywire Asia Awards 2016 Best of the Best Awards 2015

fullertonfund.com
fullertonfund.com | +65 6828 6100
info@fullerton.com.sg
info@fullerton.com.sg | +65 6828 6100

Source: Citywire, Morningstar,

Source: Citywire, Lipper,Lipper,
Morningstar, Asia Asia
Asset Management.
Asset Management.Morningstar Awards 2016
Morningstar Awards 2016 Morningstar,
Morningstar, Inc, Inc, All Rights
All Rights Reserved.
Reserved. Thomson Thomson
Reuters Lipper
ReutersAwards 2016
Lipper Awards Thomson
2016 ThomsonReuters. All All
Reuters. Rights
RightsReserved.
Reserved. This publicationisisforfor
This publication information
information only.only. All applications
All applications must bemust
madebeonmade on
the application form accompanying
the application form accompanying the prospectus,
the prospectus, which
which cancanbebeobtained
obtained from FullertonFund
from Fullerton Fund Management
Management Company
Company Ltd (Fullerton)
Ltd (Fullerton) [UEN: [UEN:
200312672W] or its approved
200312672W] distributors.
or its approved Investors
distributors. should
Investors shouldreadreadthe theprospectus
prospectus forfordetails
detailsbefore
before investing.
investing. TheThe
valuevalue of units
of units or shares
or shares in the Fund
in the Fund
and the accruing
and the income income accruing
to the to the units
units or shares,
or shares, if any
if any may
may fallfallororrise.
rise.Past
Past performance
performance isisnot notnecessarily
necessarilyindicative of future
indicative performance.
of future This
performance. This
publication
publication was, prepared
was, prepared withoutwithout
regard regard to the
to the specific
specific investmentobjectives,
investment objectives, financial
financialsituation
situation or or
needs of any
needs investor.
of any Investors
investor. may wish
Investors may wish
to seekfrom
to seek advice advice from a financial
a financial adviseradviser
beforebefore
makingmaking a commitmenttotoinvest
a commitment invest in any
anyFund.
Fund.InInthe event thatthat
investors choose not to not
seektoadvice
seek from
a financial adviser, investors should consider whether the Fund is suitable forinthem. the event investors choose advice from
a financial adviser, investors should consider whether the Fund is suitable for them.
FEATURE ARTICLE

For Stefansson, meanwhile, it is impor-

tant to understand the value-add that
Creating a structured comes from doing thorough due dili-
investment process, with after- gence on products.
sales delivery is one of the
ways to make the engagement More specifically, adds Tellier, the dif-
with investment solutions ferentiator stems from a particular
banks capacity to the source the right
more sticky.
product, using the right due diligence,
to understand where and how the
JEAN CHIA
product is being packaged. The banks
Bank of Singapore
advisers must also ensure clients un-
derstand this as well.

According to Marc Lansonneur, manag-

ing director and head of the Singapore
wealth investment & treasury business As something happens to the underlying, we need useful
at DBS Bank, after-sales service is a information to pass on to our RMs as well as clients.
key component.

It is easy to price a transaction and

book a trade, but as soon as something
happens to the underlying, we need whether clients should for example take While product innovation isnt top of
useful information to pass on to our profit or switch. the list for all distributors, this can be
RMs as well as clients, he explains. We important in helping to improve inves-
do some of this ourselves, but we also He adds that the bank will increasingly tor returns. This is especially the case
look to our operators to advise on assess partners on such services. if it leads to greater access to unique
products, adds Stefansson, in particular
in terms of alternative investments.

WHICH OF THE FOLLOWING SHOULD BE THE MOST IMPORTANT

STRATEGIES FOR UNCERTAIN
THING DISTRIBUTORS LOOK FOR FROM PRODUCT
MANUFACTURERS? TIMES
From an investment perspective more
42% Lower prices specifically, given the nature of markets
Product innovaon today, many clients are increasingly
taking a wait-and-watch, more tactical
5% Aer sales-service
approach.
Informaon and educaon

This includes investments which are

non-correlated.
21%
32% In addition, with so many over-crowd-
ed trades in the market across fixed
income, developed equities and emerg-
Source: Hubbis Investment Solutions Forum 2016

140 WEALTH MANAGEMENT IN ASIA 2016

 AV I VA I N V E S TO R S
For specific investor outcomes

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Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited (Aviva Investors). Unless stated
otherwise, any opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from
an investment managed by Aviva Investors nor as advice of any nature. This advertisement is prepared by Aviva Investors Global Services
Limited, registered in England No.1151805. Registered Office: No.1 Poultry, London EC2R 8EJ. Authorised and regulated in the UK by the
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Aviva Investors Asia Pte. Limited for distribution to investment professionals only. Recipients of this advertisement are to contact Aviva
Investors Asia Pte. Limited in respect of any matters arising from, or in connection with, this advertisement. Please note that Aviva Investors
Asia Pte. Limited does not provide any independent research or analysis in the substance or preparation of this advertisement. Aviva
Investors Asia Pte. Limited, a company incorporated under the laws of Singapore with registration number 200813519W, holds a valid
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20150811_02
FEATURE ARTICLE

ing market equities some contrarian clients to use more passive instruments
trades can offer good opportunities. in their portfolios.
Building robust portfolios

An uplift in returns is also possible The region still trails the US and Europe One of the key ways to build
through alternatives such as private in this way, given that Asian investors a robust portfolio for clients is
equity and real estate, to take advantage still believe they can do stock-picking based on the recognition that
the world is a lot more complex
of dislocation in the markets or dis- and out-perform the markets without
and volatile than before.
counted assets. too much difficulty.
So having a very dynamic risk
To be able to get through this uncer- By contrast, pension funds, for example, management strategy in place is
tain period, buying some simple put have for a long time had a core alloca- essential; this means that as risk
options can also make sense, as do tion to passive investments. changes, the portfolio adjusts
so that it is still optimal for the
hedging strategies.
investor. This is a big departure
This is due to the benefits of such instru-
from traditional portfolio
More broadly, structured solutions ments: they can help portfolio construc- management theory.
should continue to play an integral role tion and management in various ways
in client portfolios not really for such as transition management, liquid- For example, a robust portfolio
speculative purposes, but rather to ity management, managing portfolio risk refers to one that can take
into account current zero
protect portfolios and get access to and managing portfolio costs.
and negative interest rates. It
markets which investors might not oth-
must also be able to deal with
erwise be able to reach. In reality, it is possible to construct a unexpected potential events,
very good portfolio with passive invest- such as how QE will end.
GOING PASSIVE ments so, in fact, this part of the
There is also increasing scope for Asian process is active. There are also new approaches
for managers to consider as part
of portfolio construction.

These include factor-based

strategies, to build a more
Having a very dynamic risk management strategy in place diversified portfolio which is
is essential; this means that as risk changes, the portfolio not as sensitive to one or two
specific underlying factors.
adjusts so that it is still optimal for the investor.
Another important trend relates
to the importance of cost as
part of the process. This is being
driven by regulation around the
world
WHAT IS THE MOST IMPORTANT INVESTMENT THAT BANKS NEED
TO MAKE TO ENSURE A MORE SUCCESSFUL DPM OFFERING?

28% Educaon of RMs

Educaon of clients
MAKING DISCRETIONARY
Porlio /
OFFERINGS WORK
investment specialists
Todays market landscape also highlights
16% the importance of managed accounts
56% and DPM.

This is because the relationship between

Source: Hubbis Investment Solutions Forum 2016
bankers and end-clients is one where

142 WEALTH MANAGEMENT IN ASIA 2016

FEATURE ARTICLE

But the most expensive component of

the production chain is sales. Portfolio
To speed up the specialists, director/executive/senior
penetration of DPM director level individuals must be avail-
requires a move towards able to support the front-line adviser
performance-based fees. to sell this more complex solution. To
make it work, it is key for banks to build
the right tools and have the frameworks
in place.

MARC LANSONNEUR
At the same time, adds Lansonneur, to
DBS Bank
speed up the penetration of DPM re-
quires a move towards performance-
based fees.

there must be fiduciary oversight and

WITH SO MUCH VOLATILITY AND UNCERTAINTY
an ongoing relationship. For example, WHAT SHOULD ADVISERS FOCUS ON WHEN DISCUSSING
during the financial crisis in 2008, many INVESTMENTS WITH CLIENTS?
advisers realised it presented an op-
portunity to talk regularly to clients
about the re-allocations in their port-
7%
Performance and track record

folios as re-balancing took place. 57% Diversifica on benefits to

the por olio

And since 75% of the performance of Ease of explaining the

strategy to clients
average advisory portfolios in a private
bank under-perform discretionary port-
36%
folios, it is during such challenging times
that clients can see the value of DPM
especially in terms of the diversifica-
Source: Hubbis Investment Solutions Forum 2016
tion and risk monitoring, says Juan
Aronna, managing director and head of
investment and products for RBC
Wealth Management in Asia.

DPM becomes more relevant in chal- DPM becomes more

lenging and volatile times and in the relevant in challenging
case of black swans, he adds. and volatile times and in
the case of black swans.
So in line with this, and the fall in trans-
action revenues, banks need to look at
the way they address the challenges in
technology along with due diligence
and oversight, to present their infra- JUAN ARONNA
RBC Wealth Management
structure and train their bankers, to
make DPM a more fulfilling and trans-
parent experience for clients.

144 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

Physical gold: are you ready?

A low-yield environment should remind investors of golds role as a safe-haven

investment. But wealth managers and investors should also consider physical gold, says
Seamus Donoghue of Allocated Bullion Solutions.

Gold has always been a favourite asset the domestic economy, capital out-
class for many Asians, particularly flows and the depreciating currency,
among the Chinese and Indians, serving explains Donoghue.
as a safe heaven.
STICKY BUSINESS
Data from the World Gold Council Despite these market signals, not many
shows that since the 1970s, precious banks do much business in physical
metals have had an average of 63 gold, given its relatively complicated
months worth of bull markets, with an trading process.
average cumulative return of 385%.
Yet Donoghue believes that these in-
This compares with 42 months worth stitutions would find that it pays off in
of bear markets, with a negative return the long run.
of 44%, says Seamus Donoghue, chief
executive officer of Allocated Bullion For instance, he says that physical gold
Solutions. custody has no capital or leverage
impact on the banks; this is because SEAMUS DONOGHUE
Allocated Bullion Solutions
Meanwhile, among many asset classes, the physical gold does not sit on the
only gold has experienced more than a banks balance sheet.
15% return in the first quarter of 2016.
Meanwhile, banks can enjoy a stickier
The demand for gold as a safe-haven AUM, adds Donoghue, explaining that
investment is also growing in China, the majority of the gold that gets bought custody fees and high transaction fees.
for example, happening against the sits with the banks. What this leads to Plus, it is a differentiated offering to
backdrop of the uncertainties over for the banks, he explains, are recurring show clients.

146 WEALTH MANAGEMENT IN ASIA 2016

 Solutions built
on a strong foundation
J.P. Morgan is one of the most established providers
of structured products to the Asian region. Working
closely with financial intermediaries and local
distribution networks, J.P. Morgan meets the needs
of a wide variety of investors in the fast growing
markets of Hong Kong, Singapore, China, South
Korea, Taiwan, Malaysia, and Thailand.

For more information, contact us:

EDM_PB@jpmorgan.com or (852) 2800-7888

jpmorgan.com

J.P. Morgan is a marketing name for investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan
arranging, financial advisory and other investment banking activities are performed by a combination of J.P. Morgan Securities Inc., J.P. Morgan Securities plc
and the appropriately licensed subsidiaries of JPMorgan Chase & Co. in EMEA and Asia-Pacific, and lending, derivatives and other commercial banking
activities are performed by JPMorgan Chase Bank, N.A.
EXPERT INSIGHTS

Giving clients the product

proposition they want
Lavanya Chari of Deutsche Bank Wealth Management is a staunch believer in
working with clients to meet their shorter and longer term needs not fitting
everyone into the same bucket.

With the potential to access the relevant sify the product offering is high on the
suite of products from the investment agenda. It all stems from an approach
banking side of its business and various which is about having conversations
counterparties across the street, with clients to help them meet their
Deutsche Banks wealth management needs whether these are short-term
business is confident that it has weath- or long-term in focus.
ered the storm over the last 12 months
better than many of its peers. REFRESHED
The goal for the more forward-looking
We have focused on a few different private banks is to continuously enhance
things, says Lavanya Chari, head of global the value proposition and suitability
products and solutions at Deutsche Bank framework for their product offering.
Wealth Management in Asia Pacific. One
is capital markets, which is our bread- There is no question in Charis mind that
and-butter business. And we have made this involves refining the mix.
a concerted effort to grow the accruals
business, both from a funds perspective This is what we are in the process of LAVANYA CHARI
and from a discretionary portfolio man- Deutsche Bank Wealth Management
doing, she says. For example, we are
agement standpoint. focusing more on discretionary portfo-
lios. We are also making a concerted
At the same time, she adds that in terms effort to expand our alternatives offering
of structured products, credit-linked to clients to give them access to oppor-
notes have been a big success story for tunities they otherwise wouldnt get. the street, from which it can develop
the private bank. But the bank has much bespoke alternatives products. For in-
more to offer. And going forward, Chari This is based on the banks relationships stance, it works with managers to create
explains that continuing to try to diver- with pretty much all the fund houses on feeder funds to essentially give clients

148 WEALTH MANAGEMENT IN ASIA 2016

Aiming to be the best,
not the biggest.
With capacity-restricted equity funds and experienced
fund managers given intellectual freedom in an
entrepreneurial environment, our accent is on
performance.

Visit us at www.johcm.co.uk or contact our Asian Representatives

Andrew Ang Grace Se
Director of Asian Sales Client Service Manager
+65 6511 6313 +65 6511 6303
aang@johcm.com gse@johcm.com

JOHCM (Singapore) Pte Ltd

138 Market Street, #15-04 CapitaGreen, Singapore 048946
Tel: (65) 6511 6300
Fax: (65) 6511 6319

London - Singapore - Boston - New York

J O Hambro Capital Management Limited (JOHCML) is an investment boutique authorised and regulated by the UKs Financial
Conduct Authority. JOHCM (Singapore) Pte Ltd is a wholly-owned subsidiary of JOHCML and regulated by the Monetary Authority
of Singapore (MAS).
EXPERT INSIGHTS

the ability to invest smaller amounts lio to a private bank, so the ability to trade shouldnt impact the long-term rela-
into funds that would not be accessible FX, equities and other products they have tionship with the RM.
to them otherwise. Private market op- a view on becomes the priority.
portunities are also in focus, involving Our top RMs have known their clients,
sourcing opportunities for clients. Even though the bank might give them and often their families, for 15 years or
its house views and access to its product longer, and they do will not do anything
A further change is likely to come in suite, they simply wont relinquish that would negatively impact the client,
terms of the bank doing more on the control. To Chari, this highlights the she explains.
digital front. This is a significant focus stark difference between what happens
area for us, explains Chari. The way in Germany and in Asia. These are the According to Chari, the need for broader
clients look at their money has changed two extremes, and I have several con- and more open conversations with
because the world has changed, so we versations with my counterpart in clients is also a key way for private banks
are working on several initiatives to try Germany where he wants to make his to provide more value.
and take this business to the next level, business more like mine, yet I want to
including portfolio analysis plus our make mine more like his. Clearly we speak to them about the
internal straight-through processing to markets and the product offering across
bring down costs. Yet while the goal is to take the best- different asset classes, but we also have
in-class from both sides and try to conversations with clients around their
More specifically, the bank is building a combine them, the reality is that the personal situations, she says.
tool which looks at a clients portfolio penetration of discretionary mandates
and the extent to which it deviates from in Asia, for example, will continue to be This ranges from discussing setting up
the model portfolio based on the clients limited relative to Germany for the trusts, to children getting married, to the
agreed risk appetite and requirements. foreseeable future. possibility of divorce, to insurance. We
RMs can then discuss this with each work on every aspect of the clients fi-
client on a regular basis, to determine The fundamental difference in attitudes nances and business dealings, she adds.
if thats what they want in the short and needs of Asian clients is exactly why We have a wealth planning team whole
term, or if they want to move back to Chari believes relationship managers focus is on the clients best interests.
their ideal, or model, portfolio. (RMs) must have bespoke conversations
with the client rather than try to BROADENING THE OFFERING
THE RIGHT CONVERSATIONS squeeze them into a mind-set which just UHNW clients have been one of
A lot of the time and energy the bank doesnt seem to fit. Deutsche Banks key focus areas over
is spending to evolve in these ways is the last several years.
also for the purpose of facilitating more Many Asian clients want returns. They
needs-based conversations between do not want returns only in 20 years This is driven by its capabilities across
front-office advisers and their clients. time; they want them annually. different products and asset classes.

We need to offer clients more of what As a result, she believes that, in addition We have every single aspect of the
they need, acknowledges Chari. Some to a long-term portfolio, it is equally the product suite, across the spectrum,
clients will definitely want funds, so fiduciary responsibility of the adviser which very few other banks do, ex-
those are the individuals to whom the to try and meet all client needs. It may plains Chari.
bank will offer managed products and not be possible every single year to
discretionary portfolios, she says. achieve the desired returns, based on In addition, the bank is now targeting
market conditions. the broader HNW client segment in
Then there are other clients, such as the Asia. In line with this, the bank is working
young entrepreneurs in some countries And even where there is a short-term now on improving its systems as well as
in Asia, for instance, who are unlikely to focus by clients for a specific investment its processes, to service this larger group
cede supposed control over their portfo- or part of their portfolio, this doesnt or of clients.

150 WEALTH MANAGEMENT IN ASIA 2016

 External
Wealth Management
Platform
YOUR KEY TO INDEPENDENCE

Are you a Private Banker?

Do you want a lifestyle change?
Have you considered being independent?

LOOK NO FURTHER, CONTACT

SWISS-ASIA FINANCIAL SERVICES PTE LTD:

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EXPERT INSIGHTS

How Citi is enhancing its

advisory offering
Paul Hodes explains how Citi is enhancing its advisory offering to clients in the region,
as well as improving the education of staff to drive more needs-based conversations.

A huge amount of work has been under- The CDI measures portfolios in terms
way within Citi to raise the level of of how they are placed versus the rec-
advice it provides for its clients, says ommended model portfolio and the
Paul Hodes, head of consumer bank, underlying holdings, says Hodes.
wealth management in Asia Pacific, in
an interview. It also tests potential concentration risk
in terms of the extent to which clients
For the banks HNW segment, for portfolios are diversified across geog-
example, they now get in-depth and raphies and sectors, for instance,
analytical tools to review their portfo-
lios. This aims to help them to deepen EDUCATING STAFF
their understanding, not only their hold- To better educate its front-line staff,
ings, but also of the extent of the diver- Hodes says Citi works exclusively with
sification of their portfolios. the Wharton School of the University
of Pennsylvania, in terms of training.
The Citi advisory process has led to The goal is to deepen the understanding
strong sales and earnings, says Hodes, of wealth management and relationship PAUL HODES
along with positive client feedback. Citi
managers (RMs).
Advice can lead relationships in terms
of deepening understanding, and ulti- So when recommending a product, this
mately driving the companys business. should help the RMs understand what
the academic research is behind it.
For the banks affluent customer base, When we talk about portfolio or RMs need to get into a more sophisti-
the Citigold Diversification Index (CDI) manager selection, about diversifica- cated level of conversations with clients
is a simple tool to help clients better tion, or about risk versus returns, try to to provide ideas to them, and the tools for
understand their portfolios. think about what they really mean. them will help to educate clients too.

