the exclusive forward-thinking global wealth management...

WEALTH THINK 2014 1

2014

The exclusive forward-thinking global wealth management leadership summit

http://www.wealth-think.com/

http://www.hubbis.com

http://thomsonreuters.com/

© 2014 Thomson Reuters. 1006024 02/14.

Seek More. Profit More.Connect to the information, tools, and people you need to succeed. Anywhere, anytime.

Discover more profitable opportunities. Thomson Reuters Eikon® gives you access to the best mix of financial content and market-moving Reuters news, filtered by need, delivered at speed, and displayed graphically, so it’s easy to view, act on – and profit from. Via desktop or mobile, it lets you see and seize opportunities first – across assets, across liquidity venues, across the globe.

Try Thomson Reuters Eikon Free. For more information or a free Eikon trial, go to: thomsonreuterseikon.com

1006024_v1.indd 1 18/02/2014 15:36

WEALTH THINK 2014 1

Note of thaNks & foReWoRD

Wealth THINK 2014 was conceived and hosted at a time when the global wealth management industry finds itself at an unprecedented point in its history.

We have produced this publication to give you a sense of some of the most significant talking points. Some of the key take-aways included: • The future of the industry

depends on a sustainable model where clients pay for advice that is delivered by competent professionals

• Senior management needs to become more rational and focused in relation to the performance of front-line staff, said senior executives

• The traditional management approach of measuring a private banker’s performance based on

his or her ability to bring in new money to increase AUM, is no longer viable

• Technology-led game-changers and a realisation that organisations need to adapt to a new world order to stay relevant to clients of today and tomorrow suggests that the business of wealth management is set for an overhaul

• Advisory models will retain human interaction where guidance and expertise is needed, but will be supported by the use of digital solutions to ensure efficient execution and relevance of information

• Being an effective adviser to the multiple generations within an Asian family requires an ability to listen, understand, empathise, challenge (where necessary), and

then connect relevant third-party specialists

In addition to reading this publication, please do also visit the website – www.wealth-think.com – to also view various other content: video highlights, photos, videos of the Wealth TALKS and speaker bios. I hope you enjoy reading this and would very much like to see you at Wealth THINK 2015 – being held on Tuesday 22nd September at the Pan Pacific Hotel, Singapore.

I would greatly appreciate your feedback – please email me at:[email protected]

Andrew CrookeEditor, Hubbis

Published by Hubbis. Printed in October 2014 in Hong Kong. © Hubbis (HK) Limited 2014

All rights reserved. No portion of this book may be reproduced, duplicated or copied by any means without the prior written consent of the publisher. No legal responsibility can be accepted by the author or publisher for the content which appears in this publication.

Michael StanhopeChiefExecutiveOfficerHubbisT (852) 2563 8766E [email protected] www.hubbis.com

Thomson Reuters is delighted to exclusively partner with Hubbis to host the inaugural Wealth Think event. It was a tremendously successful event, providing a meeting ground for over 300 industry leaders and a platform for discussion and debate over the future of the wealth management industry. The discussions and presentations were both relevant and insightful, and I believe everyone took something valuable away with them.

We have worked closely with Hubbis since its establishment in 2010 to mutually support the Asian wealth management industry, delivering targeted, timely, independent and Asia specific content through highly-regarded events and publications. Thomson Reuters views Asia as one of the world’s most innovative regions for wealth related products and services and for that reason will continue to partner with Hubbis to enable customers to remain informed, connected and empowered.

We would like to thank the 300 senior individuals from the wealth management industry for attending Wealth Think 2014.

I hope you enjoyed the event and this document and I look forward to engaging with you in the future.

Richard TurnerHead of Market Development Asia, Financial & RiskThomson Reuters


WEALTH THINK 20142

CONTENTS

PANEL DISCUSSIONS

THE CHANgINg WOrLD Of WEALTH mANAgEmENT

The future of the Asian wealth management industry depends on a sustainable model where clients pay for advice that is delivered by compe-tent professionals, said panellists at Wealth THINK 2014 in Singapore in late September.

pANNEL SUMMARY - pAGE 12

FULL ARTICLE - pAGE 24

PUTTINg IN PLACE EffECTIvE PErfOrmANCE frAmEWOrKS

In an environment where being profit-able is now a much bigger challenge, senior management needs to become more rational and focused in relation to the performance of front-line staff, said panellists at Wealth THINK 2014 in Singapore in late September.

pANEL SUMMARY - pAGE 13

FULL ARTICLE - 28

mOvINg bEyOND THE TIPPINg POINT

Being more strategic and creating tangible points of differentiation is becoming increasingly urgent for wealth management organisations if they want a realistic chance of being profitable and lasting the course in Asia, according to panellists at Wealth THINK 2014 in Singapore in late September.



THE bUSINESS mODEL Of THE fUTUrE

Technology game-changers and a realisation that organisations need to adapt to a new world order to stay relevant to clients of today and tomorrow suggests that the business of wealth management in Asia is set for an overhaul, said panellists at Wealth THINK 2014 in Singapore in late September.


FULL ARTICLE pAGE - 36

HOW TO DELIvEr INvESTmENT PErfOrmANCE

Today’s investment climate is charac-terised by simpler product, new ways to view and price risk, and a need to differentiate by service, according to panellists at Wealth THINK 2014 in Singapore in late September.



ADvISOry mODELS & PLATfOrmS: DO THEy NEED TO bE rEbUILT?

The advisory model of the future will retain human interaction where guidance and expertise is needed, but will be supported more significantly by the use of technology and digital solutions to ensure efficient execution and relevance of information, according to panellists at Wealth THINK 2014 in Singapore in late September.



HOW TO mEET THE NEEDS oF bUSINESS-owNING fAmILIES

Panellists at Wealth THINK 2014 in Singapore in late September high-lighted the opportunity that exists in Asia for the wealth and profes-sional services communities to help business-owning families meet their corporate and personal needs – but only if they take a long-term view to servicing the patriarchs as well as the next generation.



DELIvErINg ADvICE THAT fAmILIES ACTUALLy WANT - ANd NEEd

Understanding, trust and partner-ship are three of the key ingredients for building relationships with Asian families if advisers are able to win the hearts and minds both of patri-archs and the next generation, said panellists at Wealth THINK 2014 in Singapore in late September.



EvENT SUmmAry

WEALTH THINK 2014: LIfTINg THE vEIL ON THE ASIAN OPPOrTUNITy

Hubbis’ inaugural Wealth THINK 2014, exclusively sponsored by Thomson Reuters, highlighted the key drivers, challenges and game-changers shaping global wealth management in the years to come.

HIGHLIGHT SUMMARY pAGE 8


WEALTH THINK 2014 3


WEALTH THINK 20144

CONTENTS

Richard TurnerHead of Market Development, AsiaFinancial & Risk

Thomson Reuters

Steven SeowHead of Wealth Management, Asia

Mercer

Urs Brutsch Managing Partner & Founder

HP Wealth Management

Francis Koh Vice Provost & DirectorMSc in Wealth Management Programme

Singapore Management University

Evelyn KohHeadofCompliance,AsiaPacificWealth Management and Singapore

RBC Wealth Management

Jonathan PaulConsultant

Decura

Andrew Chow Partner, Financial Services Regulatory

WongPartnership LLP

Conrad LimDeputyChiefExecutiveOfficer

LGT Bank

Andrew Niles Head of International Client Division

BOC International

Jakob NilssonHead of Business Development, Asia

Hermes Investment Management

Paul GamblesManaging Partner

MBMG Group

Marcel FuerstChiefInformationOfficer,Asia-Pacific

UBS Wealth Management

Mandeep Nalwa Founder,ChiefExecutiveOfficer

Taurus Wealth

Peter GillVice President, Banking & Financial Markets, ASEAN

IBM

Bert-Jan Van EssenCo-Founder, Managing Director

Dragon Wealth

Michael Levin Head of Asset Management Product and Head of Alternative Investments, Private Bank, Non-Japan Asia and Australia