152 WEALTH MANAGEMENT IN ASIA 2016

EVENT HIGHLIGHTS - INVESTMENT SOLUTIONS FORUM 2016 - JUNE

Finding investment solutions

for challenging markets
Amid highly-challenging markets, product manufacturers and distributors urgently
need to get clients to use a broader range of portfolio and investment solutions. In
particular, diversification and risk management are critical.

In todays uncertain investment envi- banks, multi-family offices and IFAs, as

ronment, listening to clients to under- well as relationship managers and in-
Thank you to our sponsors
stand their needs and present diversi- vestment advisers from the industry.
fied portfolio solutions to them will Franklin Templeton
differentiate the winners and losers. There are clearly many uncertainties in Investments
todays investment markets. For iShares
Leonteq Securities
Indeed, against the backdrop of what example: Brexit discussions, oil prices,
STRATEGY Consulting
seems to be the toughest year for a long US Fed interest rate hikes, Chinas
Commerzbank
time for wealth managers to make growth issues, and more. Morningstar
revenue product manufacturers and
distributors must guide clients to use a As a result, the focus needs to be on
broader range of investments which are diversification of risk and also the re-
more suitable and relevant. balancing of portfolios.
An important consideration when
In line with this, we designed and hosted At the same time, it seems that what- managing portfolios today is also to
our new-format, investment-focused ever assumptions that investors might continue to move in the direction of
event in Singapore in June 2016. have about the past might not be rel- removing the responsibility for making
evant for the future. investment decisions from the end-
This brought together 275 senior indi- clients to the investment specialists
viduals including leading product & Advisers therefore need to question whether via a discretionary portfo-
fund gatekeepers from the top interna- their assumptions before building port- lio management (DPM) model or
tional and local private banks, retail folios for their clients. another format.

Advisers, as part of more outcome-

oriented and needs-based conversa-
tions with cleints, also need to re-align
client expectations in terms of returns
and performance with what the market
is actually offering.

There is, in general, a need to think

longer term which, ultimately, should
mean the longest time period which the
individual client can stomach.

154 WEALTH MANAGEMENT IN ASIA 2016

Akshay Prasad Anthony J. Harper Arnaud Tellier Arthur Wu Christophe Aba
Deutsche Bank Wealth Management Managed Accounts Partners BNP Paribas Wealth Management Morningstar JPMorgan Private Bank

Conrad Huber Dr Ekkehard J. Wiek Emmanuel Guillaume Franck Fayard Harold Y. Kim, Ph.D
Credit Suisse Private Banking Straits Invest Union Bancaire Privee Commerzbank Neo Risk Investment Advisors

Hrishikesh Unni Jean Chia Juan Aronna Juerg Kiener Leonardo Drago
Taurus Family Office Bank of Singapore RBC Wealth Management Swiss Asia Capital AL Wealth Partners

Marc Lansonneur Nicolas Rigois Pankaj Nagrath Paul Stefansson Prashant Bhayani
DBS Bank Standard Chartered Barclays UBS Wealth Management BNP Paribas Wealth Management

Roger Meier Steven Moeller Simon Ip Stanley Sia Tuan Huynh

Bank Julius Baer BlackRock Indosuez Wealth Management Standard Chartered Bank Deutsche Bank Wealth Management

WEALTH MANAGEMENT IN ASIA 2016 155

 Chinmay Patil Christian Obrist Patrick Donaldson Sally Kwok Scott Collinson
Leonteq Securities BlackRock Thomson Reuters BlackRock Franklin Templeton Investments

The event attracted a very good turnout, and with a good

cross-section of speakers. So with a large number of people
from diverse streams attending and sharing their views, this
is a great experience for everyone.
Rohit Jaisingh, Head, Equity and Commodities Investment Products, DBS Bank
Rohit Jaisingh
DBS Bank

156 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

Getting onto a banks funds

distribution platform
Given the dominance of banks in Asia in distributing mutual funds, Stewart Aldcroft
of Citi reveals what asset managers must do to get approved onto a banks platform,
and how to avoid getting kicked off.

Banks have a dominant position in Performance is also critical, given the

terms of distribution of funds in Asia. desire among banks for best-of-breed.

In Hong Kong, Singapore and Taiwan, Consistency of returns over three and
for example, banks represent more than five years is key, as is having the same
80% of all mutual funds sales. manager for these time periods, follow-
ing a repeatable and definable invest-
According to Stewart Aldcroft, manag- ment process. This should create dif-
ing director of Citi Markets & Securities ferentiated alpha to appeal to the bank.
Services, and a senior advisor in the
Asian fund management industry, fund For pricing, standard funds have a front-
houses must adhere to some specific end load but often 5% is fully rebated/
criteria in line with the distributors discountable. They also need annual
clearly-defined processes to get their management fees with trail commission
product on the platform. to create annuity fees for the banks.

THE 4Ps When it comes to people, local represen- STEWART ALDCROFT

Citi
Product is often the most important one, tation is necessary, as is responsiveness
explains Aldcroft. in terms of any follow-up on enquiries.

Some key features include being de- Once on a platform, Aldcroft says funds
nominated in US dollars, although RMB must be careful not to get de-selected.
is increasingly sought after by mainland against the benchmark index and peer
investors. Further, UCITS (Luxembourg This might happen due to: the departure group; corporate risk; capacity constraints;
or Dublin) is preferred, and an AUM of of the fund/portfolio manager; style drift; and transparency of fund, manager or firm
USD500 million-plus is ideal. poor risk controls; under-performance in providing information.

WEALTH MANAGEMENT IN ASIA 2016 157

EXPERT INSIGHTS

Making the switch from

products to portfolios
Bank distributors are working hard to align their models with the goal of having
needs-based conversations with customers. But matching intention with the reality of
delivering longer term portfolio advice is a challenge that requires support from their
funds partners, says Damien Mooney of BlackRock.

Many of the larger bank distributors in business in Asia Pacific. But it is very
Hong Kong and Singapore have made a much early days.
concerted effort over the past couple
of years to head in the direction of more Ultimately, he adds, there is some
of a portfolio advisory approach. Their dynamic tension between what the
goal is to genuinely focus on a custom- banks are trying to achieve versus their
ers needs as the basis for the invest- ability to execute it.
ment conversation.
HARD TO DO IN PRACTICE
The efforts to move in this direction are One of the biggest impediments to these
particularly noticeable within those banks moving from being product-led
private banks which are determined to sales organisations to being able to offer
try and increase their discretionary busi- a portfolio advisory proposition, is the
ness, beyond the mainly single-digit client base itself. Not all of them want
AUM in such mandates today. to actually be advised, says Mooney.
Many of them prefer to have a trans-
If you talk to the senior management actional relationship with their RMs. DAMIEN MOONEY
BlackRock
in these organisations, they say they
have changed their models, that their Time is also not on the banks side.
RMs are no longer incentivised on Changing the nature and focus of the
revenue per se, that they have got a bal- conversation is also difficult amid an
anced scorecard among a mix of KPIs, environment where regulation on giving
and that every part of the advice process advice is so onerous. process, they default to talking to the
is centred on a needs-based conversa- customer about something they can
tion, says Damien Mooney, head of As a result, rather than an adviser buy in less time and without as much
BlackRocks retail and wealth advisory spending up to two hours on this paperwork required.

158 WEALTH MANAGEMENT IN ASIA 2016

Another hurdle for the banks in making I would imagine that 10 years from now,
a portfolio, needs-based approach work everything will be much more transpar-
Looking onshore
is the dependency on having skilled RMs ent, says Mooney.
and portfolio account managers. For fund houses looking to
In addition, portfolio-wise, services will capitalise on the opportunities
This is where some banks have been essentially be standardised using tech- in Asia, and not get caught up
doing the same as everyone else,
found wanting. nology, and, in some instances, product-
they need to look onshore.
based commissions will have disap-
RM turnover remains high, so the banks peared. he adds. Thats where the growth
ability to develop more of a portfolio potential is, says Mooney. For
service at a cost they can maintain is a TRUE PARTNERSHIP international asset managers
challenge, says Mooney. In bank distributors trying to move with any medium to long-term
ambition in this region, and
towards a more sustainable model, fund
which want to build scale, they
AGAINST THE TIDE houses can help them.
cant be a foreign company. They
None of these factors are deterring can be international, but they
Asias wealth management industry One of the things that BlackRock aims cant be foreign.
from trying to effect change. to do in line with this, is have a genu-
inely differentiated relationship with This means they need to put
down roots in markets where
The pressure to create more sustain- its distribution partners.
they see growth. To do this
ability in the advisory model is increas-
successfully requires them to
ing. This is coming not just from the need We dont want to be regarded as just determine how they can make
to make the economics of the business another product provider, says Mooney. themselves relevant.
work better, but also from the spotlight
on fee transparency which Mooney Three or four years ago, our main rela- And that wont only be through
selling offshore funds.
believes is only going to get brighter. tionship with these firms was mutual
funds based. Today, we have a very differ-
As a result, the historical
There is definitely more connectivity ent relationship as a result of the breadth approach of importing an
among regulators around the cost of an of our product and advisory capabilities, offshore fund range from Dublin
advice-based conversation, he says, he explains. or, predominantly, Luxembourg,
and there is much more focus by inves- into Asia, is no longer enough.
tors in todays low interest rate, low For example, BlackRock is making its
For Mooney, two simple facts say
return environment on what they are ETFs available inside the banks discre-
it all about the potential from
getting for their money. tionary portfolio teams, plus the firm is the vast amount of untapped
doing much more model portfolio busi- wealth onshore: an average cash
He also foresees the next five to 10 years ness in some cases providing asset balance among Asian investors
as going to be arduous. allocation services. of four or five times that in
the West, yet a much lower
percentage of their investments
The cost pressures are not abating On top of this product proposition, the
being in managed funds.
within the industry, with revenues value-add comes from the firm helping
coming under significant pressure. The with education, training and also, po- Over time, I think we will see
squeeze is certainly on, he explains. tentially, with distribution. a greater move into managed
investments, mutual funds and
ETFs, he predicts. Thats going
It is those incumbents in the industry More specifically, this might involve
to come from cash and from
which can migrate to a model where conversations about how these dis-
wealth accumulation. And just
they will be able to offer the services tributors can evolve their business using having offshore funds wont
that scale, and at a lower cost, which will various technologies to make it more be enough.
win in the long run. focused on portfolio advice.

WEALTH MANAGEMENT IN ASIA 2016 159

EXPERT INSIGHTS

Why bank distributors must

re-tune product platforms
Intermediaries in Asia are grappling with how they adapt their product offering and
position investment strategies to end-clients in todays environment. June Wong of
State Street Global Advisors explains the role that fund houses can play.

The influences of challenging invest- The old model of engagement cannot

ment markets, relatively low fund continue. There should be a better way
penetration and regulation such as fee of serving clients.
disclosure are driving a much-needed
transformation in product platforms To do this in practice involves them
at private banks in Asia. increasingly looking at passive instru-
ments, such as ETFs, smart beta strat-
Over the past 20 years, the dominant egies, and outcome-oriented invest-
model of client engagement has been ment solutions.
to use thematic and active strategies,
generally via stand-alone products. A FULL MENU
The move towards a broader and more
But the limited success that many holistic product offering is inevitably
banks have had in selling funds cannot a positive development for a firm like
be ignored. SSGA, given its focus on active and
passive strategies.
As a result, a growing number of these JUNE WONG
State Street Global Advisors
distributors are adapting and refining On the one hand, it has a comprehen-
their approach, including leaning towards sive range of passive and smart beta
more of a discretionary offering. strategies, whether in the form of ETFs
or UCITS structures. This is comple-
More and more intermediaries need mented by the more outcome-focused
to prepare and re-invent themselves solutions, explains Wong. options in how it can support distribu-
for todays world, says June Wong, tors, depending on their preferences.
head of Asia ex-Japan for State Street At the same time, the firms active funds Plus, SSGAs offering is global, so Wong
Global Advisors (SSGA). and alternatives offerings give it more says it can work with intermediary

160 WEALTH MANAGEMENT IN ASIA 2016

partners wherever they make their For example, she says they need to be
buying decisions. more technical, to be able to better
New approaches to
understand the needs of intermediary investment models
Further, it can either act simply as a partners. Their role must develop
provider of individual products and beyond that of just a relationship The results of a recent survey
solutions, or work in a more consulta- manager, so that they can work with by SSGA, entitled Building
Bridges, highlights how retail
tive way with a bank if they are looking them to create more relevant solutions.
and institutional intermediaries
for advice and guidance on how they
can access new approaches, such
formulate their asset allocation and Modern dialogue needs to go beyond as Smart Beta and objective- or
populate the product platform. just performance and talking about needs-based investing, to have
any chance of meeting their long-
term return goals.

Some of the key findings include:

The old model of engagement cannot continue. High return expectations

There should be a better way of serving clients. institutional investors are
expecting a 10.9% return
over the next five years and
are pressed to find them
in todays lower-for-longer
environment
In line with the stage of development different campaigns to launch togeth- Need for change 97% of
of the industry, the current discretion- er, she adds. respondents expect moderate
to significant change in the
ary-focused phase requires a good
industry. New approaches are
supply of underlying products to serve This is also essential given clients now
required in todays lower-for-
as building blocks. have access to more information, and longer return environment to
new ways of sourcing it, via a greater meet these objectives.
In todays low-yielding environment, variety of communication channels. New investment approaches
characterised by volatile markets investors confronting
performance shortfalls are
where the outlook for individual asset BETTER SOLUTIONS
re-assessing their overall
classes is unpredictable, asset manag- Wong believes that more transparency
investing approach to better
ers and investors alike have to work driven by regulation and a portfolio-led target drivers of performance
much harder to generate returns in approach is a good thing for Asia, to and to ultimately adapt to
terms of asset allocation and being ultimately serve end-clients better. what is believed to be the
more efficient, says Wong. This will steer the industry towards new norm
more cost-effective solutions, she
Historically driven by asset
PROACTIVE explains. But it is all part of an evolu-
classes, the survey results show
But the help that fund houses like SSGA tion which will take time. that many investors are looking
can give distributors goes beyond the to objective- and factor-based
products themselves. In particular, she sees this as having an investing to meet performance
impact in servicing the growing mass shortfalls.
As part of the evolution that private affluent and emerging HNW segments.
As a result, the investment
banks need to go through, asset man-
paradigm is shifting from
agement companies need to think There is genuine growth in Greater the top-level asset portfolio
about the types of individuals who they China as well as South-east Asia in construction perspective to
put in-front of fund gatekeepers. terms of the middle class and mass af- specific implementation of these
fluent, adds Wong. They need more new approaches using the
efficient ETF vehicle.
We need to hire differently in terms assistance in their investment decisions
of front-line staff, says Wong. and portfolios.

WEALTH MANAGEMENT IN ASIA 2016 161

EXPERT INSIGHTS

Driving a needs-based
conversation
Shikha Gaur of Aon Hewitt explains the role of advice in guiding expat clients in
Singapore, and explores how the role of robots in the process must push professionals
to up their game.

For many investors, the investment world [the client] is trying to do from a longer
seems daunting and perhaps overwhelm- term perspective.
ing when they first start to learn about
it. Then, when they consider investing With expats in Singapore, therefore, that
outside of their comfort zone, perhaps means digging into what has brought
in a country whose system is unfamiliar, them to move to another country in the
yet more uncertainty creeps in. first place. There is then a place for dis-
cussing how investments, in the context
This is exactly the type of anxiety that of that individuals financial history, can
Shikha Gaur, executive director of wealth help in meeting those goals.
management at Aon Hewitt, is in the
business to quell. Her clients include A client doesnt usually have an invest-
expatriates in Singapore, and its her job ment need, explains Gaur. They have a
to make sure theyre guided through the purpose that they are trying to [achieve].
investment process.
ADVICE FIRST
So, whats the first step? According to Aon Hewitt, headquartered in London, SHIKHA GAUR
Aon Hewitt
Gaur, it shouldnt start with anything to provides HR consulting services, cover-
do with an investment. And with her ing talent, performance, rewards and
12-strong team, she focuses on getting retirement solutions.
the basics right first a lesson that more
advisers in the market need to heed. Specific to the investment business, it
deals both with individuals and corpo- insurance requirements. We are not
Our conversation doesnt typically begin rate clients that pay for advice. From pushing a product, urges Gaur. We will
with investments, she explains. It starts there, it can place funds, manage invest- give clients the advice and they could
with something broader in terms of what ment portfolios, or help with clients walk away and do it themselves.

162 WEALTH MANAGEMENT IN ASIA 2016

In this way, the firm has a clear long-term Their other needs are simply dictated There is a need to start teaching about
focus. It can be challenging selling fee- by the times. money at a younger age, she says. In
for-advice over a commission-based schools, it could be mandatory to have
model associated with the sale of product, We are finding that there is an increas- subjects related to money.
which is commonplace in this market. ing need [in Singapore] for corporates
to put in retirement plans for their em- FINTECH IN THE MIX
However, Aon Hewitt is convinced that ployees, says Gaur. The reach and accessibility of financial
the value of advice will start to count education is increasing all the time in a
sooner rather than later, despite the As a hot topic, corporates now need to market like Singapore, which has a well-
digital disruptors. review any existing schemes they might populated fintech start-up scene.
have for their employees. They are
One of the reasons for this belief, says looking to provide equitable benefits But when it comes to the broader goal
Gaur, is the need for education. This for their employees, she explains. of providing advice, robots are a bit of
has become even more important given a way from doing the job of firms like
the complexity of the industry and Gaur also believes there is a pressing Aon Hewitt at this stage.
often limited transparency in Asia. need to include women in retirement
discussions. [Women] are out of the Saying this, Gaur does see digital-led
LONGER TERM PLANNING workforce for reasonable amounts of disruption as being a distinct possibil-
Working with an expat client base time due to other commitments, she ity going forward.
brings with it specific requirements in says. They typically dont earn as much
terms of the advice that Gaur and her as men in similar roles, but they have I think [the industry] will rapidly
team need to offer. longer lifespans. change because, if done correctly, it
will create awareness [of the need for
advice] and people will be more savvy.
They will know what to look for, and
they will know what to ask for when
I think [the industry] will rapidly change because, if looking for the next level of advice.

[digital is] done correctly, it will create awareness [of the

As a result, professionals in the wealth
need for advice] and people will be more savvy.
management business must make sure
they stay relevant for their customers.

As an industry, we could have mentor-

ing programmes in place, she says.
As citizens of at least one other country Research in 2015 conducted by Fidel-
and living in another, she says they have ity Investments, for example, suggests That means apprenticing up-and-coming
fairly complicated tax needs. It is critical that women save more money than individuals with those who have good,
that these taxation needs, along with men; and some other studies which old-fashioned experience, and factoring
other financial needs, are captured in have been done point to women being in that a good portion of customers are
an individuals investment portfolio. slightly better at investing than men. in the younger generations.

Now, there appears to be an increasing Gaur stresses that retirement education In terms of making it exciting, I think
expectation for companies to provide needs to be universal; even someone it is important to represent the diver-
more holistic wellness benefits - a com- who puts aside 10% to 20% of their sity that the industry has, adds Gaur.
bination of health, fitness and insurance income for retirement assuming they
features, to their workforce. This is no start this early enough can make a In other words, there is a need to
different for the expatriate population huge positive impact on their future balance out greying bankers with some
in organisations. down the road. younger blood.

WEALTH MANAGEMENT IN ASIA 2016 163

EXPERT INSIGHTS

No room for complacency in

distribution
In the face of volatility stemming from Chinas markets, Brexit and global economic
headwinds, Alison Brown explains how HSBCs funds division is positioning itself for
growth across the entire landscape of wealth management distributors.

Expanding and diversifying its universe with HSBCs private bank, which is also
of distributors in Hong Kong and China important to us, and we are slowly ex-
has been a key goal for HSBC Global panding our presence in this segment,
Asset Management and the strategy says Brown.
has had an increased focus since Alison
Brown came on board in mid-2015 to BEING RELEVANT
run sales for the wholesale business in Despite the access that Browns busi-
Hong Kong and China. ness has to HSBCs retail banking and
wealth management, she knows never
The aim has been to expand beyond to become complacent.
HSBCs retail banking and wealth man-
agement business albeit this remains In line with this, the past 12 months have
the foundation distributor and integral been dedicated to servicing the bank in
to the business. We understand the a way that can add more value to it.
benefits of broader distribution via third
parties, explains Brown. This goes beyond simply rationalising
the product range, which is common- ALISON BROWN
HSBC Global Asset Management
Today, it is about working with more of place at the moment among her com-
a cross-section of firms within retail petitors. The funds also need to be
banking, with an eye to insurance com- competitive, and give the distributor
panies as well as third-party platforms. what it and its customers want at a
particular point in time, in order to fill
Plus, to capitalise on Chinas opening, gaps they have identified. three foreign providers of funds to
developing the cross-border business service the inbound and outbound flow
is another key goal. Last but not least China has been an obvious example. of wealth is an important ambition for
is servicing the private banks. We work For example, becoming one of the top HSBC in the coming years.

164 WEALTH MANAGEMENT IN ASIA 2016

We have an established network and and fund managers, and as the firm The teams objective is to expand dis-
an advantageous position with HSBCs wants to be well-positioned irrespective tribution across retail banks, insurance
presence in the retail space in both of the market environment. If we can companies and also on platforms that
Hong Kong and China, and work very do a decent job in explaining our invest- are emerging, explains Brown.
collaboratively with our joint venture ment strategies and positioning our
partner HSBC Jintrust in China, says funds in comparison to competitors, we We already have the advantage to be
Brown. This plays to HSBCs strengths have got more chance of being consid- able to leverage HSBCs extensive
because China has a high awareness ered in a portfolio. network in Hong Kong and China, and
of the banks brand, particularly in the are looking to develop other distribution
Pearl River Delta. For example, HSBCs capabilities on the channels to maximise our reach to cus-
fixed income side have enabled the asset tomers, she adds.
This objective was given a boost in manager to buck the trend of many com-
December 2015 when HSBC Global petitors finding it difficult to attract net The firms investment in its recent mar-
Asset Management announced its first inflow in todays volatile environment. keting campaign, Let Dreams Fly, also
Mainland fund in Hong Kong under the The flagship HSBC Asian Bond fund cel- helps in Browns distribution of funds
Mutual Recognition of Funds between ebrated its 20th birthday in July 2016. in Hong Kong.
the Mainland and Hong Kong. It subse-
quently launched its second fund in late RELATIONSHIP DRIVEN People can understand more who HSBC
June 2016. Brown is very aware of the need to win is as an asset manager a disciplined,
over fund gatekeepers as well as rela- dependable, international and sustain-
The first offering, HSBC Jintrust Large tionship managers within HSBCs target able manager which is committed to
Cap Equity Fund, invests in Mainland distributors. investing clients money with care, and
China large-cap blue chips; the second in line with their needs and expectations.
fund, HSBC Jintrust Dynamic Strategy If you have good information and are
Mixed Securities Fund, is a multi-asset positioned well, they understand the With an objective to build awareness
fund which invests in mainland assets value we can add, she explains. of HSBC Global Asset Management,
including stocks and bonds through the campaign positions the firm as
dynamic asset allocation. This requires her to maintain a sharp stewards of imagination, where the
focus on continuing to up-skill her sales asset manager inspires people to
SERVICE UPGRADE people, and ensure that what they give imagine their future and invest to make
In addition to product development, gatekeepers is relevant and consistent. it possible whether the future imag-
Brown and her team have been working ined is their own, that of their business
on enhancing key components of the It has also been important for Brown or of their clients.
service offering. These include: speed- to re-arrange the structure of the sales
ing up the fund houses response time team, to ensure that business develop- Our greatest strength is our client
to client enquiries, the quality of the ment people are trained in all aspects. focus: our first objective is to meet our
documentation, providing timely and clients expectations, says Brown.
targeted updates, and giving clients So even if one of them leaves the or-
access to product specialists and port- ganisation, the team structure enables To do this, return is obviously impor-
folio managers. others to have a clear understanding tant, but just as important is how we
of existing relationships with a par- manage our clients money. We are one
These features, combined with the flex- ticular distributor. of the few global managers with the
ibility and willingness to provide alterna- ability to understand and support ambi-
tive strategies, has created momentum They can, therefore, ensure that gate- tions of individuals, corporations and
with third-party distributors especially. keepers arent subject to being ap- institutions with a full range of financial
proached by yet another individual and services products, services and advice
Brown says this is important since there then having to start a conversation that encompass todays needs as well
is a time and a place for different funds from scratch. as future plans.

WEALTH MANAGEMENT IN ASIA 2016 165

FEATURE ARTICLE

Changing the rules of the

advisory game
Better advice in Asia can only come with the willingness and ability of wealth
managers to position products as solutions, drive simplicity and transparency, and
enhance client service. A focus on long-term portfolio value must replace the (continued)
tendency towards short-term conversations.

There is broad consensus among practi-

tioners in Asian wealth management that
the industry lags the US and Europe when If you incentivise on short-
it comes to providing advice to clients. term objectives you will
always have the mind-set of
Yet there is some level of belief that short-term product push and
wealth managers are increasingly posi- instant gratification from a
tioning themselves as trusted advisers
revenue stand-point.
or at least realise the urgency now of
doing so.
ROGER BACON
Citi Private Bank
But to achieve this requires firms and
advisers to engage clients in strategic
conversations around what trusted
advice means. This needs to lead with
asset allocation and risk management,
rather than bottom-up implementation money should be managed. They are are able to create wealth for the client,
according to Roger Bacon, head of looking to share their thoughts and see maybe you have qualified yourself to
managed investments and advisory Asia what the reaction is to verify whether be in a position to give advice, but you
Pacific ex-Japan at Citi Private Bank. they are on the right track or not, she shouldnt forget that the client is the
explained at a Hubbis event in Hong one who has created the wealth.
Meanwhile, Anthonia Hui, chief execu- Kong earlier in 2016.
tive officer AL Wealth Partners, sug- MORE TOWARDS THE LONG TERM
gested that rather than advice, clients Hui also questioned the view that in- Another challenge is the short-term
are often looking for someone to offer vestment professionals are automati- mentality of clients. And in line with this,
an alternative to their view of how their cally best placed to offer advice. If you the industry needs to work on identify-

166 WEALTH MANAGEMENT IN ASIA 2016

 they advise their clients. This approach
demands courage on the part of senior
Clients are looking to management, adds Malik Sarwar, global
share their thoughts and head of sales management, group
see what the reaction is to wealth management at HSBC.
verify whether they are on
the right track or not. Transactional RMs are not likely to be
happy, but that is fine because it is part
of a strategic plan, he said. Those
clients who feel that they were being
ANTHONIA HUI
pushed products will be happier and if
AL Wealth Partners
the institution is getting more new
money coming in than flowing out, the
formula is working.

ing the single most important change

to make relationship managers (RMs)
less focused on pushing products. Transactional RMs are not likely to be happy, but
that is fine because it is part of a strategic plan.
I think we have got to the stage where
we need to start forcing this issue, says
Bacon. To an extent, all industry par-
ticipants have been trying to go down
this route over the last several years
and the results are not compelling in their professional career there, for MORE EDUCATION
terms of how much we have transi- example, rather than focusing on build- Sarwar suggests that the industry has
tioned to this mind-set. ing a book, getting their bonus every become too complicated and that client
year and then moving on, that will po- education is paramount. Each asset
He adds that changing the incentive tentially have a profound effect on how class goes up and down every year, but
structure would be the most useful
change. If you incentivise on short-
term objectives you will always have
the mind-set of short-term product WHAT IS THE MOST IMPORTANT CHANGE TO MAKE THE
push and instant gratification from a
CUSTOMERRM INTERACTION BECOME LESS FOCUSED ON
PRODUCT PUSHING?
revenue stand-point, he explains.

75%
You need to say to people that you are RMs need to beer understand
client goals and risk appete
going to change your scorecard to be
about long-term client satisfaction and Change incenve structures

asset growth not measured on a Diversify the product offering

month-to-month basis, but rather on a 10%

year-to-year basis.

Perhaps the industry should look to tie

down RMs for longer periods? If an RM 15%
joins a firm with the idea that they are
going to spend the next 20 years of Source: Hubbis - Asian Wealth Management Forum 2016, Hong Kong

WEALTH MANAGEMENT IN ASIA 2016 167

FEATURE ARTICLE

portant, but I think we have a sub-set

WHAT WILL FINALLY DRIVE CONVERSATIONS TO BE MORE
NEEDS BASED? of our relationship management uni-
verse that needs to go back to
school, he says.
35% RMs being beer educated

18% to sell these soluons

You have to start with RMs being better
Changing fee models educated to sell the solutions; if they
Beer plaorms and are leading the right sort of strategic
infrastructure
conversation you have a better chance
Client educaon of getting the client to be thinking more
long term and more strategically.
6%
TOWARDS NEEDS-BASED
41%
CONVERSATIONS WITH
CLIENTS
Source: Hubbis - Asian Wealth Management Forum 2016, Hong Kong
The desire to develop more needs-
based solutions for clients in Asia clearly
seems to be a process which will take
time perhaps another five to 10 years
according to some estimates.

[Asset managers] should not focus on short-term

It is happening in the US and Europe,
themes and hype but bring good for clients. but for Asia it is unlikely to be one thing
that drives change.

Instead, says Harmen Overdijk, manag-

ing partner of Caidao Wealth, it will be
if you take a 10-year average return and sation, the opportunity has been lost, a combination of the regulatory envi-
risk, clients can relate to that, he says. adds Bacon. ronment, the willingness of the banks
If you take some of those things and and asset managers to embrace a dif-
explain them to clients without being I dont think it starts with the client ferent approach, and the acceptance
condescending, you are building a re- necessarily. The client is hugely im- among clients.
lationship to make sure that the client
understands how markets behave.

However, to get to the point of creat-

ing better conversations between Transactional RMs are
advisers and clients, again fee models not likely to be happy
need to change. [with changes in incentive
structures], but that is
If they dont, how can senior manage-
fine because it is part of a
ment incentivise or motivate the RM
to have that discussion without having
strategic plan.
the pressure that he needs to do some
sort of transaction? MALIKARONNA
JUAN SARWAR
HSBCWealth Management
RBC

If the client is getting the wrong message

from the RM at the start of the conver-

168 WEALTH MANAGEMENT IN ASIA 2016

WITH SO MUCH VOLATILITY AND UNCERTAINTY - WHAT
SHOULD BE THE MAIN TALKING POINT FOR ADVISERS TO The development of
FOCUS ON TODAY? digital advice platforms

38% When it comes to digital advice

Performance and track record
platforms, there is big potential
Diversifica on benefits for relationship managers to
to the por olio use technology to help them
13% The service levels offered get quicker access to more
by the manager information and more
Ease of explaining the relevant data than if they
13% strategy to clients had to do the research
themselves.

In particular, wealth
36% management institutions are
increasingly focusing on a few
Source: Hubbis - Asian Wealth Management Forum 2016, Hong Kong key areas where digital advice
can help them.

This is aimed at supporting

There also needs to be an education positions within the portfolios, advis- their bankers in having better
process to initiate discussions about ers need to go back to doing proper communication with their
such needs-based solutions. Many portfolio analysis first, position by clients, and giving them more
personalised advice which is
clients, for instance, dont really know position, to be able to deliver very
also more consistent.
what to expect from their portfolios in targeted advice that is, by definition,
terms of investment returns. needs based. Probably the most important
benefit is that they can be a
In practice, in the current environment, Documentation of advice is clearly lot more productive in terms of
advisers need to focus on clients exist- critical, as is the provision of materials being able to speak with more
clients, and more frequently, to
ing portfolios, rather than continue to to help clients fully understand every
give them the right advice at
try to engage clients with new ideas. investment before it is made, and then
the right time.
how that investment is likely to perform
Though these might be part of the under the very broad range of circum-
solution for replacing or reinventing stances through the life of the product.

At the same time, the banks must also

adapt their incentive structures, to think
[Banks] need to ensure longer term, adds Overdijk.
that the interest of the
clients, as well as those of They need to ensure that the interest
the asset managers and of the clients, as well as those of the

themselves, are aligned in asset managers and themselves, are

aligned in this way, he explains.
this way.
That will finally drive the change in
HARMEN OVERDIJK
thinking needed to lead to a new busi-
Caidao Wealth
ness model for wealth management
in Asia.

WEALTH MANAGEMENT IN ASIA 2016 169

EXPERT INSIGHTS

Facilitating a more conducive

investment landscape
Kevin Talbot of Aviva Investors explains how the firms outcome-focused philosophy is
also a positive way to encourage investors to think, in a world where longer term and
needs-based conversations are necessary.

There is no doubt in the minds of many as often as they can. But it would also
industry practitioners that the wealth be good for fund houses like Aviva In-
management market needs to move as vestors. Our multi-strategy funds are
quickly as possible towards being more based on a three-year view, so we are
advice-focused and longer term in looking to the future in terms of where
mind-set. returns are going to come from, ex-
plains Talbot.
I can only hope this happens sooner
rather than later, says Kevin Talbot, This is most likely going to be where
chief executive officer of for Aviva In- there is a mis-pricing in the market
vestors in Asia Pacific, and alsochief areas where he says there is potential,
investment officer for Asia. therefore, to generate excess returns
over the three-year period.
He cites Japan as a positive example,
where some brokers are being encour- As long as clients take the view that
aged to bring to market just one or two they are willing to now look at the
key products a year, rather than per product over this timeframe, then these KEVIN TALBOT
month. We think that type of approach type of funds will have a lot of appeal, Aviva Investors

will gather steam more throughout he explains.

Asia, adds Talbot, a 38-year veteran of
the financial markets. THE RIGHT OUTCOMES
Ever since Euan Munro took the helm
Inevitably, this would be a good thing globally at the firm in January 2014, In line with this, its multi-strategy funds
from a clients perspective, to remove the asset manager has been striving proposition, which is outcome-orient-
the temptation from wealth managers to be a global leader in outcome-fo- ed rather than focused on a benchmark,
and advisers to try to churn portfolios cused solutions. is a cornerstone of the overall strategy.

170 WEALTH MANAGEMENT IN ASIA 2016

Talbot says the firms breadth across Research the firm has done has shown
assets classes via real estate, fixed that over 20 years, the risk premia in-
A range of outcomes at
income, equity, multi-asset and alter- vestors can expect from global equities Aviva Investors
native investments combined with is around 5%. Our rationale, therefore,
more than USD427 billion invested on is to try to achieve this via a portfolio Sustainable income
behalf of its customers, gives it the which does that, but with one-third to low bond yields and high
equity valuations mean
size and scale to successfully see out one-half the volatility of investing in
that outcome-focused
opportunities that will deliver spe- global equities, he explains.
approaches could secure
cific investor outcomes. the regular investment
This is a key selling point, believes income todays investor is
The investment aspirations and con- Talbot, given the combination of looking for.
cerns that the outcomes try to deliver volatile markets over the last 12
Capital growth
on might range from individuals saving months, plus the expectations about
as the risks of a market
for retirement through to the largest continued uncertainty as a result of
correction grow, switching
institutional investors. geo-political events like the US elec- to investments designed
tions, Brexit and others. to provide steady capital
On the Aviva Investors website, appreciation makes sense.
Munros message defines the approach: Among another key value-add of these
Beating inflation
At Aviva Investors we believe it is time strategies for clients is that, unlike the
despite a recent sharp
fall in inflation rates,
unprecedented monetary
stimulus still poses a threat.
Inflation-proofed funds
continue to represent an
I can only hope this [focus on advice and attractive investment.
longer-term investing] happens
Meeting liabilities
sooner rather than later.
the natural extension
of an outcome-oriented
investment approach is to
help institutional investors,
such as pension schemes
and insurance companies,
to think differently. Thats why our dynamic asset allocation approach to meet their long-term
entire organisation is united behind which is dependent on being in the right liabilities.

one common goal: to deliver the spe- sector at the right time we believe
cific investor outcomes that matter that because nobody can predict the
most to todays investor. future, our outcome-orientated solu-
tions approach will produce superior
MEETING INVESTOR GOALS risk-adjusted returns over any type of And for Talbot, whose main role at
The multi-strategy target return funds business cycle, says Talbot. Aviva Investors is externalising the
Talbot markets out of Singapore targets business and its capabilities via third
cash-plus 5%. NEW MIND-SETS parties, he sees a lot of growth poten-
The more that the market in the region tial in the region.
The target income fund, meanwhile, is moves towards more of a longer-term
focused on cash-plus 4%. The aim is to approach to investment portfolios, We manage about USD5 billion in fixed
achieve these returns with significant- then the greater the likelihood that income out of Singapore at the moment,
ly less volatility compared to global the multi-strategy concept will start and I would like to think this can double,
equity markets. to flourish. or more, over the few years, he says.

WEALTH MANAGEMENT IN ASIA 2016 171

EXPERT INSIGHTS

The changing landscape of

overseas property: China factor
The already-large wave of wealthy Chinese buying residential and commercial property
around the world is only expected to gather momentum, despite government measures
to temper demand, says Piers Brunner of Knight Frank.

According to the Knight Frank definition year, Sydney 11% and Melbourne 11%.
of upper middle class, there are 63 Yet this can also have a social impact, he
million Chinese who fit into this catego- adds. For instance, some investors buy
ry. And they are active in the interna- up units and then leave them vacant,
tional real estate market, despite the which has a knock-on effect in terms of
countrys USD50,000 capital control rising rental prices in local areas.
per person per year.
At the same time, some governments
They are motivated to buy offshore by have taken action.
factors such as education, immigration,
diversification of portfolios and curren- For example, the UK, has increased
cies, and lifestyle changes are all key stamp duty; Australia has reviewed
drivers for wealthy Chinese to look foreign investment policy, and immigra-
outside their own country, explains Piers tion barriers are rising.
Brunner, chief executive officer for
Knight Frank in Greater China. GATHERING PACE
According to Brunner, this trend is just PIERS BRUNNER
Knight Frank
Plus, the sales process is very much starting and has a long way to run in
driven by relationships and education. terms of more Chinese money heading
to overseas property markets.
FEELING THE IMPACT
The effect of the mass of money finding In addition to the US and various
its way into certain property markets gateway markets, one of the next waves But he also foresees governments
has led to rapid price movements in he predicts will be investment into trying to defend their markets against
these locations. For example, says secondary cities, such as Manchester such price rises, via measures to at
Brunner, Vancouver was up 24% last in the UK, or Seattle in the US. least try to temper demand.