Credit Suisse

Hans Goetti Head of Investment, Asia

Banque Internationale A Luxembourg

Bernard WaiManaging Director and Head of Private ClientSolutions,AsiaPacific

Citi Markets

Kylie ChanHead of Sales, Asia

Old Mutual Global Investors

Geoffroy GanshofHead of Wealth Management

EuroFin Asia Group

Simon HopkinsChiefExecutiveOfficer

Milltrust International

Bryan Henning Head of Global Research & Investments Asia

Barclays

Angel WuRegional Head Products & Solutions Private Banking Asia

ABN AMRO Private Banking

Gopi MirchandaniSenior Vice President, Business Development

Fullerton Fund Management

Harmen Overdijk Managing Partner

CAIDAO Wealth

Michael Coglin Executive Director, Head of Investments

CTCB Private Bank

Marc Van de WalleManaging Director, Global Head of Products

Bank of Singapore

Mark Smallwood Head of Franchise Development and Strategic Initiatives, APAC

Deutsche Asset & Wealth Management

Nigel RiversGlobal Head of Private Clients

TMF Group

Leonardo DragoChiefInvestmentOfficer

AL Wealth Partners

Benedict SheehyChiefOperatingOfficer

Branded Trust

Carolyn LengHead of Private Banking, Malaysia

CIMB Private Banking

Maikel Sajangbati, CWMChiefExecutiveOfficer&Founder

MCI

Evrard Bordier Managing Partner

Bordier & Cie

Eliza Ong Regional Head of Group Asset Management

RHB OSK Asset Management

Philipp Piaz Partner

Finaport

PANEL SPEAKErS

http://www.wealth-think.com/speakers.php?id=68































































































































































WEALTH THINK 2014 5

Pius ZgraggenChiefExecutiveOfficer

OLZ & Partners

Rajeev HassamalASEAN Lead for Wealth Management

Accenture

Richard Piliero Regional Executive

Finaport

Peter GolovskyManaging Director, Global Head of Private Clients

Amicorp Group

Sameer ChishtyPartner, Head of Global Wealth Management Practice

Bain

Hugh YoungManaging Director

Aberdeen Asset Management Asia

Noor Quek Founder / Managing Director

NQ International

Anthonia HuiChiefExecutiveOfficer

AL Wealth Partners

Marcel KreisChairman

Hubbis

Angelo VenardosChiefExecutiveOfficer

Heritage Trust Group

Ranjit Tinaikar Managing Director, Advisory and Investment Management Financial and Risk

Thomson Reuters

Paul Smith, CFAManagingDirector,AsiaPacificGlobalHead, Industry Relations

CFA Institute

Simon Cox Managing Director and Investment Strategist,AsiaPacific

BNY Mellon Investment Management

Paul HodesManaging Director, Head, Wealth Management, Consumer BankAsiaPacific

Citibank

Kees Stoute Founder

Sonam

Nick PollardHead of International Learning and Development

Coutts

Peter ScottGeneralManager,AsiaPacific

Avaloq

Jay JhaveriHead of Business Development, Asia

Wealth-X

Vish JainFormer Partner and Managing Director

BCG

Adam James ReynoldsChiefExecutiveOfficer,AsiaPacific

Saxo Capital Markets

Nicholas Hacking Director, Sales

ERI Bancaire SA

Mark KonynChiefExecutiveOfficer

Cathay Conning Asset Management

Jan SchochChiefExecutiveOfficer

Leonteq Securities AG

Gerard LeeChiefExecutiveOfficer

Lion Global Investors

Mohammed ZaidiPortfolio ManagerPrincipal Global Equities

Principal Global Investors

Lawrence Grinceri ChiefOperatingOfficer

AG Delta

David Green-MorganGlobal Capital Markets Research Director

Jones Lang LaSalle

Peter HuberChiefExecutiveOfficer

Zurich Global Life Singapore

Rachel ArmstrongBureau Chief, Singapore, News & Editorial

Thomson Reuters

Catherine TillotsonManaging Partner

Scorpio Partnership

Toine KnippingChiefExecutiveOfficerandCo-Founder

Amicorp Group

Tan Su ShanManaging Director and Group HeadConsumer Banking and Wealth Management

DBS Bank

Juerg Steffen Managing Partner, Singapore

Henley & Partners

Seamus DonoghueChiefExecutiveOfficer

Allocated Bullion Solutions






















































































































































WEALTH THINK 20146

organisations which participated


2015

We greatly appreciate the support we received at Wealth THINK 2014 from – 300+ senior practitioners who attended70+ speakers who gave Wealth TALKS and joined panel discussions1 exclusive sponsor – Thomson Reuters

Next year – based on feedback from our partners – we plan to refresh and enhance the event in several ways:

Host the event in 1 room only

Continue to limit Wealth TALKS to 10 minutes – but allocate

time for 5 minutes of Q&A

Reduce each panel discussion to 35 minutes – with a maximum of 5 speakers

Encourage more active debate during the panels – by positioning topics and speakers with opposing view

Engage delegates in advance through an app, online content, and pre-event surveys

Targeted post-event follow-up content tailored to the interests of each delegate

What do you think?

We would really like to hear your feedback

Email us at [email protected]

mailto:wealth-think%40hubbis.com?subject=

WEALTH THINK 20148

EVENT SUMMARY

Hubbis’ inaugural Wealth THINK 2014, exclusively sponsored by Thomson reuters, highlighted the key

drivers, challenges and game-changers shaping global wealth management in the years to come.

WEALTH THINK 2014: LIfTINg THE vEIL ON THE ASIAN OPPOrTUNITy

Conceived and hosted at a time when the global wealth management industry finds itself at an unprecedented point in its history – Wealth THINK 2014, held in Singapore in late September, discussed and debated what the future holds for wealth management globally and also in Asia.

Over 70 high-profile practitioners provided insights to more than 300 senior individuals from across Private Banking, Independent Wealth Management, Retail Banking, Asset

Management, Insurance, Technology and Professional Services.

A new world order in wealth management

An overriding theme that speakers highlighted was that the future of the industry depends on a sustainable model where clients pay for advice that is delivered by competent professionals. No longer can the dominant approach be transaction-led advice.

Yet some speakers raised questions over whether the industry wants to change, or even if it can, given cost-income ratios.

Regardless, there is an urgency to move to a model where the client pays for advice. And the winners in this industry will be those firms which can command a fee for advice, rather than relying on transaction income.

Part of the pressure for this is also coming from the realisation that execution is a commodity, and with various electronic alternatives to using a bank or adviser, the chances of making money from

“The future of the industry depends on a sustainable model where clients pay for advice delivered by competent professionals. No longer can the dominant approach be transaction-led advice”


WEALTH THINK 2014 9

transaction-led clients are getting ever-slimmer, added speakers.

more rationality and profitability

While being profitable remains a big challenge, senior management needs to become more rational and focused in relation to the performance of front-line staff, said senior executives.

The traditional management approach of measuring a private banker’s performance based on his or her ability to bring in new money to increase AUM, is no longer viable within an industry which is trying to be profitable amid falling revenues at the same time as costs escalate.

Increasingly, therefore, as margins have shrunk, the ability of advisers to generate revenue is at the forefront.

And after the 2008 financial crisis, compliant behaviour in the pursuit of these goals has moved to the centre stage, said speakers.

Another key driver of a successful private banking and wealth management organisation will be differentiation, they added.

Indeed, being more strategic and creating tangible points of differentiation is becoming increasingly urgent for wealth management organisations if they want a realistic chance of being profitable in order to last the course in Asia.

And once achieved, there can be greater confidence within the industry that the advice is good enough that clients will pay for it.

Ultimately, agreed speakers, technology game-changers and a

realisation that organisations need to adapt to a new world order to stay relevant to clients of today and tomorrow suggests that the business of wealth management is set for an overhaul.

Investment and advisory models

From the perspective of investment performance, speakers highlighted that today’s investment climate is characterised by simpler product, new ways to view and price risk, and a need to differentiate by service.

In fact, there are three core investment themes which are shaping the current investment landscape: a mispricing of risk; a search for yield; and policy divergence.

At the same time, the role of central banks has grown significantly, to the point where almost every asset class is now influenced by central bank policies, with asset price inflation despite the lack of price signals. As a result, many of the traditional methods of looking at fundamentals and technicals are no longer relevant.


WEALTH THINK 201410

EVENT SUMMARY

When looking more broadly at the advisory model of the future, speakers predicted that while it will retain human interaction where guidance and expertise is needed, it will be increasingly supported by the use of technology and digital solutions to ensure efficient execution and relevance of information.

Successful advisory models and platforms are evolving in line with the changing needs and increasing desire of clients towards a faster, more efficient, more consistent and more customised offering, added practitioners.

As this happens, the extent to which technology will play a more prominent role will depend on the customer segment, product type and individual preferences in relation to the delivery channels.

managing family wealth

Speakers also highlighted the opportunity that exists in Asia for the wealth and professional services communities to help business-owning families meet their corporate and personal needs – but only if they

take a long-term view to servicing the patriarchs as well as the next generation.

The attraction of this customer segment is clear given the combination of the corporate needs they have for their businesses, as well as their personal needs.

The opportunity is even larger as a result of the vast generational movement of wealth underway in Asia. This makes it essential to facilitate the right structuring for families as part

of the wealth transfer process for their assets.

In the context of taking advantage of this, being an effective adviser to the multiple generations within an Asian family requires an ability to listen, understand, empathise, challenge (where necessary), and then be able to connect the relevant third-party specialists.