172 WEALTH MANAGEMENT IN ASIA 2016

WE DONT
JUST OFFER
INVESTMENT
SOLUTIONS,
WE DESIGN
THEM.
At Principal Global Investors, we believe that successful investment solutions are as
unique as the clients we serve. Our multi-boutique asset management structure provides
our clients with a single point of access to custom-designed investment solutions.

Our boutiques have focused expertise in asset allocation, equity, fixed income, and
real estate expertly delivered with conviction, integrity and commitment. This
multi-asset expertise is why sovereign wealth funds, endowments and some of the
worlds largest retirement plans entrust us with managing assets.

The benefits are clear: customized investment solutions and consistent investment
results all through a single, global investment leader.

For more information visit www.principalglobal.com

2015 Principal Financial Services, Inc. | AD2560-02

FIRM PROFILE

How Credit Suisse is leading an

Asian asset management charge
With a mandate to capitalise on the opportunity that Asias wealth demographics
presents, Credit Suisse Asset Management plans to leverage its own private banking
strengths across multiple distribution partners and markets, reveals Michael Levin.

Having a clear business strategy should add from the security selection or from
mean that volatile and unpredictable risk management.
markets are, in fact, an opportunity to
provide more value-added services and There is a shift today, however, with
investment solutions to clients. volatility heightened and lower correla-
tion among securities. In Levins view,
We see a renewed awareness of the therefore, active management through
inherent risk in markets, says Michael fundamental stock and credit selection
Levin, head of asset management for as well as risk management will make
Credit Suisse in Asia Pacific. the difference in the performance real-
ized by investors. This gives us an op-
You dont make double-digit returns portunity to deliver relevant solutions
without potential downside risk or to clients.
volatility, he adds.
LEVERAGING RELATIONSHIPS FOR
This has played out in recent years. NEW GROWTH
From 2009 to 2013, and then again in This plays to what Levin says are key MICHAEL LEVIN
2014, high correlations and strong di- Credit Suisse strengths hedge funds, Credit Suisse

rectional performance for both equities real estate and traditional as well as non-
and fixed income meant that the more traditional fixed income, such as Asian
risk investors took, in general, the more corporate bonds and senior loans. And
money they made. it explains why the firm is increasingly
focused on broadening its offering and Until about two years ago, the firm had
This also meant that passive strategies relationships, both across the region a fairly limited asset management en-
performed well relative to active strat- and via different institutions in the gagement in Asia in terms of selling its
egies, since there was little value to wholesale distribution space. funds through third-party private banks.

174 WEALTH MANAGEMENT IN ASIA 2016

Third-party distribution is one of our established relationship with its own that are suitable for the right clients to
major initiatives for 2016 and going private bank and offer investment solu- deliver an investment solution that
forward, and we have invested a tre- tions, products and services to third creates a good client experience.
mendous amount in terms of commu- parties as well.
nication, relationship building, and A SOUND SET-UP
making our offering relevant for poten- ESSENTIAL SUPPORT Levin certainly doesnt expect growth
tial partners, explains Levin. Inevitably, getting traction with third- in Asia to be plain sailing, especially
party private banks is never easy, espe- given the number of established players
At the same time, the firm benefits from cially in such a competitive landscape. and platforms.
being able to leverage the insights that
it garners from the direct relationships A priority for many of these institutions Yet he is spurred by the fact that, in
it has access to via its own wealth man- is more support, beyond getting the many cases, existing platforms have too
agement offering. product approved. many products.

While Credit Suisses private bank oper- This is especially the case at the outset Many third-party distributors are ra-
ates on an open architecture model, the of the relationship, when they start to tionalising the products available on
advantage mainly comes from the prox- promote a fund. their platform, says Levin.
imity and closer connectivity that the
asset management division has to the At such times, they need a lot of guid- As they shrink the number of counter-
banks relationship managers, as well ance, requiring the fund manager to parties they work with, and the number
as its clients. present to the banks front-line advisers of funds they offer to enable a greater
as well as portfolio managers, and degree of focus on the sales effort, we
We are able to better articulate the answer their questions. have to make a strong and credible case
benefits and risks of various invest- of the value-add of our products and
ments, says Levin. They also need regular communication solutions to justify replacing someone
on an ongoing basis, as part of the on the platform.
And I feel that the more informed the support they might require for their
view that we share with clients, it makes end-investors. As a result, Credit Suisse has been in-
them more durable investors, in order vesting in building up its product spe-
to stay invested through good and bad Another hurdle is the limitation to cialist team as well as its pool of local
periods to get the benefits of a long- having conversations with Asias portfolio managers.
term investment approach, he adds. wealthy about funds, given the ongoing
challenge to raise their penetration as Offering that access in the Asian time
Tied to this is the added bonus of being a percentage of AUM overall. zone is a material differentiator, ex-
able to get closer to clients in terms of plains Levin.
communication during periods of stress. Addressing this, says Levin, requires
conversations to be about investment This combines to form a multi-boutique
We are in the process of determining solutions that match client needs. model which is focused on specialised
a select group of the best distribution investments and relevant expertise,
partners and the products that are most This calls on the client adviser to have sitting within a broader governance
relevant to their clients, says Levin. greater awareness of the set of offerings framework which is the institutional
relevant to the client. infrastructure of Credit Suisse from
But looking at Asia generally, with the operational, legal, compliance and
Singapore becoming a leading wealth So, I view our first job as being educa- regulatory perspectives to navigate
centre globally, plus the influx of capital tion, explains Levin. local geographies.
from Greater China, it is hard to think
of a better opportunity than to take an It is not about selling products; its We think this gives us the best of both
institutional asset manager with an about identifying the right products worlds, he adds.

WEALTH MANAGEMENT IN ASIA 2016 175

EXPERT INSIGHTS

Facing up to the regulatory

reality of transparency
Andri Manatschal of PwC explains the impact of the wake-up call for wealth
management firms and clients in the face of global regulatory measures to try to
ensure transparency.

In the face of changing regulations and agencies which are likely to now be in
the impact on the types of structures communication with each other.
that are now relevant, wealth manage-
ment firms need to figure out how to This has to be cleaned up before the
adapt their offering in line with whats transparency initiatives are enacted in
allowed and what will meet the needs 2017 or 2018, says Manatschal.
of clients.
As a result, he explains, there is a small
Clients today need to think about what and closing window of opportu-
does this transparency mean for me? nity to get this right.
says Andri Manatschal, partner, inter-
national private wealth and entrepre- CLARITY NEEDED FOR HNW
neurs, tax and legal services, at PwC. CLIENTS
The upshot for banks and other wealth
In other words, what do they need to management organisations is they
understand first, and then what do they need to be clear with clients who are
need to do to make sure either them- no doubt receiving a lot of different ANDRI MANATSCHAL
PwC
selves or their organisations can and conflicting information from
control the flow of information? multiple sources.

Control in this case, he says, doesnt The Panama Papers incident, involv-
mean hiding information. ing 11.5 million leaked documents
detailing attorney-client transactions, There is all the more reason, therefore,
Instead, it is about ensuring the true highlighted many examples where for firms to make sure that paperwork
and consistent information goes to various parties have side-stepped the is filed properly, and in a timely manner,
various authorities and government reporting required of them. explains Manatschal. Plus, an indepen-

176 WEALTH MANAGEMENT IN ASIA 2016

dent assessment is needed to see if TEAM EFFORT
structures set up 10, 15 or 20 years PwCs experience with clients around
Avoiding common
ago, for example, are still up-to-date. the world can only be an advantage mistakes
going forward, says Manatschal.
The challenges start, for instance, In general, many clients dont
where clients may have possible tax While Russia is his teams focus for now, seem to understand the full
magnitude of the potential
information that was not documented he sees this shifting to Asia in time as
problems they face.
as there was previously no requirement well. An entrepreneur in Russia is not
to do so in a particular jurisdiction. much different from an entrepreneur One of the common mistakes
in South America or China, he explains. many clients make when thinking
As a result, filing that taxable informa- about their tax and reporting
tion becomes impossible, says They all have the same basic ques- situation relates to mind-set.
Manatschal, because there is no docu- tions and share similar concerns
The first mistake, explains
mentation to back it up. about their families, their personal
Manatschal, is they believe
safety and how their business works nothing has changed, and that
TAKING A COMMON SENSE within the local rules. they can simply act as they did in
APPROACH the past for example, change
Amid all of these new developments, This also serves as a reminder that no their contracts and structures.
Manatschal says it is critical for organ- single person cannot tackle these prob-
But this doesnt work, as
isations to adopt a common-sense lems alone; it takes a team.
substantive changes are often
approach. And this is unlikely to entail required, including to their
any easy way out. Thats simply a reality because it is lifestyle.
impossible to have a one-man show and
The first mistake is to believe that be an expert in everything, he explains. Or, they might have to accept
that they will pay more tax.
nothing has changed that you can
simply continue to do now as we did For example, many of the structures
Another mistake he sees is when
in the past, he says. previously put in place were unregu- people ignore the requirements.
lated, so now need a lot of attention And because they do this, they
By contrast, changes in regulation and given they are coming under the regu- are not dealing with the situation
structuring mean major changes both latory spotlight. in the way they need to.
in terms of the way in which firms do
One of the consequences
business, and how clients approach Taking a practical, pragmatic attitude
for such clients who arent
their portfolios. helps at times like these, adds Manatschal committed to being compliant, is
which means deciding between what they will find it difficult to find a
In short, they need to face up to the to retain and what to either change or reputable service provider willing
new realities of lower returns, higher let go to secure ones future. to work with them.
risk and greater volatility.
His work in Russia has shown him the
Its this type of philosophy which Swit- importance of avoiding complexity.
zerland, where Manatschal is based, Keeping business methods straightfor-
has taken to implementing new ward not only helps to withstand works, they may not face the same
changes. While this has created a stir, change but it is also an advantage when amount of restructuring.
he believes that the ultimate result will it is time to submit paperwork for
be greater longevity and stability for taxes, he explains. But they should, however, still listen
more organisations. And any business to such advice, to keep in mind to avoid
which gets lost in the transition is a Yet he believes that for many clients costly, time-consuming work in the
small price to pay. in Asia, where regulation is still in the future.

WEALTH MANAGEMENT IN ASIA 2016 177

EXPERT INSIGHTS

Plugging a gap for long-term

structuring advice
Nigel Rivers has been inspired by a lack of real advice in navigating todays complex
regulatory, asset structuring and succession planning landscape. He expects his new
firm, Capital Solutions, to fill a hole in finding the right solutions for each client.

Despite the economic challenges and well as quality, the roles they play are
general slowdown globally since 2008, still very transactional. They charge a
Asias wealthy have seen continued fee for a specific service, but have little,
growth in their personal wealth. And in if any, ongoing involvement.
turn, they have increasingly sought
geographic diversification and a wider Meanwhile, insurance companies tend
array of asset classes. to provide a product offering related to
estate planning, mostly still focused on
Yet in the face of these families growing universal life.
needs to manage business and per-
sonal wealth, service providers dont And independent trust companies often
seem to have made as much of this only provide a relatively limited scope
opportunity as they might have given of services.
that they typically operate in silos.
As a result, there is a role for an adviser
For instance, explains Nigel Rivers, who is genuinely independent rather
founder of newly-formed Capital Solu- than product specific, but who also has NIGEL RIVERS
Capital Solutions
tions, private banks and the new breed sufficient knowledge and experience of
of multi-family offices tend to mainly all the tools available to families.
focus on bankable AUM. However, most
family wealth resides in less liquid Families need someone who can
assets, such as the family business or provide advice and guidance on what
in real estate. is best for them and their specific CATERING TO REAL NEEDS
profile, he adds, and can ensure this Rivers has his sights on opportunities
When it comes to tax and legal advisers, is properly implemented in a rational, in both North and South Asia. Out of
while they have increased in number as consistent and independent way. his office in Hong Kong, he will service

178 WEALTH MANAGEMENT IN ASIA 2016

local clients, as well as those from main- and decide who should participate in They need to do this before the patri-
land China and Taiwan. His Singapore management, while at the same time arch or matriarch dies, or are no longer
office expects to work with clients from making sure the family gets a fair dis- able to make rational decisions, or before
countries like the Philippines, Indonesia, tribution of the income the business family members get disgruntled and start
Thailand and Malaysia. makes when the patriarch dies. fighting, he explains.

He is confident that the independence Further, the solution must also ensure NETWORKED MODEL
of his new firm will mean he can help that money is fairly distributed to all A big part of the value that someone
clients to identify those professional family members, regardless of whether like Rivers can provide wealthy families
services firms which are best-of-breed they are in the business or not. You in Asia is to ensure they can access the
technically, and also aligned in the way need to be independent to help in these right professionals. They shouldnt rely
they work, to the specific needs of each cases, says Rivers. It requires knowl- just on their private banker for this, nor
client. Its advisory, first and foremost, edge and experience of these issues, but even the advisers to their business.
he stresses. also the ability to offer different solutions However good their advice has been in
for discussion, so that the family can relation to their specific field, there are
This covers a range of services, includ- decide what suits them best. special dynamics to creating and man-
ing wealth asset structuring, succession aging an infrastructure for legacy
planning, family business governance, Another reason a truly independent ap- wealth. It is important that the family
compliance and reporting, and family proach is essential in todays environment gets the best help, he adds.
office architecture. is tied to the complex compliance regime.
For instance, wealthy families want to Instead, it is vital that families are able
For example, broadly across South-east invest in assets in other geographies, so to look at the big picture and explore
Asia, he sees a big difference in terms must understand how to do this and be their options, and ensure they are acting
of the current wealth owner being older. compliant, given the financial and repu- in the most effective and optimised way.
As a result, they are more likely to be tational consequences otherwise.
at the point where they are transition- While we are small, we have the cred-
ing the ownership of the family business So if a family wants to buy real estate ibility thats required by the people who
and their wealth to the next generation. in the US, for example, which structure recommend us to their clients in the
first place, says Rivers. Clients are able
to tell the difference between someone
who can genuinely offer advice in a
common sense and independent way.
You need to be independent to help in these cases....
It requires knowledge and experience of these issues, but By getting this type of offering right,
also the ability to offer different solutions for discussion. the relationship with the client can also
become a bit stickier. In turn, it will
enable him to charge for his service.
Historically there has been an aversion
in Asia to paying fees for advice. But I
In such a situation, the business might is appropriate, and what reporting they think thats been changing in the last
have been built up 40 years ago or more, must be aware of (in the US and at few years, and I believe people are much
and there are often a number of chil- home), are essential elements to know. more prepared to do this if they see the
dren, some of whom work in the busi- value, he explains.
ness, others dont. Helping families avoid making mistakes
during these and other situations is also The fact that there is growth in family
Some of the common issues that need a critical role for Rivers new firm to take. offices around the region, especially in
to be addressed, therefore, include how These often happen because families China, is proof for Rivers of this change
to transition the business ownership dont consider the options early enough. in mind-set towards advisory.

WEALTH MANAGEMENT IN ASIA 2016 179

EVENT HIGHLIGHTS - INDIAN FAMILY WEALTH FORUM 2016 - APRIL

Managing Indian family

wealth
At our 2nd annual Indian Family Wealth Forum 2016 in Mumbai in early April leading
practitioners from single- and multi-family offices, private banks and professional services
firms explored some of the key themes in this space. This looked at how to give advice
on the critical issues they face and need to plan for when it comes to their businesses,
personal portfolios, next-generation planning, tax affairs, legacy matters and more.

Wealth managers face a relatively un- In determining how to reach these

tapped market in India when looking to wealthy families, understanding their
Thank you to our sponsors
woo families, as wealthy clients looking financial situation and concerns has
to increasingly separate their personal become an integral part of the sales IIFL Private Wealth
and business wealth. process today. This gives them insight Management
into what to offer to these clients, and Jersey Finance
Motilal Oswal
But this requires a certain skill-set to how to offer it.
Heritage Trust Group
be successful in managing family dy-
Pafilia
namics. There is no one-size-fits-all solution to BVI House Asia
help family businesses transition from Iyer Practice Advisers
One thing that is clear is that products one generation to the next. But first
alone will not get Indian wealth manag- identifying the needs and goals of each
ers far enough with wealthy individu- promoter and the wider family will
als and families in India who have all ensure the right structure for a smooth Anyone advising wealthy Indian busi-
the assets and the disposable income succession plan. ness-owners also need to understand
to hire the best advisers from around how to guide their clients on how best
the world. There are various dynamics that result to invest their personal wealth for the
in conflicts and challenges in creating long-run.
This means advisers in India are forced a smooth succession for family busi-
to look for new ways to distinguish nesses. The relationship between the For example, there is a mind-set shift
themselves from others and to add promoter and the next generations is under way in India. Increasingly, wealthy
value to their clients. chief among them. families and individuals are becoming
more risk-taking and willing to embrace
business ideas which they wouldnt have
less than a decade ago.

HNW individuals and families in India

are also moving towards sustainable
philanthropy, and want to give in a way
that makes significant social impact.

This also means that they favour organ-

isations that use technology for
maximum impact.

180 WEALTH MANAGEMENT IN ASIA 2016

Abhisek Puglia Aditi Shrivastava Ajay Agashe Angelo Venardos Anupam Guha
IIFL Private Wealth Management Intellecap EY Heritage Trust Group ICICI Securities

Arpita Vinay Benaifer Malandkar Dhruv Mehta Elise Donovan Gaurav Arora
Centrum Wealth Management Raay Global Investments FIFA BVI House Asia Religare Private Wealth

Gautami Gavankar Kanwar Vivek Shanker Iyer Manish Singla Munish Randev
Kotak Mahindra Yes Bank Iyer Practice Advisers Client Associates Waterfield Advisors

Nipun Mehta Nishant Agarwal Poonam Mirchandani Sharad Mittal Himadri Chatterjee
BlueOcean Capital Advisors ASK Wealth Advisors Barclays Motilal Oswal Financial Services IIFL Private Wealth Management

Sunil Sharma Tarun Birani Vinay Bajpai Shweta Shah Aashish Somaiyaa
Sanctum Wealth Management TBNG Capital Advisors Deutsche Bank Edelweiss Motilal Oswal Asset Management

WEALTH MANAGEMENT IN ASIA 2016 181

FIRM PROFILE

Shedding light on the anatomy

of a family business
Running a family business successfully is not just about lineage, creating a need
for a range of services that Heritage Trust Group is offering to fill some potentially
problematic gaps.

Running a family business is highly- ping nature of business and personal

complex, challenging and emotional. wealth, there is plenty to be done to
Getting it right, therefore, depends on align affairs for the future.
a host of factors that most entrepre-
neurs either dont have time or the ex- In Diederens opinion, family offices are
perience to focus on. best equipped to survive if they have a
strong foundation, starting with a shared
This is the opportunity which Heritage understanding about why the family is
Trust Groups new family office ser- in business together in the first place.
vices unit has identified. It is an add-on
to the corporate and fiduciary services This is often under-estimated, he says.
offering it provides across Asia and the Advisers such as lawyers, accountants
BVI, including incorporation, business and even philanthropy specialists ap-
services, estate structuring and suc- proach the family from their specific,
cession planning. expert angle, but tend to forget that the
family is intra-dependent.
Basically, we want to look very holisti- HANS DIEDEREN
cally into business families, says Hans A strong foundation, however, pre- Heritage Trust Group

Diederen, head of this new division at pares the family for when its time for
Heritage, to increase the success rate the baton to be passed to younger
of business continuity and, at the same generations. Succession is regarded
time, family harmony. as an event, but this only happens once
in a generation, explains Diederen. Given that family values can quickly
A SOLID STARTING POINT Its the process and the timely plan- become intertwined with corporate
In line with the dynamics of Asian family ning of the preparation of this process ones, such planning must take both sides
businesses, coupled with the overlap- that is most crucial. into account to succeed.

182 WEALTH MANAGEMENT IN ASIA 2016

FIRM PROFILE

A GAP TO FILL them to probe their parents with the

Heritages independent role puts the right questions to address the succes-
firm in a good position to do this, be- sion planning challenges. This is an issue
lieves Diederen, as this means it gets to he commonly refers to as the elephant
hear what maybe bankers and financial in the room.
advisers dont.
But not being prepared can have sig-
This is especially important amid the nificant consequences. Not having a
particular challenge that families face basic will, let alone a trust structure
today in light of the characteristics of in place, creates huge challenges
the millennials generation. which families probably wont find
until they go to the bank, and the bank
While every generation differs from the says that everything has been frozen,
one before it, millennials have grown up explains Venardos.
in a more globalised environment with
rapid technological change. THE FAMILY NICHE
ANGELO VENARDOS
For Heritage, family office services rep-
Heritage Trust Group
This generation has studied abroad and resent a significant opportunity but
worked around the world, so they are one which will take time to realise as
developing different values, and this can the firm looks to carve out this niche.

Yet in dealing with people who have

worked hard to create a successful
business and at the same time bring up
their family, agreeing on a set of con- Its the process and the timely planning of the
sistent values is easier said than done, preparation of this process that is most crucial.
especially with generational differ-
ences to consider.

Angelo Venardos, chief executive officer

of Heritage, recalls a recent example of
this in Indonesia. We met with three alienate them a bit more from the pa- This is due, in part, to the fact that dif-
generations of the family over five hours, triarchs and matriarchs than has hap- ferent countries are at different stages
discussing all types of matters. At the pened in the past, explains Venardos. of development and awareness in terms
end of these conversations, one of the of the need for more formality around
brothers quietly said that he didnt agree This is one of the ways he and Die- managing the family business.
with the current shareholding. deren are looking to help: offering
advice for a fee, in addition to other But it is an invaluable component of
This type of problem needs to be figured services and solutions once the needs the advice the firm gives overall. It
out earlier, so that all parties involved have been identified. accelerates the discussion within the
can seek the guidance they need. families to do something to review
Diederens approach is to tailor the what has been in place and, by bringing
This really requires a third party with message, depending on which genera- the generations closer together, it
which the family has a relationship to tion he is speaking with. I think my forces also the patriarch to not leave
sit down patiently and work it through major task with the second generation the next generation with any legacy
with them, says Venardos. [of millennials] is to guide and prepare issues, explains Diederen.

WEALTH MANAGEMENT IN ASIA 2016 183

EXPERT INSIGHTS

Greater transparency raises

privacy and advice red flags
The aftermath of many data leaks of greater tax compliance around the world also
threatens the privacy and confidentiality of the majority of individuals who legitimately
use offshore structures, explains Stephanie Jarrett of Baker & McKenzie.

As politicians scramble to further On the flipside, however, regulation has

tighten the noose around tax evasion arguably gone a step too far.
and money laundering through far-
reaching measures like the Common There are legitimate reasons for
Reporting Standard (CRS), Automatic wanting confidentiality of information,
Exchange of Information (AEOI) and adds Jarrett. Some of the transparency
FATCA, this sudden urgency to enforce measures are causing considerable
compliance, although desirable, may physical danger as well as business
have gone too far. disadvantages to many people.

And, in their zest to ensure transpar- KEEPING INFORMATION IN THE

ency, lawmakers may be ignoring the RIGHT HANDS
bad side of transparency; or information A real threat that has not been the
going astray. centre of much attention to date, is the
fact that information could be passed
I think going forward there is going to to people who use it for personal gain
be a lot of transparency because of CRS or other questionable purposes. STEPHANIE JARRETT

and FATCA, but this has a good and a Baker & McKenzie

bad side, says Baker & McKenzies For example, politicians might mis-use
Stephanie Jarrett, a Geneva-based data for arm-twisting; criminals, on the
partner who specialises in trusts, estate other hand, might be able to access in-
and international tax planning. formation and use it to threaten some-
ones physical safety. Further, leakage of At the same time, Jarrett says the prime
The positive aspect is that many people sensitive materials to business com- concern of many wealthy clients, regard-
now realise they must pay their taxes. petitors could also be damaging. less of their geography, is the security

184 WEALTH MANAGEMENT IN ASIA 2016

of their assets because of geo-political Otherwise, she explains, clients are offshore structures, she cautions about
uncertainty globally. more likely to start to face litigation or the need for them to be discerning.
tax issues with structures because of
As a result, while sharing information greater transparency. I think some of the offshore centres,
with tax authorities is clearly justifiable, like Belize, are going to face a hard time
there is a pressing need to ensure it is THE RIGHT ADVICE going forward. They risk being shut out
kept confidential, and used solely for The consequences of these regulatory of the banking system if they dont play
tax compliance. initiatives are increasingly impacting the [transparency] game properly.
the nature of wealth management,
The other major concern for clients, which is slated to undergo a significant MAKING WISE CHOICES
adds Jarrett, is preserving their wealth shift going forward. Consequently, there is a need to choose
and passing it on to the next generation. the offshore destination carefully.
More specifically, says Jarrett, they will
This, too, is becoming more and more limit the role for each type of adviser This must be based on the tax regime
of a challenge given the transparency manager - such as private banks, family a client lives under, since this will dictate
which is now required of various struc- offices, independent asset managers whether or not an offshore company is
tures, she explains. (IAMs) and lawyers. likely to be a good idea from a tax point
of view.

For a resident in Hong Kong or Singa-

pore, for instance, Jarrett says it makes
sense for them to hold assets outside
While sharing information with tax authorities is clearly of those jurisdictions in an offshore
justifiable, there is a pressing need to ensure it is kept company; those markets do not con-
confidential, and used solely for tax compliance. sider offshore accounts illegal.

At the same time, it is important not

to tar everybody with the same
brush, since this might lead to some
politicians and others in power to take
Consider the following: laws today often For example, she adds, the increasing hurried decisions.
allow a claim on family assets to two risk of litigation has already led to many
people living together for a certain private banks shying away from the The solution, therefore, lies in looking for
amount of time without them being concept of actually giving advice. a middle ground, says Jarrett, rather than
married. crafting rash laws that can lead to unfore-
Another big emerging challenge for seen or undesirable consequences.
Other areas of complexity could also banks, trust companies and IAMs alike,
stem from multiple marriages in a is how to manage the presentation of A middle road regarding the ownership
number of different jurisdictions, and mountains of documentation to clients. of private companies, regarding to
due to any children from those mar- whom information could be transferred
riages, including issues of illegitimate, At the end of the day, however, there and what safeguards one could have,
adopted and step-children. is no under-estimating the importance needs to be found, she explains.
of (re)establishing a close working rela-
More attention needs to be paid [by tionship with clients, she advises. This can be done, she adds, if the
wealth managers] to the overall plan- reasons for using so-called offshore
ning for the preservation of wealth, While private bankers typically know companies and other structures are
explains Jarrett. their clients well, when it comes to articulated more clearly.

WEALTH MANAGEMENT IN ASIA 2016 185

FEATURE ARTICLE

Making the most of

Chinese wealth
Estate and inheritance taxes are among the various the risks for Chinese HNW and
UHNW clients. Increasingly, they are looking for new options, especially offshore ones,
to diversify, protect and grow their wealth in todays complex world. The potential to
offer them advice in this presents significant opportunities for Asias wealth managers.

Yet as the China market continues to

open and the wealthy become more
[Chinas wealthy] are turning sophisticated, they are increasingly
to wealth management looking to diversify their holdings
specialists, both offshore outside of the Mainland.
and onshore, to help them
achieve their objectives. They also see overseas investments as
a way to achieve higher returns through
access to a broader selection of prod-
ucts and services than is available do-
JING ZHANG BROGLE
mestically, explains Jing Zhang Brogle,
Edmond de Rothschild
chief executive officer of Edmond de
Rothschilds Hong Kong branch. So
they are turning to wealth management
specialists, both offshore and onshore,
to help them achieve their objectives.
Statistics show that there are two edge of managing risks among many of
primary needs for Chinas HNW and these individuals. To be profitable in servicing these in-
UHNW populations. The first is to di- dividuals, therefore, Amanda Chen,
versify and protect the wealth in an Specific issues that some clients might deputy head of wealth management
increasingly-complex world; the second face, therefore, include the depreciation for Nomura in Asia ex-Japan, suggests
is to have proper succession planning of RMB against the US dollar, invest- that it is essential to provide Chinese
for the family businesses and wealth. ment in unfamiliar markets (overseas clients with a full suite of wealth man-
real estate and financial products), and agement services including estate
This is highlighted by the general a lack understanding the implications of in- and wealth planning, corporate finance
of diversification of assets and knowl- heritance taxes in mature markets. and real estate.

186 WEALTH MANAGEMENT IN ASIA 2016

This is becoming more of a reality than
in the past.
It is essential to provide
While Chinas wealthy prefer to take a Chinese clients with a full
predominantly active role in their in- suite of wealth management
vestments, there are signs that more of services including estate and
them are entrusting a larger share of wealth planning, corporate
their wealth to private banks or inde-
finance and real estate.
pendent asset managers.

AMANDA CHEN
At the same time, HNW individuals in
Nomura
China tend to prefer to hold less in cash
and deposits, and it creates a lot of op-
portunities for wealth managers who
offer professional advisory and invest-
ment services.
quality of their lifestyle, now they are from the current anti-corruption cam-
Clients in China have become much more focused on the preservation and paign, and potential future PRC estate/
more receptive to direct investment transfer of wealth to the next genera- gift tax will potentially subject their
opportunities and advice on alternative, tion, adds Brogle. wealth at huge risk, says Lee.
non-traditional investments such as
hedge funds and private equity, ex- MORE STRUCTURING NEEDED In China, most of our clients understand
plains Brogle. There are various drivers for Chinese the use of a will, but utilisation of other
clients to engage wealth structuring. planning ideas such as pre-nuptial agree-
Perhaps most exciting for long-term ments or trusts or foundations are still
opportunities is the fact that in the According to Kevin Lee, partner at in the relatively developmental stage,
recent volatile environment, demand Zhong Lun Law Firm, there are also he explains. We have been advising
by HNW Chinese for financial planning various concerns for Chinese HNW HNW clients on using such estate plan-
and wealth structuring expertise has clients to address. Key among them is ning tools, but adapted to the PRC
increased. Whereas in the past, their how to protect wealth. Constantly- context to the extent possible.
main investment objectives were to changing policies, uncertainty about the
grow their wealth and improve the future of the country, collateral damage Another risk is family business succes-
sion. We see examples of children of
HNW individuals who are not keen to
take on responsibilities of family busi-
nesses, adds Lee. For family gover-
I dont see demand for wealth nance, some firms have found that
planning diminishing instead, advising PRC clients on creating family

sophistication is evolving charters and setting up family councils

has been well-received.
towards structures which are
more secure and transparent. Philanthropy is also a concept which is
gaining some traction among PRC
clients, although domestc laws are not
MARTIN CRAWFORD well developed yet in this respect.
Vistra Group
When it comes to trusts, most of the
planning done to date has been based

WEALTH MANAGEMENT IN ASIA 2016 187

FEATURE ARTICLE

on offshore models where offshore dont see demand for wealth planning
trusts own offshore assets. diminishing instead, sophistication is Changing tax laws
evolving towards structures which are
According to Martin Crawford, chief more secure and transparent. One of the biggest issues the
executive officer of Vistra Group, tax is wealth management industry is
likely to be dealing with over the
often around 25% of the driver for a lot To play a role as more Chinese wealth
next couple of years stems from
of the cross-border structuring out of moves offshore in search of protection
the changing tax laws in China.
China. The rest is done for the pur- and other wealth solutions, Roger Steel,
poses of asset planning, family succes- president, new markets and business With the new individual
sion and diversification of wealth. development for Sun Life Financial in income tax law, it will affect all
Asia, says there are some key ways to the offshore structuring that
clients in China have done to
Clients accept they will pay certain do this. Product not an issue; as always,
date. Further, CRS means that
types of taxes at some point, he ex- its first and foremost about distribu-
governments from 100 countries
plains. They are just trying to minimise tion, he explains. will be reporting to the Chinese
it legally and use structures which are tax authorities the details about
more dependable. In addition, firms need to understand all the bank and other accounts
the onshore market, which is shifting that Chinese residents have in
those countries.
Domestic PRC trusts are not being used to protection, and be able to manage
in any material way for such planning within the changing regulatory and
This will lead to a new era of
yet, says Lee, and clients still face dif- enforcement environments. Regulation tax audits and investigations,
ficulties to inject onshore assets into is driven by macro-economic consider- requiring compliance with
offshore trusts. ations, not just customer protection. the laws, predicts Michael
Olesnicky, partner and senior
adviser at KPMG.
But subject to currency controls, there GATEWAY
should be growth in the offshore trust Depending on who you talk to will lead
As a result, for advisers with
market at least in the near term pending to different answers to the question of Mainland China-based clients,
the anticipated amendment of the In- where the gateway of the future will he says it is time to look at their
dividual income tax laws and possible be in access to Chinas wealth. tax affairs to ensure they will
introduction of gift/inheritance tax. remain compliant and survive
detection going forward.
Broadly, there is a swing among wealthy
Crawford is also optimistic for the op- Chinese individuals from offshore to
portunity to service Chinas wealthy. I mid-shore jurisdictions, such as Singa-

pore and Hong Kong.They are looking

for structures which stand the test of
time, explains Crawford.
Product not an issue;
as always, its first According to reports, Chinas HNW
growth has resulted in a 47% increase
and foremost about
in the amount of money flowing into
distribution.
Hong Kong between 2012 and 2014.

Similarly, Singapore saw a 32% increase.

ROGER STEEL For the time being, it seems, Hong Kong

Sun Life Financial is certain to continue to be a key centre
for Chinese offshore wealth, alongside
Shanghais growing importance.

188 WEALTH MANAGEMENT IN ASIA 2016

Yet Singapore also has an increasingly
role, given that it has become an im-
[Chinese clients] may
portant, well-regulated and reputable
wealth hub internationally. be surprised that their
offshore assets will be
Though not as convenient a base as exposed to the government
Hong Kong, Singapore remains an at- authorities in China or
tractive market for Chinese investors adopted new countries.
for its reputation as a stable, peaceful
and affluent country with a vibrant
KEVIN LEE
economy and strong banking sector,
Zhong Lun Law Firm
says Jason Lai, founder and chief ex-
ecutive officer, Thirdrock Group.

EDUCATED AND PREPARED

There are various ways that the wealth
management industry as a whole can
make the most of the offshoring of going to be CRS, other exchange of holdings in an increasingly transparent
Chinese wealth. information initiatives and money and compliance-driven world.
laundering issues. And for Chinese
For many UHNW clients from China, clients, while they like the idea of At the same time, however, advisers
for instance, they need to be educated setting up trusts, many dont really need to be cautious about exposing
on how wealth should be managed understand that this involves the themselves to offences or charges
overseas, properly and professionally, transfer of control to their trustees. under relevant CRS or other regimes
with optimal results. They also need by taking too proactive a role in struc-
to be educated to accept not-too-ag- CRS is going to have an impact turing advice.
gressive returns relative to the yields because it seems that most Chinese
they may otherwise receive from the clients are setting up structures which More broadly, insurance, pensions and
domestic China market, says Lee. are either not compliant with Chinese other more sophisticated planning tech-
tax laws, or will not be compliant as niques will become increasingly impor-
Further, and more broadly, many clients the tax and reporting laws inevitably tant and plain vanilla offshore structures
from China are not fully aware of the change, says Howard Bilton, chairman will be useless.
implications of FATCA and the Common of Sovereign Group.
Reporting Standard (CRS). However, To be well-positioned in this way, there
some of them already feel the inconve- He sees many wealthy Chinese still are several things that insurers can do
nience of dealing with banks where their seemingly working on the assumption to capture and be successful in the
foreign nationalities might have an that money held offshore in an offshore Chinese market.
impact such as in cases where they structure can be hidden from the tax
have become US citizens or a perma- authorities. It is going to be increas- According to Steel, these include:
nent resident. ingly important that any structure set getting an onshore licence; keeping up
up by a Chinese client (or any client with the pace of digital innovation and
They may be surprised that their off- anywhere in the world) works because online sales; being creative when it
shore assets will be exposed to the it is legal and compliant rather than comes to social media promotions, such
government authorities in China or because relevant tax authorities do not as on WeChat; selling through banks
adopted new countries, says Lee. find out that it exists, he says. and their brokers, and looking at new
and alternative distribution channels,
Many practitioners agree that the Such clients need professional advice for example real estate buyers or soccer
most pressing issue going forward is on how to properly structure wealth club members.

WEALTH MANAGEMENT IN ASIA 2016 189

FIRM PROFILE

A generational mind-set to
servicing family wealth
Planning for the future requires a sense of the past. Now, more than ever, it also needs
expert knowledge of the constantly-changing regulations. This is the approach that
Shanker Iyer takes in spearheading Iyer Practice Advisers.

There has always been a tension his two sons, Sunil and Sanjay, to see
between tradition and innovation. The things in a similar way.
challenge for advisory firms today is
understanding how to deliver a service EVOLVING PROPOSITION
that can respond to what clients want Shanker initially qualified as a Chartered
and what regulators demand. Accountant in London and was a partner
of a leading accounting firm in the UK
In the past few years, increasing atten- for more than 10 years before he came
tion has been paid to what tax really is, to Singapore.
and how it should be paid and where.
The accountancy background is impor-
But tax should not be the sole or even tant because it provides the fundamen-
primary factor driving family wealth tal tools for any business model.
structures. Advisers should first under-
stand the specific circumstances of the I came to Singapore in the 1980s with
family, and how to effectively cater for my UK firm, says Shanker, and I went
both the current and future generations. back to the UK in 1992. But then the UK SHANKER IYER
Only once this is determined, can the economy wasnt very good at that time Iyer Practice Advisers

structure (and the tax, regulatory and and so we came back to Singapore and
fiduciary aspects) be effectively planned. I set up my own practice in 1993.