“When looking at the advisory model of the future, speakers predicted that while it will retain human interaction where guidance and expertise is needed, it will be increasingly supported by the use of technology and digital solutions to ensure efficient execution and relevance of information”

WEALTH-THINK 2015 5

SUMMARY

Invite only

wealth-think.com

350+ Delegates NetworkingThought-leadership

22nd September 2015, Singapore

of tomorrowShaping wealth management

2015


WEALTH THINK 201412

PANEL HIGHLIGHTS


Key drivers for the future

• The future of the Asian wealth management industry depends on a sustainable model where clients pay for advice that is delivered by competent professionals

• The business model needs to move from one which is transaction-led to being advice-led

• Pressure is also coming from the realisation that execution is a commodity, and that there are various electronic alternatives

• A re-design of the incentive system for financial organisations is needed

• The winners in the industry will be those firms which can command a fee for advice and don’t rely on transaction income

Addressing many challenges

• Organisations need to improve the way they integrate business processes such as KYC

• Making more of “digital” is key – in terms of how to use the information to generate insights about clients and making it accessible to RMs

• A lot more information needs to be included as part of client reporting – to give ongoing evaluation about how much risk is being taken within portfolios

• Providing private banking service to clients is getting more challenging in line with regulatory developments in Singapore on the definition of accredited investors

All about competency

• The business is all about providing competent advice, but this is only possible if there is consistency

• A trusted wealth management adviser needs to meet the criteria of five Cs: client-centric, communicative, compliant, connected, and competent

• The industry needs to invest in more in-house training

value-adding

• There is a need for banks to be more creative from an investment perspective

• There is more of a role for technology in terms of data analytics – to provide a lot of insights into customer behaviour

Urs Brutsch

HP Wealth Management

Pius Zgraggen

OLZ & Partners

Francis Koh

Singapore Management

University

Rajeev Hassamal

Accenture

Evelyn Koh

RBC Wealth Management

Jonathan Paul

Asia Pacific Advisors

“The winners in this industry will be those firms which can command a fee for advice and don’t rely on transaction income”

Panel speakers
















WEALTH THINK 2014 13


Shifting performance measures

• It is no longer viable for management to measure a private banker’s performance on new money to increase AUM

• As margins have shrunk, the ability to generate revenue is more important

• Post-2008, compliant behaviour in the pursuit of assets and revenue has moved to the centre stage

• Most organisations now won’t just pay a banker on achieving asset growth

A profession

• Viewing private banking as a profession changes how individuals are benchmarked

• If bankers help clients achieve their financial goals, such as educating their children and fulfilling their objectives, this should be seen as “success”

• Revenue generation alone is not enough – today’s bankers need to really understand the rules and regulations

Distinguishing bankers

• The industry needs to be able to define “good” and “bad” bankers – and then how to plug the gaps

• Assessing the performance of an RM needs to be done in the context of the customer segment they are servicing and the market they are operating in

Dealing with under-performers

• The last few years have seen banks scrutinising employee performance a lot more closely

• Some banks have been assessing agreed-upon objectives with a view to encouraging employees to move on in cases where they have not reached them

Engaged in education

• Rapid industry growth has attracted a lot of people into advisory positions who probably lack the right personalities

• A good private banker identifies for a client the need they have but which they haven’t thought about

• Individuals will be more motivated to undertake the requisite training if they feel that it adds to their level of competency – rather than just do compliance training

Marcel Kreis

Hubbis

Richard Piliero

Finaport

Andrew Chow

WongPartnership LLP

Steven Seow

Mercer

“most organisations wouldn’t just pay a banker on achieving asset growth”

Panel speakers

REAd FULL ARTICLE - pAGE 28










WEALTH THINK 201414

PANEL HIGHLIGHTS


being profitable

• A critical strategic issue for wealth management organisations in Asia today is making sure they are doing profitable business

• Too many industry players try to present themselves as being all-things-to-all-people

• Organisations need to properly understand their brand and promise – and to be able to actually deliver on that

• Building a successful business in the region is about scale in terms of AUM and footprint

Creating sustainability

• There is a lack of differentiation across most organisations

• Banks need to create more clearly differentiated models for individual segments or countries, to focus on servicing the needs of the specific segments

• Many players are in the process of assessing all their business lines to divide them into core or non-core – to determine the best way to deliver the service going forward

Capitalising on global trends

• Changes in relation to rules around exchange of information and other regulations are a good example of the potential for winning new business

• Tax transparency and general regulatory uncertainty are forcing clients to review the robustness of their current structures

• From an investment perspective, there is a tremendous flow of assets out of Asia into developed markets, as well as cross-border flows involving China

• There is an expectation of the internationalisation of the RMB

• There is a desire to develop outcomes rather than individual products

meeting challenges

• Organisations need to respond to new requirements which are emerging

• To deal with the regulatory burden, there is a need for greater investment in administration and compliance systems to be more efficient in the way they do business

• Banks need to be aware of the drivers for moving funds across borders – for confidentiality, custody and safety, rather than to invest

Andrew Niles

BOC International

Conrad Lim

LGT Bank

Jakob Nilsson

Hermes Fund Managers

Peter Golovsky

Amicorp Group

Paul Gambles

MBMG Group

“building a successful business in the region is about scale in terms of AUm and footprint”

Panel speakers














In need of disruption

• Technology can be seen as a large cost yet an impediment where it doesn’t help an organisation differentiate itself

• Yet for private banks not spending money on innovation, they might suffer from a lack of differentiation

• The personalisation of information is something which is clearly missing from today’s wealth proposition

• Most organisations are not sure how to move into the digital space

• There is an urgent need for organisations to apply effective

analytics to properly understand information and be able to customise it for an individual client

• Technology can bring much-needed transparency – both in terms of performance and quality of advice

• Those firms which proactively fragment the value chain and focus on their strengths will be the winners as they can innovate and promote much higher quality services

being relevant

• One of the most critical successful factors going forward is the ability to bring relevant solutions to clients

• Digital wealth is about understanding client behaviour to identify the next best thing for them to buy

• “Crowd” performance will become more important going forward

• There is a desire by organisations to take what they have learnt in the high-end market and scale this out for the wider segment

• A consumerisation of wealth management will take place in Asia

• One of the only ways to tap these opportunities is by having an open mind and willingness to partner with various industry players

Marcel Fuerst

UBS Wealth Management

Mandeep Nalwa

Taurus Wealth Advisors

Peter Gill

IBM

Bert-Jan van Essen

Dragon Wealth

Richard Turner

Thomson Reuters

Jan Schoch

Leonteq Securities AG

Benedict Sheehy

Branded Trust

“Those firms which proactively fragment the value chain and focus on their strengths will be the winners as they can innovate and promote higher quality services. This is one of the biggest opportunities in the financial sector for the past 100 years”

Panel speakers
















WEALTH THINK 201416

PANEL HIGHLIGHTS


Investment themes

• Three core investment themes are shaping the current investment landscape: a mispricing of risk; a search for yield; and policy divergence

• Almost every asset class is now influenced by central bank policies

• Investors are giving up a lot in terms of credit risk for the incremental yield

differentiation

• Simplicity and ease of transactions have become common factors in the market today

• Post-2008, the industry has moved towards providing more commoditised products

• Plus, more Asian clients are focusing on products outside of the region, especially in the US markets

• Differentiation is most likely to come via the service offering

• Using specialist managers is one way to differentiate

finding yield

• Private lending offers attractive yields, for example in trade finance

• International investors are underweight emerging markets

• While fixed income appears to be safe, this is far from true in practice

Changing priorities

• Clients are now much more conscious of risk

• Investors are also more receptive to new asset cases and strategies which can help them diversify

• Investors are more realistic in their returns expectations

Evolving product offerings

• Selecting the right investment strategy is more important than the individual product

• Less liquid strategies are attractive, leading to a blending across structures and liquidity profiles to enhance the amount of diversification that can be achieved

Michael Levin

Credit Suisse

Hans Goetti

Banque Internationale

A Luxembourg

Bernard Wai

Citi Markets

Kylie Chan

Old Mutual Global Investors

Geoffroy Ganshof

EuroFin Asia Group

Simon Hopkins

Milltrust International

“The role of central banks has grown significantly, to the point where every asset class is now influenced by central bank policies”

Panel speakers

















differentiated advice

• The two key differentiators that set advisory processes and platforms apart are service and advice

• Client engagement can come via timely updates with market information, and a mix between tactical trading ideas balanced against holistic advice

• It is important to be there for the client when things go wrong

• The ability to give good advice in private banking is all about understanding the client

• Good advice focuses more on risk than return

• Adding local colour to make the offering Asia-specific is another component of a successful advisory process

A role for technology

• There is a danger of under-estimating just how tech-savvy today’s clients are

• While a lot of banks are trying to automate the advisory process to enhance efficiencies, it needs to be made relevant to every client

• Yet since one of the most important things in the advisory process is being able to get ideas across to clients, smart delivery channels using digital solutions are essential

The path to automation

• Automation and technology is most likely to have an impact in facilitating the delivery of flow product, such as FX and certain types of structured products

• Technology can help ease the burden of the front-line in dealing with compliance requirements and knowing which information is most relevant in different situations for different clients

• The need to embrace new delivery channels to disseminate the right information is important to servicing the next generation

fee considerations

• Shrinking margins are another driver or consideration in relation to boosting spending on technology

• Transaction-based firms will need to invest heavily in technology to free up expensive resources to understand clients and charge for value-added services they provide