Shanker Iyer is in a unique position to Initially he ran a traditional accounting

appreciate the past and invest in the practice. We are chartered accountants But accounting and audit were not the
future. He is the Founder and Chairman by qualification and thats been my ex- ways into the future. The audit business
of Iyer Practice Advisers, a specialist perience, so it continued to be the case in Singapore was expected to decline
advisory firm, and has been grooming for the initial period. because of the impending law abolishing

190 WEALTH MANAGEMENT IN ASIA 2016

FIRM PROFILE

The trust companies tend to do fidu- The three most impactful developments
ciary work and most of the accounting in the tax world where advisers must be
firms are largely audit focused, he adds. up-to-date on their knowledge and
analysis are: Base Erosion and Profit
FINDING A NICHE Shifting (BEPS an OECD project), a
That evolution has given Iyer Practice new view of defining where sales and
Advisers the unusual position that it profits and tax liabilities are declared;
now holds with fruitful relationships FATCA and the Common Reporting
across financial services, including in Standard (CRS), the use of automatic
the wealth management industry. exchange of tax information(AEOI).

We became something in the middle, Sanjay Iyer, who leads the firms tax
explains Shanker. practice, takes a common sense view of
all these matters.
Accounting firms dont seem to regard
us a competitor, and, in fact, a number He thinks BEPS will affect business, but
SUNIL IYER
of them consult us on specialist tax less with regards to private clients. He
Iyer Practice Advisers
matters which are quite complex and is also sanguine about FATCA. It primar-
beyond their normal experience. ily affects those involved with the US.
CRS, meanwhile, is different and will be
The same business model applies to much more widespread, he explains,
trust companies. They play a more because it affects everybody. Whether
audit for many companies in the future, volume game and we are more advisory; all countries that have signed up to CRS
and so we decided to exit that business. thats the way we focus the firm. will implement it at the same time will
be interesting to see.
There was personal and professional That focus is emphatically towards
logic in deciding to move into advisory. clients. Many of Iyer Practice Advisers KEEPING IT SIMPLE
clients are in the private client space. In general, Iyer Practice Advisers prefers
We felt professionally that we pre- They may come through corporate to stick to basics.
ferred to do advisory work, he explains. structures but, behind these companies,
Audit was becoming over regulated and even public listed companies, there are Businessmen can make multi-million
stopped us providing many other ser- usually families, entrepreneurs and high dollar decisions very quickly, but when
vices to clients which other-wise we net worth individuals who want a more it comes to their personal lives (family
wanted to. personalised service. succession planning, wealth planning)
they often take a long time to decide
That was the game changer. We divested They are very demanding in the quality because they must think of all the things
our audit business at that time and we of work and depth of knowledge that that can go wrong and which often do.
switched our focus to the advisory busi- they require from us, says Sunil Iyer,
ness, says Shanker. We suddenly became director, who oversees private client It can sound like a clich , but I strong-
a very different firm in town. services and regulatory compliance. ly feel there is no one formula that works
for everybody, says Shanker.
Today, Iyer Practice Advisers is quite NEW LANDSCAPE
unlike any other accounting practice, Knowledge and understanding of trends Each family is different, the way they
and also quite unlike any traditional are becoming ever-more important in do things is different, and the solutions
trust company which typically does not advisory work. With the changing land- are different, so we try case-by-case to
give advice (particularly with regards scape, good advice is imperative to work with them and give our inputs to
to tax). ensure clients keep up. their decisions. The final decision is

WEALTH MANAGEMENT IN ASIA 2016 191

FIRM PROFILE

always reflective of the clients per- There is still more to do and to contem-
sonal preference. plate. For example, one recent develop-
ment at the firm was its relationship
Inevitably, he and his family have a big with WTS, the fifth largest German tax
influence on the culture of Iyer Practice consulting firm after the big four, with
Advisers. I guess being a family busi- an international network. The upshot
ness we dont have the type of turnover was dealing with some high-level tax
at the senior level that other firms might issues of German multi-nationals that
have, he says. are doing business in Asia, in turn
helping Shanker and his team to grow
A four-generation family of chartered the firm because it had to bring in ex-
accountants does have a certain flavour. pertise that was in need.

There are firms who have much more The relationship was a start but it also
resources than we would ever have, so gave a further impetus to the culture

SANJAY IYER
Iyer Practice Advisers

We want to be focused on our strategy.

So we dont see much change. The type of
work could change, it might become Fiscal Association, and Chairman of the
more complex, but I think the better we get Tax Policy Committee of the Singapore
the better we can advise our clients. International Chamber of Commerce.

This doesnt equate to cronyism. I do

not mean that they do favours to us,
but the fact is we know how the system
works and we know the people person-
we have to know our place in the market and growth of the business, he explains. ally, he explains.
and not try and compete head-on with It actually forced us to build up our
the big players - it doesnt make sense. team (for instance in transfer pricing) We think people get a certain comfort
So we have a niche play and we are very much sooner than we ever would have when they come to us because we are
happy in it. done. So we are happy about that. not new in town and experimenting.
We are established here.
NO STANDING STILL At the same time, Shanker is a strong
Iyer Practice Advisers now has offices believer in tradition as well as in rela- Concludes Shanker: We want to be
in Singapore, where it has close to 70 tionships. focused on our strategy. So we dont
staff, and in Hong Kong, with around see much change. The type of work
15 employees. But Shanker is still He has been President of the British could change, it might become more
looking for growth. Chamber of Commerce and the Euro- complex, but I think the better we get
pean Chamber of Commerce in Singa- the better we can advise our clients.
Areas where we currently are seeing pore as well as Chairman of Singapore
most demand and find the most inter- the International Chamber of Com- Iyer Practice Advisers has clearly evolved
esting now are international tax and merce. He is currently Chairman of the into an advisory firm in response to client
regulatory compliance services. Singapore branch of the International needs and changing times.

192 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

Knocking on Asias onshore

opportunity
Emerging trends in Asia in terms of how and where clients have their wealth managed,
give private banks with the resources and expertise an enticing source of work onshore,
especially in China, says Jonathan Hubbard of UBS Wealth Management.

One of the biggest opportunities that CHINA FOCUS

UBS Wealth Management foresees for China clearly presents the biggest
its business in Asia over the next 15 to appeal, particularly as it emerges as a
20 years is providing onshore wealth market for such onshore services. And
planning services for domestic clients this trend is only expected to continue
for certain markets. in line with the changing dynamics of
the economy over the next 10 years.
As in the past, an increasing amount of
wealth continues to be created at home For example, it will start depending
rather than overseas. more on domestic consumption rather
than exports, and a lot of wealth will
The vast majority of the growth of increasingly be generated from within.
wealth [in Asia] is going to be onshore,
predicts Jonathan Hubbard, head of The discussion Hubbard is engaging in
wealth planning for UBS Wealth Man- at the moment to gauge the potential in
agement in Asia Pacific. China is about what can really be done
JONATHAN HUBBARD
today around structures such as a family
UBS Wealth Management
International banks are unlikely to get trusts and insurance for succession plan-
too close to the entrepreneurs busi- ning onshore.
nesses, due to the individuals ties to
their commercial banking provider. There has been a developing theme
towards this over the last two or three
However, the need for services like suc- years, as some of the Chinese trust This highlights the possibility of an estate
cession planning, lifecycle planning and companies move away from just being planning business developing in China,
more is a big enough draw card. deposit takers, he adds. explains Hubbard.

WEALTH MANAGEMENT IN ASIA 2016 193

FIRM PROFILE

Sun Life embarks on path to tap

the wealth pipeline
With a new chief executive in Hong Kong, Sun Life finds itself at the start of a
strategic journey which will reposition the firm to be able to deliver needs-based,
holistic financial planning.

After 124 years established itself as one more from their wealth managers, insur-
of the leading players in Hong Kongs ance companies have been rethinking
insurance and MPF markets, Sun Life their business.
Financial is ready to embark on a new
journey again. It is more than evident than ever to
Dehni that clients no longer want to deal
Assuming its new chief executive officer, with multiple advisers.
Jason Dehni, can achieve all the goals
he has set out, he will have transformed Our clients want one relationship
the business to deliver a broader prop- manager, not one for their investment,
osition with a finger in every slice of one for their pension and another for
the wealth management pie. insurance, he emphasises. The writing
is on the wall in Hong Kong.
Further, Sun Life as an organisation
wants to be best-placed to work with a At the same time, Asia is now a more
wider variety of organisations going important region for Sun Lifes global
forward, given that the traditional business than ever before. JASON DEHNI
agency model looks to have run its Sun Life Hong Kong

course as the distribution channel of So the push to grow market share in the
choice in Hong Kong. region, and match the scale of its busi-
ness globally, gives the new strategic
The vision reflects an evolution under direction further fuel.
way across the region, explains Dehni, In his role as chief marketing and distri-
who joined the firm from Manulife in REDEFINING THE OFFERING bution officer for Manulife in Asia, he
May 2016. With the next generation of Dehni is no stranger to the kind of stra- helped transform the end-to-end advi-
young and savvy clients demanding tegic shift he envisages in his new role. sory sales model, which included a com-

194 WEALTH MANAGEMENT IN ASIA 2016

plete redesign of its recruiting, training, versal life proposition, which is set to based on trust, advice and delivery of
technology and product offering plat- make its debut in the third quarter. service, he explains.
form, including wealth management.
It will be our signature product for His commitment to this involves taking
He now plans to lean on this experience HNWs, explains Dehni. Clients have on board as much client feedback as he
to repeat that with Sun Life. a choice, but when they come to a Sun can get, in order to continually ensure
Life adviser, we are going to offer them he and his staff provide the desired
In line with this, his goal is to stretch the solutions that we believe meet their consistent experience.
boundaries of the firms offerings to financial needs.
complement its life insurance and pension This will also involve reviewing internal
services with a spectrum of wealth plan- But the overall goal goes beyond just processes and policies to identify areas
ning and investment expertise. the products individually; it requires for improvement.
integration so that each solution creates
He can then say with conviction that the complementary value to a clients However, the biggest challenge he faces
firm can meet the different financial and overall financial plan. is how to get Asian clients to look
protection needs during the different beyond their short-term, tactical ap-
stages of the clients lives, under one Geographically, Dehnis immediate proach towards focusing on longer-term
roof. It is part of our DNA, he adds. focus is to serve the needs of people goals such as retirement planning and
across various income spectrums in saving for the future.
STEP-BY-STEP
These changes, though, are not going to
come about quickly.

This requires a certain mind-set, com-

bined with a lot of training, support,
Our clients want one relationship manager, not one for
technology, back office infrastructure,
their investment, one for their pension and another for
adding mutual funds to our own plat-
form, governance and, obviously, licens-
insurance. The writing is on the wall in Hong Kong.
ing, explains Dehni. So it is a journey
we will be taking over the years to come.

Top of his agenda to move up the ladder

as a fuller-service wealth manager is to
drive needs-based financial planning as Hong Kong. Saying this, China will obvi- But he doesnt subscribe to the notion
Sun Lifes core offering. ously remain important as the firm of expecting clients to change overnight,
continues to focus on the needs of PRC without helping them to change.
The firms asset management division clients in Hong Kong.
plays an important role too enabling Instead, Sun Life plans to leverage tech-
it to offer a multi-manager platform. QUALITY NOT QUANTITY nology to give investors a glimpse into
This is a point of differentiation for us, Yet, while products are inevitably im- the future.
says Dehni. Our clients value it, the portant, they offer relatively limited
agents value it, and the market values scope for differentiation. This mind-set can be changed through
it. We want to extend this platform to education and by using technology in a
our agents and clients. Instead, Dehni is looking to find a niche way that it can help them envision their
for the wealth management offering by life after retirement, says Dehni.
And for the HNW population, Sun Life focusing on the quality of advice. And Engaging clients through such tools will
is currently developing a premium uni- he wants to create a value proposition encourage them to continue saving.

WEALTH MANAGEMENT IN ASIA 2016 195

EXPERT INSIGHTS

Broadening the insurance focus

on Hong Kongs wealthy
Generali is bringing a range of new life insurance solutions to meet growing appetite
among the citys HNW and affluent populations, explains Thomas Young.

The increasing awareness and open- The product itself has been around in
ness among affluent HNW individuals Asia for a long time in Hong Kong, and
in Hong Kong about the need for pro- has been offered to date by insurance
tection in various formats is creating companies such as AIA, Transamerica
new opportunities for some of the more Life Bermuda, Sun Life Financial,
proactive life insurers. Manulife, HSBC, Met Life, AXA (more
recently) and others. For Generali,
Generali counts itself among them. meanwhile, the focus is to build on
relationships with brokers.
It has set up a new life insurance busi-
ness in the market to target these COMPETING AT THE TOP END
customers with a product range that According to Young, there is a lot more
includes a range of traditional life, unit- to doing these products successfully
linked and universal life (UL) insurance than just the price.
targeted at the wealthier segments of
the population. He is referring to various aspects
around the support and services clients THOMAS YOUNG
For Thomas Young, in particular, as get. Everyone is trying to get into the Generali

head of the firms HNW business, the HNW space because its the least
new UL offering in Hong Kong is espe- crowded compared with retail.
cially exciting.
Yet standing out amid those insurers
This is a new proposition of Generali. competing in the HNW space is obvi- First, he says the firm currently offers
We have never done this before any- ously key. And Young believes that most competitive UL product in terms
where globally. Generali has a few unique selling points. of price. Secondly, a novel element he

196 WEALTH MANAGEMENT IN ASIA 2016

highlights is an underwriting class The multi-dimensional nature to UL
which is currently not being offered by is an important aspect of the market
Expanding the Generali
anyone else: an underwriting class for that Young says needs to be better life insurance offering
extremely healthy clients. highlighted to clients. to HNW

We reward customers who are healthy The current challenge that providers Generalis Sigillo Universal Life
Plan reflects the inspiration
with lower premium, explains Young, so face in this segment, for example, is
behind the firms solution for its
we pass the savings to the customers. the fact that clients and potential
most valued clients.
clients are focusing on one particular
At the same time, he cites innovation in product offering. It enables them to pass on their
terms of Generali being the first insurer unique heritage and legacy to
of its type to offer the product to I think thats just because clients are future generations.
Chinese residents of 51 cities in China, not aware of the many different options
Key product features include:
with the same rating as in Hong Kong. available, he adds.
lifelong protection, adjustable
death benefit, guaranteed
crediting interest rate lock
options, guaranteed minimum
crediting interest rate, highly-
flexible premium options,
The current challenge that providers face in this product transparency, easy
segment... is the fact that clients and potential clients access to liquidity, and free
partial withdrawal.
are focusing on one particular product offering.
Thats just because clients are not aware Meanwhile, La Vita Critical
of the many different options available. Illness & Savings Plan is designed
to cater for clients different
needs through their life stages
such as planning for retirement
or a childs education with
guaranteed income feature and
multiple risks coverage.
Indeed, the business out of Hong Kong For example, critical illness is another
services clients from around the region, area where clients can look at getting Key product features include:
wealth accumulation with
dominated by individuals from main- protection on a living benefit cover.
life and waiver of premiums
land China and Taiwan, in addition to This is where Generalis new offering,
protection, comprehensive
the population in Hong Kong. called La Vita, comes into play (see coverage for 100 illness
adjacent box). protection until the age of 100,
A MULTI-DIMENSIONAL guaranteed monthly income
OFFERING The living benefit segment is under- options, guaranteed crediting
interest rate lock options,
The focus for many of the clients that served at the moment, says Young,
guaranteed minimum crediting
Young sees buying UL should start with and the annuity gives clients the
interest rate, highly-flexible
a growing understanding of the prod- option to have a regular income stream premium options, product
ucts large cover. for the future. transparency, and easy access
to liquidity.
This enables them to do much more He is a strong proponent of the idea of
than just protection. giving clients more options.

They can use it for wealth transfer, Banks also need to look at how they
legacy planning, estate equalisation can service a clients more comprehen- side, he explains. And that protection
and even key-man protection, he says. sive needs, including the protection is much more than just life.

WEALTH MANAGEMENT IN ASIA 2016 197

FIRM PROFILE

Tokio Marine carves life

insurance niche in Singapore
James Tan of Tokio Marine Life Insurance Singapore Ltd. explains to Hubbis how the
firm is leveraging its first-mover advantage to establish a new niche in developing
solutions for the insurance needs of Japanese corporates.

Tokio Marine Life Insurance Singapore This is an incredible accomplishment

Ltd. (TMLS) has been recently named a for the first and only Japanese life
Tier-1 Significant Insurer by the Mon- insurer to have established a successful
etary Authority of Singapore, recognis- foothold on local shores.
ing its status as a direct life insurer with
at least SGD5 billion in assets. Behind the story of TMLS strong growth
trajectory is a core focus on its group
With this, TMLS has not only maintained insurance in-force business, which has
a leading position in Singapores fierce- reaped excellent results for the firm.

We see great potential in the J-Business segment,

and our long-term objective is for TMLS to become the
choice insurer for Japanese companies in Singapore. JAMES TAN
TMLS

ly competitive life insurance landscape, From Q1 2015 to Q1 2016, group insur- This performance has been driven by
but also expanded one of the areas of ance business at TMLS outstripped the the J-Business segment TMLS new
growth the Japanese group business industrys growth by nearly six times niche in the firms group insurance busi-
segment (J-business). (Source: LIA Singapore). ness, which was first started in 2015

198 WEALTH MANAGEMENT IN ASIA 2016

and now attaining a year-on-year first-mover advantage and unique areas looking to gain inroads into the South-
growth of 20%. of expertise at TMLS. east Asian market, one of the largest in
the world.
According to James Tan, chief executive THE J-BUSINESS OPPORTUNITY
officer at TMLS, J-Business is specifi- As at end-2014, nearly half of the Japa- As Japanese companies continue to in-
cally tailored to the insurance needs of nese companies in Singapore hosted crease their investments in Singapore,
Japanese corporates, leveraging the regional headquarter functions, accord- notes Tan, insurance will naturally
insurers expertise in holistic, compre- ing to a survey conducted by the Japan emerge as an important consideration
hensive and customised group insur- External Trade Organisation (JETRO) for them.
ance solutions. Singapore, a Japanese government-re-
lated organisation promoting external Japanese companies will be looking for
At present, J-Business is the fastest- trade and investment. a partner whom they can trust and work
growing among TMLS group business effectively with, he adds. This poses a
segments and accounts for approxi- The trend of Japanese companies setting critical gap in the local life insurance
mately 10% of the group insurance up regional headquarter operations in landscape that can only be filled by an
business. Tan, an industry veteran with Singapore looks set to continue, with insurer who is already familiar with the
decades of experience across Asia, another 30% noted as considering similar ubiquitous workings of Japanese busi-
Middle East and the US, intends to moves in the same survey. It is easy to nesses, and can adapt their offerings to
further develop this niche. understand Singapores appeal to the anticipate and address the specific
needs of these companies in a new
foreign market.

TMLS UNIQUE POSITIONING

At the heart of its strategy to capture
Japanese companies who are venturing into Singapore and grow business relationships with
need a partner whom they can trust to understand their Japanese companies in Singapore is
business priorities and concerns, and develop solutions TMLS expertise in developing tailored
in anticipation of their needs in this new market. solutions, along with its heritage as part
of the Tokio Marine Group, one of the
largest insurance groups in the world
and a household name in Japan.

As an insurer and adviser to our clients,

We see great potential in the J-Busi- many Japanese companies keen on our business at TMLS is founded on trust
ness segment, and our long-term objec- setting up regional headquarter func- and understanding, explains Tan.
tive is for TMLS to become the choice tions in the country.
insurer for Japanese companies in Sin- Japanese companies who are venturing
gapore, he says. The city-state has established a formi- into Singapore need a partner whom
dable reputation as one of the most they can trust to understand their busi-
As the pioneer in the J-Business niche, business-friendly countries in the world, ness priorities and concerns, and
we are already working with nearly 200 with a comprehensive financial services develop solutions in anticipation of their
Japanese corporate clients across a wide infrastructure, strong risk management needs in this new market.
range of industry sectors including con- ecosystem and pro-business laws.
struction, retail and logistics. In the year Adds Tan: As a Japanese company
ahead, we will be exploring new avenues Its strategic position in the region also which has also embarked on our own
to engage the Japanese business com- means that Singapore is seen as an ideal expansion into Singapore, we are
munity in Singapore, leveraging our starting point for Japanese companies naturally able to understand the intri-

WEALTH MANAGEMENT IN ASIA 2016 199

FIRM PROFILE

cate concerns of our Japanese corpo- The firm is already an established saving towards a pre-determined sum,
rate clients, especially in relation to member of the Japanese Chamber of individual plans should be developed
the market entry process. Our solu- Commerce and Industry (JCCI), and based on lifestyles and spending habits.
tions at TMLS are therefore informed Tan believes that key to further expan-
by our expertise in bespoke offerings, sion of the J-Business is continued Adds Tan: The worksite sessions allow
and our first-hand understanding of engagement within the community. us the time and flexibility to explain this
Japanese corporate culture and the advice at length, and to better under-
market entry process. This year, TMLS J-Business team has stand our customers thinking and ap-
embarked on a series of initiatives to proach to retirement planning. This in
In staying true to the Good Company reach out to the community. turn helps us to come up with retirement
philosophy of the Tokio Marine Group solutions that are more suited to their
and the distinctly Japanese concept of These include worksite events in infor- lifestyle preferences.
omotenashi (to entertain guests whole- mal and intimate settings, such as lunch-
heartedly), TMLS is constantly on a time talks and seminars, where TMLS Other initiatives that TMLS has
quest to perfect its J-Business approach experts can share their knowledge with adopted to establish its Japanese iden-
right down to the smallest detail. employees at Japanese companies. tity and build camaraderie among the

It speaks volumes about the insurers

standards in client servicing that for
instance to ensure the effectiveness
of the J-Business team in developing
solutions for Japanese corporates,
Our current overall persistency in renewal
some of whose key decision-makers ratios stands at above 95%, and this
may be more comfortable conversing gives us confidence that we are
in Japanese, TMLS has ensured the J- heading in the right direction.
Business team comprises fluent Japa-
nese-speaking product experts.

In Tans eyes, these efforts in sincerity

go a long way. Our track record bears
testament to the TMLS teams efforts These worksite events enable our Japanese business community include
in ensuring long-term, sustainable experts to engage employees on a per- sponsorship of outreach events.
client relationships based on trust and sonal level, says Tan.
satisfaction, he says. These include Japan Hour, a popular
We make it a priority to cover financial Channel NewsAsia programme that
Our current overall persistency in planning topics that they are genuinely spotlights Japanese culture.
renewal ratios stands at above 95%, interested in, such as writing wills, re-
and this gives us confidence that we tirement planning or MediShield Life. Our commitment to the Good
are heading in the right direction with Company principles of integrity and
our dedicated efforts in strengthening He shares that the most frequently- stakeholder trust will continue to be
our J-Business approach, he adds. voiced concern is retirement adequacy. the cornerstone of our work in the
decades to come, he explains.
FORWARD VISION The most common question we en-
As the insurer for nearly 200 Japanese counter in discussing retirement plan- Being an international organisation
corporates in Singapore, TMLS is on ning with employees is the magic allows us the opportunity to expand our
track to choice-insurer status for the number that they need to save towards, business prospects, while keeping our
Japanese business community. he explains. Our counsel, is that beyond Japanese heritage close at heart.

200 WEALTH MANAGEMENT IN ASIA 2016

 2016
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EXPERT INSIGHTS

Eyeing healthy profits from a

more mobile China
The rapid growth in Chinas insurance sector is fueling Bupa Globals desire to craft
medical plans tailored to the countrys affluent population. Rainbow Pan reveals the
vision behind the strategy.

According to data from the China Insur- says Rainbow Pan, the firms general
ance Regulatory Commission (CIRC), manager for the Greater China region.
the mainland became the worlds third-
largest insurance market in 2015 with And with more of Chinas wealthier
an annual growth rate of 13.4%. And population becoming not just globally
from 2010 to 2015, the market saw an minded, but also internationally mobile,
increase in insurance premiums from there is good reason for optimism.
RMB1.3 trillion (USD196 billion) to
RMB2.4 trillion. Further, the firm already works with a
local partner, Alltrust Insurance, which
The Chinese government has also ini- has over 200 offices across the main-
tiated major reforms to provide cus- land, licensed to write medical insurance
tomers with access to improved business and is the local insurer for
medical services. products issued under another agree-
ment Bupa has with Hang Seng Bank.
Eyeing these trends, Bupa Global aims
to play a big role in the market and So after tapping into the key initial op- RAINBOW PAN
Bupa Global
even see potential for its portfolio in portunities in Beijing, Shanghai, Guang-
mainland China to overtake that of zhou and Shenzhen, a host of other
Hong Kong within three years in terms cities are on the radar, adds Pan.
of international private medical cover.
CONSISTENT OFFERING
Despite a relatively low base at the Pan says she sees first-hand evidence trip to the US West coast. One can see
moment in China, Bupa Global has been of the significant rise of international them where ever you go travelling in
investing a lot in Asia and we see this mind-set of Chinese nationals during the world these days. So they need
part of the world as a growth region, her visits overseas, including a recent good cover just in case. And it doesnt

202 WEALTH MANAGEMENT IN ASIA 2016

matter where they go. Thats the op- ance company for their medically-re- Through this arrangement, a range of
portunity I see, she explains. lated assistance services. global medical insurance products
and services are made available to
Service-wise, what Bupa offers in main- Patients get informed about the best Hang Seng Banks personal and cor-
land China is comparable with whats doctors available, and if required, Bupa porate customers.
available in Hong Kong. will confirm the appointment at no
extra charge, says Pan. DEMAND DRIVING TRAJECTORY
For instance, it offers the Bupa Global One of the main reasons for the growth
Health Plan range, a new product Yet all plans still come with annual in private medical care in mainland
launched in 2015 as a tiered proposition health check-ups and medical con- China stems from the desire among the
with pricing to reflect this structure. cierge services, including emergency ever-larger numbers of wealthy for
assistance and evacuation, repatria- higher-quality services.
We will be co-branding the Global tion, second opinion and a round-the-
Health Plan range with Blue Shield clock helpline. But concerns among these individuals
Global, as part of the next phase of our about the cost of getting access to
partnerships and this will be delivered EXPANDING ITS CHANNELS this in comparison with state-run
in a phased approach, starting in Asia IN CHINA facilities.
with Hong Kong, explains Pan. Partnerships are key to the success of
Bupa Globals strategy in China. The hospitals which are empanelled
The coming together of the two names by Bupa Global will seek pre-authori-
means consumers who require global Given its target market of wealthy in- sation for direct billing of our custom-
coverage can now have access to the dividuals and families, the firm looks ers, explains Pan.
largest network of health care provid- to intermediaries like private banks
ers worldwide. and wealth management firms to help Our care managers, who have a
reach this audience. medical background, will look at the
This combined strength, knowledge
and expertise means customers can be
confident in knowing that they have
access to quality health care when and
where they need it, she adds. Bupa Global has been investing a lot
in Asia and we see this part of
More specifically, this involves a range
the world as a growth region.
of premium policies for the affluent to
HNW audience.

Pan explains that this came about after

some extensive research revealed that
customers prefer something which is The bancassurance channel is also treatment offered by the doctors, and
simple and easy to understand. proving increasingly popular. then help customers better understand
their medical condition, she adds.
Within Bupas Global Health Plan A 10-year exclusive partnership with
range, a product called Ultimate has Hang Seng Bank began in Hong Kong They can then suggest the best pos-
no annual and lifetime limits. in September 2014. sible alternative treatment, doctors
and/or hospitals related to the cus-
And the level of medical concierge A similar venture got off the ground tomers medical conditions in order to
service is akin to customers having in China in September 2015, also with give the policyholder more options,
their own secretary within the insur- Hang Seng Bank. explains Pan.

WEALTH MANAGEMENT IN ASIA 2016 203

EVENT HIGHLIGHTS - DIGITAL WEALTH - ASIA 2016 - JUNE

Turning digital into reality

Speaking at Hubbis flagship annual Digital Wealth event in Singapore in mid-June 2016,
senior industry practitioners highlighted some of the most pressing considerations and
objectives to ensure institutions get moving in the right direction along their inevitable
digital path.

Financial institutions are re-assessing to offer to clients to service their wealth

their strategies and engagement of all management needs.
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kinds of technology.
Yet disruption in any dramatic way looks Allocated Bullion Solutions
Amid all the hype and talk among banks unlikely. So management need to focus Appway
about them looking to enhance their on how to evolve and enhance their EY
IMTF
digital propositions and offer clients businesses to thrive, not wither, in
Intellect Design Arena
more via these channels, they need to todays challenging environment.
Pershing
act if they want to address the real IRESS
challenges they still face. While the This is needed in private banking, for SIX Financial Information
demand for digital wealth management example, given the move away from Vermilion Software
is growing among Asian investors, purely face-to-face conversations, to a Assentis Technologies
Orbium
many traditional players are struggling landscape where clients can interact
Synpulse
to respond. with an individual adviser as well as the
Temenos
institution through different and mul- Thomson Reuters
For those institutions in search of in- tiple channels. Plus, the trend is heading
novation and digitisation for their in a direction where it will be possible
wealth management business, there- for customers to transact directly
fore, they need to carefully consider through the bank.
how they work ever-closer with (the end solutions, some industry leaders
right) fintechs as the former rely on the Plus, while a lot of people get most think the right approach is to start at the
latter for something interesting and new excited and focused in relation to front- back end especially given regulations
and operations are critical areas of
concern for many senior management.

One of the principal premises of robo-

advisory, meanwhile, has always been to
change the way of thinking about invest-
ing towards being more goals based. This
resonates with many investors. Institu-
tions will increasingly see the advan-
tages of going down this route, to
ensure their end-customers remain
satisfied and can be self-directed.

204 WEALTH MANAGEMENT IN ASIA 2016

Adrian Gostick Andrew Koh Andy Feitknecht Charles Wong Dirk P Sibiet
BondIT Asia China Construction Bank Assentis Technologies Priv Holdings ABN AMRO Bank

Dr Lee Ng Eddy Tai Evy Theunis Frank Henze Frank Troise

MetLife Bank of Singapore DBS Leonteq Securities

Gary Mellody Antony Lewis Joyce Tan Julia Walker Ketan Samani
EY Bitsonblocks.net Joyce A. Tan & Partners Thomson Reuters UBS Wealth Management

Luke Janssen Mark Buesser Mark Nelligan Mark Wightman Neal Cross
Tigerspike IMTF Pershing Securities EY DBS Bank

Ned Phillips Peter McMillan Pranav Seth R.N. Nagaraj Prasadh Sandipan Ray
Bambu Thomson Reuters OCBC Bank Intellect Design Arena Deutsche Bank Wealth Management

WEALTH MANAGEMENT IN ASIA 2016 205

Sanjoy Sen Stefan Arn Steve Monaghan Urs Lichtenberger Valerie Bruce
ANZ UBS AIA Credit Suisse Old Mutual International

Alessandro Tortelli Bhaskar Prabhakara Jaideep Billa Jason Hoang Jeroen Buwalda
Appway WeInvest Intellect Global Consumer Banking IRESS EY

This event has been very important in highlighting and

re-enforcing the issues the banks face and the challenges
in terms of moving forward.
Ravish Khanna, Vice President, Change Management, APAC, BNP Paribas Wealth Management

Zoe Niu
Appway

206 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

A process to digitalisation

Artificial intelligence, machine learning and other digital capabilities make it possible to
connect multiple information sources and systems to come up with solutions and views
to ensure advisers are more productive, says Peter McMillan of Thomson Reuters.

Digital platforms have gathered a lot explaining that it isnt practical for rela-
of momentum in the US over the past tionship managers (RMs) to join the dots
12 to 36 months, says Peter McMillan, to help them understand what is hap-
head of wealth management for pening in the market, how it relates to
Thomson Reuters in Asia. their CRM database and the suitability
for their client.
This shows the focus on enhancing digital
platforms with the aim of reaching more In line with this, creating a smooth com-
customers and provide better advice, to munication path is also a key compo-
provide a better user experience. nent, adds McMillan.

In Asia, many banks are involved with An RM should have multiple ways to
accelerators, innovation labs and other connect with clients, to get the informa-
initiatives to try to understand the tion they need, on the device preferred,
fintech arena and enhance platforms and when they want it. Plus, it should
with capabilities that enable them to connect to all the other databases if
better service clients, says McMillan. they need that information. PETER MCMILLAN
Thomson Reuters

Private banks, in particular, are looking This is essential from a suitability per-
at ways to address the margin, regula- spective, for example, explains McMil-
tory and investment pressures they face. lan, to know what investment product
is pre-qualified.
CREATING DIGITAL PLATFORMS Ultimately, he says this reduces the time
One of the first steps institutions should By extension, this can integrate model RMs spend on research and processing,
take along this digital journey is to portfolios, to assist in comparisons with to free them up to focus on prospecting
connect multiple databases, he advises, client portfolios at different risk levels. and servicing clients.

WEALTH MANAGEMENT IN ASIA 2016 207

EXPERT INSIGHTS

Why banks must rely on

fintechs
Ralph Mogicato, a fintech angel investor, explains why banks and fintechs will work ever-
closer as the former rely on the latter for something interesting and new to offer to clients
to service their wealth management needs. Disruption in any dramatic way looks unlikely.

Because most banks are not innovative But there will be no brave new world
by nature, they will increasingly rely on along the lines of earlier predictions.
fintechs to drive client interactions and Instead, Mogicato says banks need to
engagement within wealth manage- work out how to get the most value for
ment. As a result, they are more eager their wealth management businesses
than ever before to get these companies from collaborating with fintechs today.
on board.
And the consequences for banks which
This is according to Ralph Mogicato, an dont take these developments seri-
entrepreneur and independent senior ously will be severe, he predicts. In the
adviser, who says this explains the hype medium term, they will be less interest-
and potentially large bubble emerging ing and relevant to their clients. And in
in this space. the long term, they wont be in business
at all if they dont offer attractive prices,
This also explains the shift in what fin- good execution and a quality service.
techs are focusing on. The original
fintech companies were supposed to A NEW FINTECH FOCUS RALPH MOGICATO
be disruptive. However, today every Against this backdrop, now is the Angel investor and entrepreneur
start-up which writes a line of [program- moment for more fintechs to enter the
ming] code calls itself a fintech, says limelight given that their agility and
Mogicato. There are not many firms pace provide them with the opportu-
which are genuinely disruptive. nity to implement their ideas without
the baggage of legacy systems. to those banks shackled by a heavy level
As a result, while some fintechs will of financial regulation and compliance
inevitably be successful, many wont It is in this way which they will be criti- issues. Testament to this trend is the
survive for long. cal in providing a competitive advantage number of innovation labs and accel-

208 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

erator programmes which have sprung exist, but they will have been able to
up around the world and initiated by use fintechs in ways to help to trans-
What to look for when
some of the worlds largest banks. form their businesses. investing in a start-up

Further, a recent study by Accenture of To get to this stage, however, more It is generally quite easy for
global investment in fintech ventures banks need to start focusing on change fintechs to raise money and get
a first meeting. The elements
in the first quarter of 2016 showed that management. If they dont get the
they need to survive over time,
this reached USD5.3 billion, a 67% in- basics right, such as the right core plat-
however, include:
crease over the same period last year. form and clean up their application
The report also noted that the percent- landscape, then they will fail, explains A good and highly-motivated
age of investments going to fintech Mogicato. They will prove to be too founder team
companies in Europe and Asia Pacific slow and its too expensive to survive. A good simple idea
complexity is not good
nearly doubled, to 62%.
Fast execution of the idea
As a result, he is positive about fintech.
Find one or two existing
Perhaps most notable about the report, Banks must be more focused on their clients using the product
and backing Mogicatos observations, client and their needs, which means or service
is that collaborative fintech ventures better products and faster execution.
those primarily targeting financial Banks can do more with start-ups which
institutions as customers are gaining can produce software for business-to-
ground over so-called disruptive business applications. Payment-oriented firms, for example,
players that enter the market to and those at the retail end of the busi-
compete against those institutions. In particular, the back-end must work ness with customers as their focus, are
and be flexible, and straight-through going to be big the most likely among
For example, funding for collaborative processing is a crucial component of all fintechs to become the future Ubers.
fintech ventures, which accounted for this. But this is a key area of the business
38% of all fintech investment in 2010, which most banks have ignored. They Robo-advisers will be the other big
grew to 44% of funding in 2015, with neither renovated what they have disruptive force, with the more success-
the remaining investments made in already, nor put in place a new one. ful ones which get the formula right to
ventures competing with institutions. be the defining element of wealth man-
Without this, what most banks have, agement driving the future of advi-
Yet, the proportion of competitive says Mogicato, is akin to putting a Ferrari sory and marketing in the near future.
fintech ventures in Europe and Asia is engine in an old-timer it wont work.
much higher than in North America, The game-changing firms, therefore,
reflecting the earlier stages of maturity Yet the banks arent the only firms in the are those which can be unencumbered
of fintech markets, outside of London. ecosystem which need to adapt. Core by the constraints of the traditional way
banking providers such as Avaloq and of thinking in wealth management.
However, while so-called disruptors Temenos, for example, are confronted
may compete against banks at first, they by new technologies such as blockchain. Yet banks need to do more in their
often end up aligning with them through pursuit of fintech. They need clearly
investments, acquisitions and alliances, These firms have responded in other identified long-term goals in collabora-
said the report. It highlighted BBVAs ways, by building their own app stores tions with such firms such as increas-
recent stake in Atom, a mobile-only where banks can plug into their plat- ing the companys revenue or profit.
bank in London that launched last week. forms new solutions from start-ups.
For fintechs, they need to ensure what
DRIVING CHANGE SET FOR SUCCESS they offer is tangible with valuable
In the years to come, Mogicato believes It has also become clearer which kind output. This will prevent them falling
that many financial institutions such as of fintech has the biggest potential to prey to cost-based decisions when pres-
banks and insurance companies will still create a splash. sures increase, explains Mogicato.