Bryan Henning

Barclays

Angel Wu

ABN AMRO Private Banking

Gopi Mirchandani

Fullerton Fund Management

Michael Coglin

CTCB Private Bank

Marc Van de Walle

Bank of Singapore

Harmen Overdijk

CAIDAO Wealth

Seamus Donoghue

Allocated Bullion Solutions

“There is a need to use technology solutions to send very specific investment ideas to individual clients based on their profile and objectives”

Panel speakers
















WEALTH THINK 201418

PANEL HIGHLIGHTS

HOW TO mEET THE NEEDS Of bUSINESS-owNING FAMILIES

The opportunity in family wealth

• Business-owning families have both corporate and personal needs

• There is vast generational movement of wealth underway in Asia

• It is essential to facilitate the right structuring for families as part of the wealth transfer process for their assets

guiding discussions with families

• Within Asian families, the founder of the business essentially controls everything

• Being all things to all types of families isn’t the answer

• One of the most pressing issues is what to do with the family business – who will and won’t be involved

• There is often a need to reconcile differences by acting as mediators between the generations

• A critical part of advising wealthy families is managing emotions

finding the right partners

• Families need someone who can draw in and coordinate those specialists which are competent in the areas that the families need to execute

• A lot of the large financial institutions don’t offer the most appropriate platform to service a family’s overall needs – including governance, tax and succession planning

• Credibility, competency and contacts are all key

Delivering connectivity

• There is growing scope to connect families with opportunities and networks elsewhere in the region, and also globally

• For UHNW clients, family members and assets reside in multiple jurisdictions, and want to invest around the world

• Business-owning families are interested in liquidity

Mark Smallwood

Deutsche Asset & Wealth

Management

Nigel Rivers

TMF Group

Leonardo Drago

AL Wealth Partners

Maikel Sajangbati

MCI

“The portfolio accounts are relatively easy to deal with, but what to do with the family business and how to engage with other members of the family, as well as issues relating to who will and won’t be involved, are among the key considerations”

Panel speakers












DELIvErINg ADvICE THAT fAmILIES ACTUALLY wANT - ANd NEEd

Cultural considerations

• Individual cultures can play a key role in what advice is suitable for different families

• It is essential to listen to what concerns them and what they want, as well as how they want to do things – and with whom they are comfortable

• Understanding these differences can help give more confidence about advising families in a more relevant way

business succession

• One of the first steps involves assessing the family’s human capital – and identifying who is competent enough to carry on running the family business

• There must also be a framework for running the business

• The solution in various cases is professional management – as the second or third generation doesn’t always feel the same attachment to the family business

• The next generation tends to be more open to solutions to either cash-out, or take on a figurehead role and let professionals run the day-to-day operations

• Diversity on the board, including the mother or daughter, tends to lead to a smoothening of emotions

• There is a trend, post-2008, of the first generation realising it should listen a bit more to the younger generation

forging partnerships

• Many families feel discomfort in relation to what they need to do in the investment world

• A lot of clients appreciate having a partner who is there to bounce ideas off

• In addition to a boutique offering – a universal banking group can tap into the services and products within the various units across the institution

• Working with a third-party can create some concerns about control over assets and the reporting around them

• Track record is also important to Asian families

Carolyn Leng

CIMB Private Banking

Philipp Piaz

Finaport

Noor Quek

NQ International

Evrard Bordier

Bordier & Cie

Anthonia Hui

AL Wealth Partners

Eliza Ong

RHB OSK Asset Management

“my personal experience has taught me that regardless of nationality and culture, these clients need someone who can listen to them and, as an outsider, be impartial to bridge the understanding gap which often exists”

Panel speakers














WEALTH THINK 201420

PANEL FEATURE


These include the best wealth management

forums of their type in each local market in Asia –

including Hong Kong, China, Singapore, Malaysia,

Indonesia, Thailand, India and Taiwan.

Since late 2010, 9,500 delegates have attended

more than 80 successful conferences, seminars

and thought-leadership discussions. These forums

are designed to give market practitioners the

opportunity to enhance their market knowledge,

product expertise and advisory skills.

The events cover a wide variety of industry

themes, including private banking, indpendent

wealth management, compliance & regulation,

wealth planning and technology within

wealth management.

Delegates include senior management, product

gatekeepers and senior advisers from the largest

wealth management firms in each location, as well

as key personnel in compliance, operations, risk

management, technology and HR. Event reports,

articles, interviews, videos and multi-media

presentations are distributed across our full

database following these forums.

JANUARY

ForumCompliance in Asian Wealth Management ForumThursday 22nd January, Pan Pacific, Singapore

High-Impact BriefingAlternative investmentsTuesday 27th January, Hong Kong

PublicationAsset Management Yearbook

FEBRUARY

ForumAsian Wealth Management ForumThursday 12th February, Conrad, Hong Kong

High-Impact BriefingStructured productsThursday 26th February, Singapore

MARCH

ForumBuilding the Skills You Need for Success inWealth ManagementTuesday 10th March, Pan Pacific, Singapore

ForumIndependent Wealth Management ForumThursday 12th March, Pan Pacific, Singapore

High-Impact BriefingCommoditiesTuesday 17th March, Hong Kong

High-Impact BriefingStaying compliantTuesday 24th March, Hong Kong

ForumTaiwan Wealth Management ForumThursday 26th March, Le Meridien, Taipei

PublicationIndependent Wealth Management in Asia

APRIL

ForumIndian Family Wealth ForumTuesday 7th April, Mumbai

High-Impact BriefingIncome strategiesThursday 9th April, Singapore

High-Impact BriefingReal assetsTuesday 28th April, Hong Kong

PublicationFamily Wealth in Asia

PublicationRedefining the Digital Evolution in Wealth Management

MAY

ForumAsian Wealth Management ForumThursday 7th May, Pan Pacific, Singapore

High-Impact BriefingCommoditiesThursday 14th May, Singapore

HUBBIS HOSTS PROFESSIONAL & INTERACTIVE EVENTS OF VARYING SCALE

OCTOBER

High-Impact BriefingTax complianceThursday 1st October, Singapore

High-Impact BriefingDPMWednesday 7th October, Hong Kong

High-Impact BriefingAlternative investmentsThursday 15th October, Singapore

ForumIndonesian Wealth Management ForumThursday 22nd October, Four Seasons Hotel, Jakarta

ForumSWISS-ASIA Wealth ExchangeThursday 29th October, Crowne Plaza, Zurich

PublicationSpecial Report on Insurance in Asia

PublicationWealth Management in India

NOVEMBER

ForumAsian Family Wealth ForumThursday 5th November, Pan Pacific, Singapore

ForumRedefining the Digital Evolution in Wealth ManagementThursday 12th November, Four Seasons Hotel, Hong Kong

High-Impact BriefingTax complianceTuesday 24th November, Hong Kong

ForumChina Wealth Management ForumThursday 26th November, Grand Hyatt, Shanghai

PublicationSWISS-ASIA Wealth Exchange

PublicationSpecial Report on Emerging Markets

PublicationWealth Planning

DECEMBER

High-Impact BriefingAccessing China’s growing wealthTuesday 1st December, Hong Kong

High-Impact BriefingReal assetsThursday 3rd December, Singapore

High-Impact BriefingTaking the IAM industry to the next levelTuesday 8th December, Hong Kong

High-Impact BriefingTaking the IAM industry to the next levelThursday 10th December, Singapore

PublicationAdviser Technology in Asian Wealth Management

PublicationSpecial Report on Alternative Investments

PublicationSpecial Report on Commodities

ForumThailand Wealth Management ForumThursday 21st May, Four Seasons Hotel, Bangkok

ForumPhilippines Wealth Management ForumThursday 28th May, Shangri-La Hotel, Manila

PublicationIndian Family Wealth

JUNE

High-Impact BriefingStaying compliantThursday 4th June, Singapore

High-Impact BriefingWealth structuringTuesday 9th June, Hong Kong

High-Impact BriefingStructured productsWednesday 10th June, Hong Kong

High-Impact BriefingDPMTuesday 16th June, Singapore

ForumRedefining the Digital Evolution in Wealth ManagementThursday 18th June, Pan Pacific, Singapore

ForumMalaysian Wealth Management ForumThursday 25th June, Le Meridien, Kuala Lumpur

PublicationSwiss Private Banking & Wealth Management

JULY

PublicationWealth Management in Asia

PublicationWealth Management in Malaysia

AUGUST

ForumIndian Private Banking ForumThursday 27th August, Mumbai

PublicationSpecial Report on Equities

SEPTEMBER

High-Impact BriefingIncome strategiesTuesday 1st September, Hong Kong

ForumVietnam Wealth Management ForumThursday 10th September, Melia Hotel, Hanoi

ForumWealth THINKTuesday 22nd September, Pan Pacific, Singapore

ForumBuilding the Skills You Need for Success in Wealth ManagementWednesday 30th September, Pan Pacific, Singapore

PublicationSpecial Report on Investment Advice

PublicationSpecial Report on Income

WEALTH THINK 201424

PANEL DISCUSSION

The future of the Asian wealth management industry depends on a sustainable model where clients

pay for advice that is delivered by competent professionals, said panellists at Wealth THINK 2014 in

Singapore in late September.

Panellists at Wealth THINK 2014 in Singapore in late September reflected broad industry thinking when they agreed that the business model needs to move from one which is transaction-led to being advice-led.

“This has been said for many years, so either the industry doesn’t want to change, or perhaps it cannot change with cost-income ratios where they are,” said Urs Brutsch, managing partner & founder at HP Wealth Management.

Regardless, he added, there is an urgency to move to a model where the client pays for advice. Part of the pressure for this is coming from the realisation that execution is a commodity, and with various electronic alternatives to using a bank or adviser, the chances of making money from transaction-led clients are getting ever-slimmer.

According to Pius Zgraggen, chief executive officer of OLZ & Partners, the primary goal is to produce at the lowest possible price a product which the customer wants.

Yet clients often have the wrong expectations – as a result, he

explained, of the way the product is positioned and sold, and it isn’t clear if it meets the needs of the customers. This creates a conflict of interest between the industry and end-clients, he added.

Change will only come if there is enough pressure, said Zgraggen. “I don’t think this should come from regulators, but rather the clients themselves.”

The key driver of a successful private banking and wealth management organisation, therefore, will be

differentiation. “We need to be confident that our advice is good enough that clients will pay for it,” explained Brutsch. “The winners in this industry will be those firms which can command a fee for advice and don’t rely on transaction income.”

A re-design of the incentive system for financial organisations would help, suggested Zgraggen.

“If we look at technological developments like mobile phones since the 1970s, we have seen an incredible evolution,” he explained.

Urs brutsch HP Wealth management

“The winners in this industry will be those firms which can command a fee for advice and don’t rely on transaction income”





“What evolution has there been in asset/wealth management?”

Addressing many challenges

Amid the various challenges the industry is grappling with as it looks to re-shape both the model and the mind-set going forward, panel speakers highlighted several areas for consideration.

Some of the issues that Rajeev Hassamal, ASEAN lead for wealth management at Accenture, said he talks to organisations about include: how to integrate business processes

such as know-your-customer; how to educate relationship managers (RMs) to provide quality advice; how to provide timely and relevant information for clients; and how to make the advisory process consistent.

Making more of the “digital” trend is also a key goal. This is specifically in terms of how to use the information to generate insights about clients and make it accessible to RMs, added Hassamal.

Another of the areas within the private banking value-chain which needs attention is client reporting,

said speakers. According to Jonathan Paul of Asia Pacific Advisors, there is a limit to the extent of the thoughtful analysis which goes into the regular reporting. In his opinion, a lot more information needs to be included. “The current reporting doesn’t give me any ongoing evaluation about how much risk I am taking within my portfolio,” he explained. “Most investors would need this information.”

This shows a pitfall in terms of the client experience, too. The quality seems to be down to luck, depending on which adviser a client gets.

francis Koh Singapore management University

“Understanding differences [between families] can help give more confidence about advising them in a more relevant way”

Pius ZgraggenOLZ & Partners

“I don’t think change should come from regulators, but rather the clients themselves”

Jonathan Paul Asia pacific Advisors

“The current reporting doesn’t give me any ongoing evaluation

about how much risk I am taking within my portfolio”





WEALTH THINK 201426

PANEL DISCUSSION

Against the backdrop of the mounting compliance and regulatory challenges, one of the latest issues confronting the wealth management industry in Singapore relates to the definition of accredited investors (AIs).

There is a difference between this and the definition of HNW individuals, said Evelyn Koh, head of compliance, Asia Pacific wealth management, and Singapore, at RBC Wealth Management. And that looks likely to impact those private banks which are not affiliated with a consumer bank.

All about competency

Speakers generally agreed that there is no substitute for competency.

The business is all about providing competent advice, but this is only possible if there can be consistency, explained Francis Koh, vice provost (special projects) and director, MSc in Wealth Management Programme at the Singapore Management University (SMU).

According to Koh, a trusted wealth management adviser needs to have five Cs – so that he or she must: be client-centric and put the interest of clients above all; be communicative with clients in good times and in bad; be compliant with corporate and regulatory guidelines; be connected and up-to-date with market developments; and, very importantly, be competent and capable, possessing both soft and hard skills.

Getting to that point relies on the wealth management industry investing in more in-house training and development, said Koh at SMU, and for individual wealth managers to invest in continuous learning.

By extension, he added, more funds will flow into discretionary portfolio

management as well as investment advisory management.

value-adding

With investors increasingly accessing commoditised products via electronic channels, and combined with the low interest rate environment, there is a need for banks and advisers to be a bit more creative from an investment perspective.

Some private banks are doing more club-style transactions, said Paul, making assets previously hard to find more accessible.

“[The focus on digital needs to be] how to use the information to generate insights about clients and making it accessible to RMs”

Evelyn KohrbC Wealth management

“The question is how the private bank will be run…. Will there be an AI model as well as meeting the non-AI criteria”

The appeal of these grows when management at the bank put some of their own money into these types of deals. “Then they become more interesting as a proposition.”

There is also much more of a role within wealth management generally for technology in terms of data analytics. “This can provide a lot of insights into customer behaviour,” said Koh at SMU. In particular, in an environment where a client chooses between three or four banks or other advisers, organisations need better segmentation. Koh said this can be driven by better analytics.

rajeev Hassamal Accenture



WEALTH THINK 201428

PANEL DISCUSSION

rajeev Hassamal AccentureIn an environment where being profitable is now a much bigger challenge, senior management needs

to become more rational and focused in relation to the performance of front-line staff, said panellists

at Wealth THINK 2014 in Singapore in late September.

Traditionally, a private banker’s performance from a management point of view has been based on his or her ability to bring in new money to be able to increase assets under management (AUM).

Yet this is no longer viable within an industry which is trying to be profitable amid falling revenues at the same time as costs are rising, said panellists at Wealth THINK 2014 in Singapore in late September.

And after the 2008 financial crisis, compliant behaviour in the pursuit of these goals has moved to the centre stage, said Marcel Kreis, chairman of Hubbis.

As a result, most organisations now won’t just pay a banker on achieving asset growth.

viewing it as a profession

Important to the focus on performance and management of relationship managers (RMs) is the need to view private banking as a

profession. While there is a lot of work to do at all levels within the industry to achieve this, having that perspective in the first place should change how individuals are benchmarked.

“When I was mentoring private bankers, I would ask clients if we were their number-one bank, and if not, why not,” said Richard Piliero, regional executive at Finaport.

“That is the real measure of success – not revenue.” For example, he explained, if bankers help clients

marcel KreisHubbis

“Most organisations wouldn’t just pay a banker on achieving asset growth”


“Traditionally, a private banker’s performance from a management point of view has been based on his or her ability to bring in new money to increase assets under management (AUm). yet this is no longer viable”

Increasingly, therefore, as margins have shrunk, the ability to generate revenue is at the forefront.



achieve their financial goals, such as educating their children and fulfilling their objectives, then that should be seen as “success”.

It is also important to consider the extent to which compliance operates to help a bank maintain its reputation, said Andrew Chow, partner, financial services regulatory at WongPartnership LLP.

Today’s bankers need to really understand the rules and regulations, he said.

Distinguishing bankers

According to Steven Seow, head of wealth management at Mercer in Asia, the talent set within wealth management institutions in Asia tends to be quite different.

What’s needed, he said, is the ability to define what a “good” banker is, and what a “bad” banker is. “We then need to identify if it is down to a competency issue or an attitude issue,” said Seow. And further, if it is down to competency, it is important to assess which skills are lacking.“At Mercer, we find different banks

have different strategies to deal with their people,” he added. “Some of them, for example, use different delivery channels to put more information in the hands of the bankers.”

Seow puts winning client trust down to two factors: likeability and competency. Yet being adaptable to the individual is essential, too.

For example, a banker will need to spend a lot of time with Chinese clients before they will show any trust and it becomes realistic to start talking business.

richard Piliero finaport

“When I was mentoring private bankers, I would ask clients if we were their number-one bank, and if not, why not”

Andrew Chow WongPartnership LLP

“Today’s bankers need to really understand the rules and regulations”

“If bankers help clients achieve their financial goals, such as educating their children and fulfilling their objectives, then that should be seen as ‘success’”

Revenue generation alone is not enough, he explained.

Cost reduction via an effective compliance and legal strategy will ensure that individuals don’t fall foul of the regulators.

Various other factors should be taken into account when assessing a banker’s performance, added Piliero.

These include: whether they are providing value-added products and services; how many visits there have been for trusts and estate planning; how many times the investment specialist joined the meeting to talk about discretionary mandates; and also how many clients were introduced to the treasury department.



WEALTH THINK 201430

PANEL DISCUSSION

In markets like Singapore, meanwhile, it is more of a business-like discussion from the start, said Seow.