WEALTH MANAGEMENT IN ASIA 2016 209

EXPERT INSIGHTS

Turning digital into reality

Speaking on the sidelines of Hubbis flagship annual
Digital Wealth event in Singapore in mid-June 2016,
senior industry practitioners highlighted some of the
most pressing considerations and objectives to ensure
institutions get moving in the right direction along their
inevitable digital path.

Financial institutions are re-assessing their strategies and engagement of all

kinds of technology. Delegate, speaker and
sponsor summary
Amid all the hype and talk among banks about them looking to enhance their
More than 35 high-profile
digital propositions and offer clients more via these channels, they need to act
speakers and 330 attendees
if they want to address the real challenges they still face. While the demand for Delegates included CEOs,
digital wealth management is growing among Asian investors, many traditional COOs, heads of technology
players are struggling to respond. / digital, and other senior
practitioners attended
from a mix of Private Banks,
For those institutions in search of innovation and digitisation for their wealth
Retail Banks, Insurance
management business, therefore, they need to carefully consider how they
Companies, Independent Firms
work ever-closer with (the right) fintechs as the former rely on the latter for & Family Offices, and Asset
something interesting and new to offer to clients to service their wealth Management Firms
management needs. Sponsors: Appway, EY, IMTF,
Intellect Design Arena,
Pershing Securities, Allocated
Yet disruption in any dramatic way looks unlikely. So management need to
Bullion Solutions, IRESS, SIX,
focus on how to evolve and enhance their businesses in order to thrive, not
Vermillion, Assentis, Orbium,
wither in todays intensely-challenging environment. Synpulse, Temenos, Thomson
Reuters
Against this backdrop we designed our flagship annual digital wealth event
in Singapore.

DRIVING INNOVATION AND EVOLUTION

Digital disruption is continuing to influence private
banking, with a move away from purely relationship
manager (RM)-driven, face-to-face conversations, to a
landscape where clients can interact with an individual
adviser as well as the institution through different and
multiple channels. Plus, the trend is heading in a
direction where it will be possible for customers to
transact directly through the bank.

210 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

WHICH OF THE FOLLOWING IS THE TOP TECHNOLOGY-RELATED

PRIORITY IN ASIAN WEALTH MANAGEMENT? Key topics and themes

Technology - its role in the

55% Enhance the client experience
future of wealth management
Create digital advice plaorms Digital enablement -
(to lower costs, boost efficiency)
redefining the client
Automate risk / compliance processes experience
Ensure connecvity between internal Change management or
& external systems change the management?
Getting your digital bank
23%
ready
Fintech: fantasy or reality?
14% Regulation and compliance -
8% what can technology really do
to help?
Source: Hubbis Digital Wealth - Asia 2016, Singapore What will you be in the
future: a platform? A
product manufacturer? Or a
In line with this, fintech is having a big impact on this space as a catalyst to distributor?
spur innovation at traditional organisations across the industry, and more Innovation
quickly, than would be the case if these disruptors didnt exist.

As a result, the market will become increasingly fragmented, but complete

disruption is unlikely.

Indeed, some practitioners believe the change is coming more from the tech
aspect rather than the fin element.

Further, it is not a process which can happen overnight. It also takes time to
convince all stakeholders and staff about the right way to do this.

In addition, while a lot of people get most excited and focused in relation to
front-end solutions, some industry leaders think the right approach is to start
at the back end especially given that regulations and operations are critical
areas of concern for many senior management.

60%
The proportion of respondents who said
technology should play an offensive role as
part of the strategy to expand the offering
to drive revenue Pranav Seth, OCBC Bank

WEALTH MANAGEMENT IN ASIA 2016 211

EXPERT INSIGHTS

This is key, given that businesses need to be based on

how they feed information into their systems and also
how it is reconciled as well as the accuracy of all this.

Getting this right then enables firms to deliver

information to clients in as efficient and fast a way
as possible.

Saying this, the front end does need to develop in

parallel given the role it plays in the customer
engagement and experience.

Although Asia is lagging the US and Europe in many areas, those institutions
which can catch up fastest will be the firms which can reap the biggest
rewards, at least in the short term.

WHICH OF THE BELOW DO INSTITUTIONS MOST NEED TO CHANGE

TO ADAPT & THRIVE AGAINST DIGITAL DISRUPTORS AND
COMPETITORS?

24%
Culture & mind-set of staff

Leadership

Taking a strategic not silod

33% approach to systems

24% Willingness to collaborate

with fintechs

Value proposion

10% 9%

Source: Hubbis Digital Wealth - Asia 2016, Singapore

ROBO-ADVISORY HERE TO STAY

One of the principal premises of robo-advisory,
meanwhile, has always been to change the way of
thinking about investing towards being more goals
based. This resonates with many investors.

Coupled with the greater transparency created, in terms

of options, track record, and lower costs and fees, and
robo-advisory becomes ever-more compelling for clients.

Jeroen Buwalda, EY and Mark Nelligan, Pershing Securities

212 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

Institutions will also increasingly see the advantages of

going down this route, to ensure their end-customers
remain satisfied and can be self-directed.

However, despite there being no doubt that this is the

right place at the right time, as this new way of investing
gathers momentum, the market will need to wait and see
which solutions prevail.

TRANSFORMATION
Neal Cross, DBS Bank
In terms of the transformation process underway within
private banks, it is important that the senior management at these institutions
have a clear vision.

WHAT WILL MAKE THE DIFFERENCE BETWEEN THOSE FINTECHS

WHICH SURVIVE, AND THOSE WHICH WILL DIE OUT?

81%
Commercial viability /
demand including
profitability

Quality of management

Commercial relaonship
of the fintech

Strength of technology

6%
6%
7%

Source: Hubbis Digital Wealth - Asia 2016, Singapore

Business leaders must drive the change, by picking the

right people and choosing the right methodology to
execute the plan which often requires a bank to
be agile.

Although some of the changes to come might not be as

drastic as what is happening in the fintech space, the
focus must still be on client engagement and delivering
solutions to improve the client experience.

WEALTH MANAGEMENT IN ASIA 2016 213

EXPERT INSIGHTS

What if an Uber wealth

was born?
Financial institutions face a strategic choice: either be disintermediated or become part
of the new reality. Raj Ganesarajah of Intellect Design Arena explains why and how the
latter is the only route to survival.

The rise of Uber, which is estimated to whether they want to be displaced or

have taken about 50% of the share of become part of the evolution, as the
taxi usage, has convinced a lot of people wealth management industry strives
that digital will if it hasnt already for greater efficiency.
change the world.
THE UBER OF WEALTH
These proponents include Raj Gane- MANAGEMENT
sarajah, the Malaysia country head According to Ganesarajah, relationship
and senior vice president at Intellect managers (RMs) and IFAs would react
Design Arena. in the same way to an equivalent to
Uber in this industry.
An example in the context of the finan-
cial space, he says, is the birth of online This is because it can help them find
peer-to-peer lending companies. an easier and more efficient way to
serve clients.
The digital trend is only likely to gather
momentum in the industry, believes His firms digital platform, he explains, RAJ GANESARAJAH
Intellect Design Arena
Ganesarajah. enables investors to manage their port-
folios in a self-service style.
For instance, he says the emerging af-
fluent like to use digital devices, indicat- This ranges from creating and refin-
ing that they are looking for a service ing their own portfolios, to tracking
that matches such a lifestyle. and analysing the performance, and Yet while this Uber-style approach to
even includes back-testing various wealth management gives investors
In turn, financial institutions must now model portfolios to develop their own more control, they can still call on advis-
think much more carefully about model portfolios. ers for help.

214 WEALTH MANAGEMENT IN ASIA 2016

 Digital Wealth - Asia 2016
10 November, 2016
Island Shangri-La, Hong Kong

REGISTER NOW
At the Registration desk

World-class speakers 300+ Delegates Thought-leadership Networking

www.hubbis.com/mainEvent/
Hubbis digital learning solution
We help practitioners at Private Banks, Retail Banks, Insurance Companies, IFAs,
Multi-Family Offices and Independent Asset Managers meet their professional education
obligations via various digital learning content, event presentations, videos and more.

100+ assessed courses Why we are different

Digital learning modules
ASIA-SPECIFIC CONTENT - Hubbis is the only
Hubbis offers 100+ proprietary training courses covering
provider of online learning that is solely dedicated to
core topics relevant to compliance obligations, investment
the Asian wealth management industry
and product knowledge, advising families on long-term wealth
structuring, and generally building and improving effective VALUE FOR MONEY - We want to ensure learning is
& appropriate advisory skills in an Asian industry context. affordable and accessible to everyone in the wealth
management industry. We never charge any fees for
on-boarding or end-user training
Analyse results
Reporting GOVERNANCE - We constantly review & upgrade
the relevance and timeliness of the platform this
The Hubbis system allows the recording and reporting of all
includes adding new courses every week, adapting
online and offline internal and third-party training in order to
functionality to the needs of different markets and
provide a complete training record for each individual. The
types of institutions, and improving the technology.
Hubbis digital learning platform also offers a dedicated report-
We also regularly bring together - via our events
ing feature enabling HR and / or compliance managers to gen- and private thought-leadership discussions - market
erate customised data sets to match both internal and regula- experts on all topics. This enables us to check our
tory training reporting requirements. existing content and plan new courses

COLLABORATION - We collaborate with more

200+ hours of live content than 100 existing partners on the learning platform
Presentations, video Q&As getting feedback and incorporating new ideas for
Hubbis augments formal digital courses with over 200 hours content, functionality and technology. Plus, we work,
of live-learning content that ranges from videos to engaging across the overall Hubbis business, with more than
375 partners continually discussing with them their
presentations from Hubbis highly-acclaimed Wealth Man-
problems to understand the reality of the market
agement events. Each training course and many of the ad-
ditional materials are in modules of 30 and 60 minutes for
EDUCATION - The material we produce is USEFUL
CPT/CPD/OPT. And all Hubbis modules are assessed prior
and USEABLE. It helps wealth managers and other
to completion to assist in demonstrating users learning practitioners meet their continuing professional
success for regulatory reporting. development needs in a practical and robust way

CONTENT DEVELOPMENT - We source content and

Hubbis events insights from the most respected and experienced
Access to our Forums practitioners at the leading firms in the market and
Attendance at any of the Hubbis events throughout the package it for our learning platform
year at no additional cost - including forums in 10 markets
across Asia, plus in Switzerland and Dubai. REPORTING We enable users to generate
individual, team and annual training records on
demand. We offer built-in, customised reporting tools
to quickly meet regulatory requirements
 Our learning platform

HR & compliance Administrators The user Live learning

LEARNING PLAN

Online Tracking
Simple access through an internet We give HR & compliance managers
Online courses
portal that is available 24 hours a day, the ability to build learning plans, and
365 days a year. You will have access apply those plans to defined groups,
to 100+ engaging e-learning courses and track and record each individuals
that enable users to conveniently earn learning progress.
CPT / CPD / OPT points.

Tracking

Reporting Records
Not all e-learners are at the same stage The e-learning reporting function
in their professional development or also allows all offline and 3rd-party
Reporting
training lifecycle. The integrated training to be uploaded to give a single,
reporting system allows HR & consolidated history for each user. It
compliance managers to monitor also enables organisations to report
employee progress - highlighting areas this training to the regulator in a fast,
of weakness / strength. accurate and consistent format.

Consolidated record

Meeting your critical

compliance requirements
Contact us: learning@hubbis.com
DIRECTORY

People and firms who supported

this publication
We very much appreciate the participation and contribution of key individuals and
organisations in the asset and wealth management communities to the content in
this publication.

PEOPLE QUOTED
Adriel Loh, Bank of Singapore Jonathan Hubbard, UBS Wealth Management
Alan Luk, Hang Seng Bank Joseph Tam, Wing Lung Bank
Albert Chiu, EFG Bank Juan Aronna, RBC Wealth Management
Alison Brown, HSBC Global Asset Management June Wong, State Street Global Advisors
Alvin Lee, Maybank Karan Bhagat, IIFL Private Wealth Management
Alvin Ma, EFG Bank Kevin Lee, Zhong Lun Law Firm
Amanda Chen, Nomura Kevin Talbot, Aviva Investors
Andri Manatschal, PwC Kris Chantanotoke, Thai Life Insurance
Angelo Venardos, Heritage Trust Group Lavanya Chari, Deutsche Bank Wealth Management
Anshu Kapoor, Edelweiss Global Wealth Management Lonnie Howell, UCAP Asset Management
Anthonia Hui, AL Wealth Partners Malik Sarwar, HSBC
Arnaud Tellier, BNP Paribas Wealth Management Marc Lansonneur, DBS Bank
Bassam Salem, Citi Private Bank Marc Van de Walle, Bank of Singapore
Benjarong Techamuanvivit, Kasikorn Asset Management Martin Crawford, Vistra Group
Bernard Renell, HSBC Private Bank Michael Blake, UBP
Brian Shegar, Emirates NBD Michael Levin, Credit Suisse
Catherine Kirchmann, Investec Wealth & Investment Mignonne Cheng, BNP Paribas Wealth Management
Damien Mooney, BlackRock Nanjo Berba, Philam Asset Management
Danial Mah Abdullah, Labuan IBFC Neil Harvey, Credit Suisse
Don Charnsupharindr, Citi Nick Pollard, CFA Institute
Eleanor Wan, BEA Union Investment Nigel Preston, St. Jamess Place Wealth Management
Evrard Bordier, Bordier & Cie Nigel Rivers, Capital Solutions
Febby Avianto, Falcon Private Bank Paul Gambles, MBMG Group
Fredrik Lager, SEB Private Banking Paul Hodes, Citi
Georg Schubiger, Bank Vontobel Paul Stefansson, UBS Wealth Management
Grace Chow, Bank of East Asia Peter McMillan, Thomson Reuters
Hans Diederen, Heritage Trust Group Philippe Legrand, London and Capital Asia
Harmen Overdijk, Caidao Wealth Piers Brunner, Knight Frank
James Tan, Tokio Marine Life Insurance Singapore Rainbow Pan, Bupa Global
Jason Dehni, Sun Life Hong Kong Raj Ganesarajah, Intellect Design Arena
Jason Lai, Thirdrock Group Ralph Mogicato, Angel investor and entrepreneur
Jing Zhang Brogle, Edmond de Rothschild Robert B Ramos, Union Bank of the Philippines
Jirawat Supornpaibul, Kasikornbank Robert Foo, MyFP Services
Joachim Straehle, EFG International Roger Bacon, Citi Private Bank
John Cappetta, Bank Julius Baer Roger Steel, Sun Life Financial

218 WEALTH MANAGEMENT IN ASIA 2016

Ron Lee, Goldman Sachs Generali
Sandeep Sharma, HSBC Private Bank Henley & Partners
Sanjay Iyer, Iyer Practice Advisers Heritage Trust
Seamus Donoghue, Allocated Bullion Solutions HP Wealth Management
Shanker Iyer, Iyer Practice Advisers HSBC Private Bank
Shikha Gaur, Aon Hewitt IMTF Group
Stephanie Jarrett, Baker & McKenzie IRESS
Stewart Aldcroft, Citi Iyer Practice Advisers
Sunil Iyer, Iyer Practice Advisers J O Hambro Capital Management
Thomas Young, Generali JPMorgan
U Chen Hock, RHB Bank London & Capital Asia
Vincent Chui, Morgan Stanley Nordea Bank
Numerix
Old Mutual Global Investors
Orbium
ADVERTISERS Pershing
AAM Advisory Principal Global Investors
Allocated Bullion Solutions RBC Wealth Management
Appway Rosemont
Asiaciti Trust St. Jamess Place Wealth Management
Avaloq Sun Life
Aviva Investors Swaen Capital
Bain & Company Swiss Asia
Bank of China (HK) Swiss Life
Bank of East Asia Synpulse
BEA Union Investment Temenos
BlackRock ThirdRock
BNP Paribas Wealth Management Thomson Reuters
Bordier & Cie Tokio Marine
British and Malayan Trustees Limited TTG
Bupa Global UBP
BVI House Asia Vermilion Software
Caidao Wealth Vistra
Capital Solutions VP Bank
CFA Institute Willis Towers Watson
Citi Private Bank
Credit Suisse
DBS Bank
EFA Group
Enhanced Investment Products
EY
EFG Bank
Falcon Private Bank
Finaport
First Names Group
Franklin Templeton Investments
Friends Provident International
Fullerton Fund Management

WEALTH MANAGEMENT IN ASIA 2016 219

Residence programmes offer
solutions to security risks
Dr. Juerg Steffen of Henley & Partners explains the value and merits of residency
programmes, especially in Singapore and Malaysia.

The quickening pace of globalisation sponding country-to-country agree-

has given rise to a growing demand for ments to be executed.
greater transparency among financial
institutions and tax authorities. It is a big step towards a globally-coor-
dinated approach to disclosure of
In response to this, the Organization income earned by wealthy individuals
for Economic Co-operation and De- and organisations.
velopment (OECD), with the support
and endorsement of various countries There is potentially however, some risk
and international bodies including the involved to the security of these indi-
G8, G20 and Central Bank Governors, viduals and their families once govern-
has called for the global implementa- ments begin exchanging sensitive fi-
tion of its Standard for Automatic nancial information.
Exchange of Financial Account Infor-
mation (The Standard). For wealthy families who have concerns
regarding their privacy, one option is to
The Standard, which was developed as consider moving to another country DR. JUERG STEFFEN
Henley & Partners
a proactive measure against tax evasion, where the overall situation is more fa-
outlines how financial account informa- vorable with regard to security, tax,
tion of foreign tax residents may be lifestyle and education.
disclosed by financial institutions and
governments to relevant authorities in Henley & Partners, the global leader in
order to locate untaxed wealth. residence and citizenship planning, children with future options of living,
offers several residence options that working and studying in several coun-
This would require domestic legisla- are tailor-made to the needs of affluent tries, can help them achieve interna-
tion to be implemented and corre- families, and through providing their tional success.

220 WEALTH MANAGEMENT IN ASIA 2016

Key residence programmes of real inter- mies, due to its continued industrial Steffen adds: Most investors who are
est today include Singapore and Malaysia. growth and political stability over the searching for alternative permanent
past few decades. residence are motivated beyond money;
Dr. Juerg Steffen, Group Board Member instead they are often looking to invest
of Henley & Partners and Managing It is a highly-open, upper-middle income in countries from a family, social and
Partner of its Singapore office, says: economy and the third largest economy cultural perspective.
in this region.
The Singapore Global Investor Program Residence-by-investment programmes
(GIP) and Malaysias My Second Home Successful applicants and their depen- can deliver the quality of life and secu-
Program (MM2H) both offer significant dents are granted a 10 year multiple- rity these individuals seek, concludes
attractions and benefits to those able entry visa. Steffen.
to diversify their lives and assets.

He continues: Singapore is considered

one of the worlds best places to live,
and is frequently voted as the top Asian
city to live in, because of its excellent
infrastructure and public services.

It is also one of the wealthiest countries

in the world measured by GDP per
capita. Its GIP allows investors and en-
trepreneurs to apply for a permanent
residence permit.

The MM2H meanwhile, has accepted

more than 27,000 applicants since its
inception in 2002. Malaysia is one of
South-east Asias most vibrant econo-

WEALTH MANAGEMENT IN ASIA 2016 221