As a result, assessing the performance of the RM needs to be done in the context of the customer segment they are servicing and the market they are operating within.

Dealing with under-performers

In line with the need to be more rational and raise the perception of the industry’s credibility, the last few years have seen banks scrutinising employee performance a lot more closely, said speaker.

At some banks, for example, this has included assessing agreed-upon objectives with a view to encouraging

more training and education is the most sensible allocation of resources.

Engaged in education

More broadly, training and development is a key part of raising the bar and professionalising the industry.

For example, said Kreis, the huge amount of growth in Asian wealth management has attracted a lot of people into advisory positions who probably lack the personalities to really be an adviser. A successful adviser is someone who takes a

Steven Seow mercer

“We find different banks have different strategies to deal with their people”

genuine interest in clients, in terms of how they think and function, including how they arrive at their investment decisions, agreed panellists.

They also need to update themselves all the time as the markets changes and the industry evolves.

As a profession, wealth managers should also develop more soft skills to deliver messages to clients and understand what they want. Indeed, Piliero said that during his hiring days,

“Individuals will be more motivated to undertake the requisite training if they feel that it adds to their level of competency. by contrast, too much of the current focus is on compliance training”

“In line with the need to be more rational and raise the perception of the industry’s credibility, the last few years have seen banks scrutinising employee performance a lot more closely”

employees to move on to another organisation in cases where they have either not reached them, or look unlikely to reach them.

In an industry today characterised by shrinking margins, banks can no longer afford to carry anyone who is not pulling their weight, added speakers.

Further, there is a need to review whether targeting lagging staff with

he looked for bankers which wanted to be within a learning environment. “A

good private banker identifies for a client the need they have but which they haven’t thought about,” he said.

Yet individuals will be more motivated to undertake the requisite training if they feel that it adds to their level of competency, said Kreis.

By contrast, too much of the current focus for front-line staff, along with other practitioners, is on compliance training.


WEALTH THINK 201432

PANEL DISCUSSION

being more strategic and creating tangible points of differentiation is becoming increasingly urgent

for wealth management organisations if they want a realistic chance of being profitable and lasting

the course in Asia, according to panellists at Wealth THINK 2014 in Singapore in late September.

A critical strategic issue for wealth management organisations in Asia today is making sure they are doing profitable business.

According to Andrew Niles, head of the international client division at BOC International, many industry players try to present themselves as being all-things-to-all-people.

However, added Niles, along with some of his fellow panellists at Wealth THINK 2014 in Singapore in late September, there is instead a more pressing need to focus on a more efficient delivery of products and services to clients.

Taking that approach can also help organisations to determine what they are best at.

Delivering on Asia’s promise

With a real “wall of money” that is looking likely to continue growing, Paul Gambles, managing partner at MBMG Group, advised organisations in Asia to properly understand their brand and promise.

And then they need to be able to actually deliver on that.

According to Peter Golovsky, managing director, global head of private clients at Amicorp Group, building a successful business in the region is about scale in terms of AUM and footprint.

It also requires a focus on the right channel and segment, he added, as well as product differentiation – which includes ensuring independence of advice and also justifying the fees charged.

However, added Conrad Lim, deputy chief executive officer at LGT Bank in

Singapore, what a client experiences will often depend on the quality of the individual relationship manager (RM).

More specifically, he explained, that means the interactions that take place between people, rather than institutions or brand names.

being more profitable

For institutions to create profitable, sustainable businesses, speakers said the industry will reach a certain scale at some point. But the real question is: can firms last until that

Andrew Niles bOC International

“Banks try to present themselves as being all-things-to-all-people”




time comes? In turn, this exposes a lack of differentiation across most organisations.

For instance, customers in different wealth segments behave very differently, yet it is still very unusual to see business strategies which are focused on distinct segments.

This is despite the fact that doing so would create a competitive advantage for those organisations.

According to speakers, therefore, banks need to create more clearly differentiated models for individual

process of assessing all its business lines to be able to divide them into core or non-core.

This is factoring in decisions about whether to change the way they deliver the service, he explained. That might be outsourcing up to certain thresholds, or sometimes completely.

According to Jakob Nilsson, head of business development at Hermes Fund Managers in Asia, some of the initiatives his firm is involved in for institutional clients are also relevant for the private banking space.

For example, in terms of differentiation, he said that as a manufacturer of product which tends to be high-performing, he has found success by coming to market with a different branding than most fund managers.

This is based on what he said he observes as a desire by banks on the product side to give clients new ideas, as well as the well-known offerings.

Capitalising on global trends

Changes in relation to rules around exchange of information and other

Conrad LimLgT bank

“What a client experiences depends on the quality of the [RM]”

Jakob NilssonHermes fund managers

“There is a desire to develop outcomes rather than individual products”

“Customers in different wealth segments behave very differently, yet it is still very unusual to see business strategies which are focused on distinct segments. This is despite the fact that doing so would create a competitive advantage for those organisations”

segments or countries, to service the needs of the specific segments.

Those institutions which can achieve this have been shown – via reports by The Boston Consulting Group, for example – to have far higher levels of profitability.

Banks also need to identify and target opportunities from various emerging market trends.

According to Golovsky, there isn’t a private bank which Amicorp has been speaking to which is not in the



WEALTH THINK 201434

PANEL DISCUSSION

regulations are also a good example of the potential for winning new business – in this case in relation to trust structures and other solutions.

As someone who looks after international wealth flowing from outside the region into Asia, Niles said he sees the various regulations, tax transparency and general uncertainty as forcing clients to review the robustness of their current structures.

Indeed, global tax transparency is all-pervasive in terms of the implications for the industry.

And regardless of where the money is flowing to and from, structures need to be compliant from all aspects, most importantly where the client is tax resident, added Golovsky.

More broadly, from an investment perspective, Niles said he is now seeing a tremendous flow of assets out of Asia into developed markets, as well as cross-border flowsinvolving China.

There is also the expectation of the internationalisation of the RMB, he added, which is creating a growing need to focus on offering expertise in this area.

From the product perspective, there is a desire to develop outcomes rather than individual products, added Nilsson.

So if a client has a goal of achieving a certain return, the focus is to create a product that achieves that outcome, he explained.

At the same time, organisations need to respond to new requirements which are emerging. The amount of regulation they have to cope with, for example, has become significant, requiring greater investment in

administration and compliance systems in order to be more efficient in the way they do business, agreed speakers. Banks also need to be aware of the drivers for moving funds across borders, added Gambles.

A large number of clients move funds to other jurisdictions for reasons of confidentiality, custody and safety, rather than to invest, he explained.

So while the quantum of cross-border flows will increase, a lot of it is expected to stay on deposit, he warned.

Peter golovskyAmicorp group

“Global tax transparency is all-pervasive in terms of the implications for the industry”

Paul gamblesmbmg group

“A large number of clients who move funds to other jurisdictions do so for reasons of confidentiality, custody and safety, rather than to invest”

“Changes in relation to rules around the exchange of information and other regulations are a good example of the potential for winning new business, for instance in relation to trust structures and other wealth-related solutions”

www.hubbis.com [email protected]



http://www.hubbis.com/lms/login.php?redirect=false

www.hubbis.com [email protected]

http://www.hubbis.com/lms/login.php?redirect=false

WEALTH THINK 201436

PANEL DISCUSSION

Technology game-changers and a realisation that organisations need to adapt to a new world order to

stay relevant to clients of today and tomorrow suggests that the business of wealth management in

Asia is set for an overhaul, said panellists at Wealth THINK 2014 in Singapore in late September.

The business of wealth management in Asia is rife for disruption and change.

This is according to panellists at Wealth THINK 2014 in Singapore in late September, who highlighted a variety of drivers in order to support their outlook.

Technology, regulation and the need to stay relevant to a new crop of clients were high on the list of so-called game-changers.

In need of disruption

According to Richard Turner, head of market development, Asia, for Thomson Reuters’ financial & risk division, some of the common questions he hears from the firm’s partners across Asia Pacific lead him to believe that technology is seen as a large cost yet an impediment where it doesn’t help an organisation differentiate itself.

On the other hand, however, technology is an important differentiator, especially in terms of digital solutions, he added. “For private banks not spending money on

innovation, they might suffer from a lack of differentiation,” said Turner.

Within this, the personalisation of information is something which speakers agreed is clearly missing from today’s wealth proposition.

UBS Wealth Management has, for example, been investing significantly in the digital space over the past two to three years.

The objective, said Marcel Fuerst, chief information officer for Asia Pacific, is to ensure a customer has

a similar experience with the bank’s online offering as when he or she visits websites like Google, Facebook or Twitter, for example.

This is rooted in UBS’ focus on the advisory process.

Jan SchochLeonteq Securities Ag

“This is one of the biggest opportunities in the financial sector for the past 100 years”


“for private banks not spending money on innovation, they might suffer from a lack of differentiation”



Yet despite the realisation by most organisations that they need to move into the digital space, most of them are not sure how to do this.

“Wealth managers need a capability to move into the digital era while understanding better the behaviour of their clients,” explained Bert-Jan van Essen, co-founder and managing director at Dragon Wealth.

Peter Gill, vice president, banking & financial markets, ASEAN, at IBM, added that with so much information coming in, there is an urgent need for organisations to apply effective analytics to it. executive officer of Taurus Wealth

Advisors set up his independent asset manager, he said there was no off-the-shelf platform which provided consolidated reporting.

Today, there are a variety of solutions, all based around the ease of communication of investment ideas and to assist with the delivery of advice, he explained.

According to Benedict Sheehy, chief operating officer for Branded Trust, the recognition of the professional aspects of wealth management can benefit from the use of technology to provide delivery in a more efficient

way. “We deliver a differentiation strategy via corporate social responsibility,” he explained.

A greater use of technology is also likely to shape the future of Swiss private banking, added Jan Schoch, chief executive officer of Leonteq Securities AG.

At the same time as increased regulation is in the pipeline in Switzerland, which is expected to be implemented in 2017 / 2018, there is frustration from many wealth management clients around the expectations they have in relation to their private banks.

marcel fuerst UbS Wealth management

“We have been investing significantly in the digital space over the past two to three years”

richard TurnerThomson reuters

“For private banks not spending money on innovation, they might suffer from a lack of differentiation”

“Those firms which proactively fragment the value chain and focus on their strengths will be the winners as they can innovate and promote higher quality services. This is one of the biggest opportunities in the financial sector for the past 100 years”

Only then can they hope to understand it properly in order to customise it for an individual client.This is what IBM Watson is looking to do with DBS Bank, for example, and at a level which is scalable.

Technology can also bring much-needed transparency – both in terms of performance and quality of advice – to what has traditionally been an opaque industry.

Six years ago, for example when Mandeep Nalwa, founder and chief



WEALTH THINK 201438

PANEL DISCUSSION

As a result, said Schoch, a lot of stress is building up. He said he believes the only way to resolve this is to fragment the value chain by focusing on a specific segment of clients and servicing this with an enhanced business model.

“More effective use of technology is a vital part of this.”

With many private bankers overwhelmed by the complexity of the industry today, the majority of processes must go in the direction of being digital, added Schoch.

As a result, those firms which proactively fragment the value chain and focus on their strengths will be the winners as they can innovate and promote higher quality services, he explained.

“This is one of the biggest opportunities in the financial sector for the past 100 years.”

At the same time, it is important to remember that through the lower cost and higher accessibility of technology, it is easier for new players to enter the market.

For example, the value chain has the potential to be cut into smaller pieces as smaller companies use different technology to enter lucrative segments, explained Van Essen.

being relevant

One of the most critical successful factors for wealth management institutions and advisers going forward is their ability to bring relevant solutions to clients, and in a consistent way.

This is particularly important as more customers look to get some of their advice in a more automated way.

“Digital wealth is about understanding client behaviour to the point where you can identify the next best thing for them to buy,” said van Essen.

“The next step is to give this information directly to clients.” This also helps ro win back the trust of clients.

To ensure relevance, Schoch added that there are various social databases which give a sense of how others are getting on.

He predicted that “crowd” performance will become more

mandeep Nalwa Taurus Wealth Advisors

“Technology can bring much-needed transparency – both in terms of performance and quality of advice”

Peter gill Ibm

“With so much information coming in, there is an urgent need for organisations to apply effective analytics to it”

“One of the most critical successful factors for wealth management institutions and advisers going forward is the ability to bring relevant solutions to clients. This is important as more customers look to get some of their advice in a more automated way”




important going forward for the next generation of companies developing their offerings.

Indeed, the role of technology is not just speed and efficiency, but also to make things simpler.

the bottom line before it can hope to think about moving to the next level.

According to Turner, meanwhile, a consumerisation of wealth management is expected to take place in Asia.

“The potential for this can be seen by looking at what is happening in countries such as Indonesia,” he explained.

In line with this, Turner said he believes one of the only ways to tap these opportunities is by having an

bert-Jan van Essen Dragon Wealth

“Wealth managers need a capability to move into the digital era while understanding better the behaviour of their clients”

benedict Sheehybranded Trust

“We deliver a differentiation strategy via corporate social responsibility”

“Digital wealth is about understanding client behaviour to the point where you can identify the next best thing for them to buy. The next step is to give this information directly to clients”

This means focusing on standardising certain aspects of wealth management, while quality of advice remains the distinguishing factor, explained Nalwa.

There is also a desire by organisations in the wealth space to take what they have learnt in the high-end market and scale this out for the wider segment, added Gill.

Yet the future is not only about digital solutions, added Fuerst, explaining that UBS has come to the point where it realises that its core banking system needs to be enhanced in order to support the next step of the bank’s digital vision.

“That aspect tends to be under-estimated [within the industry],” he explained.

He also pointed to the need for the industry to keep in mind that the banking sector must prioritise the optimisation of the cost base by fixing

“There is a need for the industry to keep in mind that the banking sector must prioritise the optimisation of the cost base by fixing the bottom line”

open mind and also the willingness to partner with various industry players.Those firms which act earliest will be the winners of tomorrow.



WEALTH THINK 201440

PANEL DISCUSSION


Today’s investment climate is characterised by simpler product, new ways to view and price risk,

and a need to differentiate by service, according to panellists at wealth THINK 2014 in Singapore

in late September.

There seem to be three core investment themes which are shaping the current investment landscape: a mispricing of risk; a search for yield; and policy divergence.

At the same time, the role of central banks has grown significantly, to the point where almost every asset class is now influenced by central bank policies, with asset price inflation despite the lack of price signals.

As a result, many of the traditional methods of looking at fundamentals and technicals are no longer relevant. This is compounded by the existence of more “black swan” events than ever before.

This was according to panellists at Wealth THINK 2014 in Singapore in late September.

“At the liquid end of the fixed income market, for the first time ever in 2013, yield for high-yield deals were 6%; and in 2014 they have fallen below 5%,” said Michael Levin, head of asset management product and head of alternative investments, private bank, at Credit Suisse in non-Japan Asia and Australia.

What is clear, he added, is that investors are giving up a lot in terms of credit risk for the incremental yield.

Striving for differentiation

In terms of investment appetite, simplicity and ease of transactions have become common factors in the market today, agreed speakers.

According to Bernard Wai, managing director and head of private client solutions, Asia Pacific, at Citi Markets, this is especially the case in relation

to structured products, triggered by regulatory reforms.

Post-2008, he explained, the industry has moved towards providing more commoditised products.

At the same time, an increasing number of Asian clients are focusing on products outside of the region, especially in the US.

Yet without the scope to be overly innovative in relation to individual product, differentiation is more

michael Levin Credit Suisse

“Investors are giving up a lot in terms of credit risk for the incremental yield”



feasible through the service offering.Kylie Chan, head of sales for Old Mutual Global Investors in Asia, reiterated that it is increasingly difficult to differentiate from an asset manager’s perspective, given the shrinking gap between asset classes.

As a result, coming up with new products really means developing new product features.

Going through specialist managers has been one way to ensure differentiation, added Geoffroy Ganshof, head of wealth management at EuroFin Asia Group.

finding yield

There are some avenues for investors to pursue in terms of yield.

Private lending offers attractive yields, for example in trade finance, explained Ganshof.

International investors are also underweight emerging markets despite the fact that these markets represent 57% of global GDP, added Simon Hopkins, chief executive officer of Milltrust International.

“I would expect over the next decade to see a shift in focus by private wealth managers into these markets.”

Among the challenges to this, however, is the fact that those banks which represent the largest amount of distribution are focused on the fixed income space, for example via structured notes and bond funds, given their need to extend their balance sheets.

That limits the amount of scope for sales into equity mutual funds, said Hopkins, adding that while fixed income appears to be safe, this is far from true in practice.

Yet with exponential increases in regulation, the smaller firms get hit the hardest, explained Hans Goetti, head of investment for Banque Internationale a Luxembourg in Asia. “The question is whether the smaller firms have enough stamina to survive.”

Changing priorities

While discussions between wealth mangers and clients pre-crisis tended to be about returns, with fairly indiscriminate allocations, clients are now much more conscious of risk, said speakers.

They are also more receptive to new asset cases and strategies which can help them diversify. But at the same time, they are more realistic in terms of what they expect in relation to risk and returns. “We lead with a discussion about risk,” explained Levin, “so investors shouldn’t view allocations to investments like hedge funds as a leap of faith.” The goal, he added, is to find what he calls “durable” investors and investment strategies. “The more conscious clients are aware of risk, the more they can capitalise on the opportunities of alternatives such as hedge funds, for example,” said Levin.

Hans goetti banque Internationale A Luxembourg

“The role of central banks has grown significantly, to the point where every asset class is now influenced by central bank policies”

bernard WaiCiti markets

“Simplicity and ease of transaction have become common factors in the market today, especially in relation to structured products, triggered by regulatory reforms”



WEALTH THINK 201442

PANEL DISCUSSION

When it comes to emerging markets, investors tend to invest on a global emerging markets basis, added Hopkins. “The way to approach emerging markets is to deliver the component parts of an emerging markets strategy.”

Evolving product offerings

According to Hopkins, there is the potential for a backlash against the largest players in the industry – once investors realise they have under-performed for many years, he explained.

At the same time, there will be a move away from the short-term fad for ETFs and back towards active management, he added.Ganshof emphasised that investment strategies are more important than the individual product.

Added Goetti: “It is our job to identify the investment themes and discuss these with clients to manage their expectations, and then find the right managers to deliver investment performance.”

Levin said he is focused on the concept of “thinking differently”,

with opportunities to be driven by regulatory changes and the obsession with liquidity.

He is adamant that investors shouldn’t outsource due diligence, nor be obsessed with structures. By contrast, less liquid strategies are attractive, leading to a blending across structures and liquidity profiles to enhance diversification.

And once the need is identified, Wai said it is then possible to innovate based on the actual requirements of the clients. Added Chan: “We need to be more open-minded when advising clients on their investments.”

Kylie ChanOld mutual global Investors

“A key focus is to build the wealth of clients, which is based on determining the investment themes that we think will perform going forward”

Simon Hopkinsmilltrust International

“International investors are underweight emerging markets despite the fact that these markets represent 57% of global GDP”

Geoffroy GanshofEurofin Asia group

“Investors are paying a high price for liquidity in the bond market, whereas

in private lending, with less liquid product, yield is more attractive”




http://www.hubbis.com/

WEALTH THINK 201444

PANEL DISCUSSION

The advisory model of the future will retain human interaction where guidance and expertise is

needed, but will be supported more significantly by the use of technology and digital solutions to

ensure efficient execution and relevance of information, according to panellists at wealth THINK 2014

in Singapore in late September.

Successful advisory models and platforms are evolving in line with the changing needs and increasing desire of clients towards a faster, more efficient, more consistent and more customised offering. As this happens, technology is expected to play a more prominent role – although the extent will depend on the customer segment, product type and individual preferences in relation to the delivery channels.

These were some of the main views of panellists at Wealth THINK 2014 in Singapore in late September.

differentiated advice

According to Bryan Henning, head of global research & investments for Barclays in Asia, there are two key differentiators that set advisory processes and platforms apart: service and advice.

When it comes to advisory models, he said it is all about client engagement, including timely updates with market information, and a mix between tactical trading ideas balanced against holistic advice. It is about bringing quality product ideas to clients.

Once the advice is given, added Henning, it is about standing behind that advice and being transparent about performance as well as, to some degree, fees.

“It is also important to be there for the client when things go wrong, especially given that it isn’t possible to always get an investment call right,” he said.

For Marc Van de Walle, global head of products at Bank of Singapore, giving good advice in private banking is all about understanding the client.

“It is also important to be there for the client when things go wrong, especially given that it isn’t possible to always get an investment call right”


“When it comes to advisory models, it is all about client engagement, including timely updates with market information, and a mix between tactical trading ideas balanced against holistic advice. It is about bringing quality product ideas to clients”

bryan Henningbarclays



But, he added, this is something which relationship managers (RMs) don’t generally do enough of.

Further, good advice focuses more on risk than return.

“This is the element that is more possible to control,” explained Van de Walle.

Adding local colour to make the offering Asia-specific is another component of a successful advisory process, explained Angel Wu, regional head products & solutions for ABN AMRO Private Banking in Asia. As is after-sales service, which she said has to be ongoing.

A strong value proposition also involves demonstrating relevance to investors.

Ultimately, it comes down to overcoming the trust issue, which, said Seamus Donoghue, chief executive officer of Allocated Bullion Solutions, depends on an ability to align interests.

“Transparency plays a big part in this, and technology can facilitate the transparency around transactions and fees,” he added.

finding a role for technology

Speakers were, however, divided over the extent of the potential for

technology to be incorporated within the advisory process. For example, said Van de Walle, while a lot of banks are trying to automate the advisory process to enhance efficiency, it needs to be made relevant to every client.

Michael Coglin, head of investments at CTCB Private Bank, agreed that providing good advice in private banking is not formulaic, so building in flexibility is essential to what advisers do.

From another perspective, since one of the most important things in the

“Good advice focuses more on risk than return. This is the element that is more possible to control”

Angel WuAbN AmrO Private banking

“We cannot ignore [the technology preferences of the next generation] and need to evolve the advisory process accordingly”

“The ability to give good advice in private banking is all about understanding the client. but he added, this is something which rms don’t generally do enough of”

From a product provider’s perspective, that has meant creating more dedicated currency classes, and being able to explain how a particular currency can help add value to portfolios, said Gopi Mirchandani, senior vice president, business development, at Fullerton Fund Management.

Being known for a specific expertise will lead to the opportunity to customise solutions going forward, she added.

marc van de Wallebank of Singapore



WEALTH THINK 201446

PANEL DISCUSSION

advisory process is being able to get ideas across to clients, smart delivery channels using digital solutions are essential.

Harmen Overdijk, managing partner of CAIDAO Wealth, said there is a need to use technology solutions to send very specific investment ideas to individual clients based on their profile and objectives, and through multiple delivery channels.

While technology will never replace the RM, he added, it already does much more than many people use it for.

It can also help break down the layers between ideas, information and the end-client.

There is a danger, too, of under-estimating just how tech-savvy today’s clients are, he added.

Plotting an automation path

The key question that speakers were debating in relation to the applicability of technology was: should the advisory process of the future be automated?

In Henning’s view, automation and technology is most likely to have an impact in facilitating the delivery of flow product, such as FX and certain types of structured products.

Plus, added other speakers, technology is important to deal with compliance requirements from

gopi mirchandanifullerton fund management

“Being known for a specific expertise will lead to the opportunity to customise solutions going forward”

Harmen OverdijkCAIDAO Wealth

“There is a need to use technology solutions to send very specific investment ideas to individual clients based on their profile and objectives”

the regulators in various markets, for example relating to monitoring concentration risks, and to ease the administrative burden on RMs in relation to client onboarding and suitability checks.

In line with the drive towards greater efficiency for the front-line, finding a solution to get the right information to the right RM – to help them give the right advice to the end-client should be another key goal.

Gopi also agreed that there is increasing pressure to deliver data more quickly and “on the go”.

“There is a need to use technology solutions to send very specific investment ideas to individual clients based on their profile and objectives, and through multiple delivery channels. While technology will never replace the rm, it already does much more than many people use it for. It can also help break down the layers between ideas, information and the end-client”




Perhaps another role for technology is in helping private banks to segment their customer base in a more granular way, and one which also makes the offering economical for a certain group of customers.

With IT budgets constrained, however, having the right business case and being specific about what to automate is essential.

The need to embrace new technology and delivery channels to disseminate the right information is also important in relation to servicing the next generation.

“We cannot ignore this and need to evolve the advisory process accordingly,” said Wu.

Yet she is another advocate of the personal touch, rather than relying on technology to do anything more than enhancing the relationship.

fee considerations

Shrinking margins are another driver or consideration in relation to boosting spend on technology.

According to Donoghue, transaction-based firms will face increased pressure on their business model, so will need to invest heavily in

technology to free up expensive resources to understand clients and be able to charge for the value-added services they provide.

“We don’t have difficulty securing fees for clients who believe in our service,” added Coglin.

The cycle of communication with clients and looking after their assets is key to helping them understand the state of the markets and the impact on their portfolios, he explained – which is based on advice from their bankers.Private banking shouldn’t under-sell itself, said Coglin.

Seamus Donoghue Allocated bullion Solutions

“Technology can facilitate the transparency around transactions and fees”

michael Coglin CTCb Private bank

“Perhaps another role for technology is in helping private banks to segment their customer base in a more granular way, and one which also makes the offering economical for a certain group of customers”

“The cycle of communication and looking after client assets is key to helping them understand the state of the markets and the impact on portfolios – which is based on advice from their bankers. Private banking shouldn’t under-sell itself”

“We don’t have difficulty securing fees for clients who believe in our service”



WEALTH THINK 201448

PANEL DISCUSSION

Panellists at Wealth THINK 2014 in Singapore in late September highlighted the opportunity that exists

in Asia for the wealth and professional services communities to help business-owning families meet

their corporate and personal needs – but only if they take a long-term view to servicing the patriarchs

as well as the next generation.

Practitioners from all segments of the wealth and professional services communities across Asia are increasingly looking to tap the potential that exists to advise the current and future generations of wealthy families.

It is certainly an attractive client segment, said panellists at Wealth THINK 2014 in Singapore in late September, given the combination of the corporate needs they have for their businesses, as well as their personal needs. “Private bankers need to be able to engage with [families], to deliver solutions from all aspects of the platform,” said Mark Smallwood, head of franchise development and strategic initiatives at Deutsche Asset & Wealth Management (DeAWM) in APAC.

The opportunity is even larger as a result of the vast generational movement of wealth underway in Asia.

This makes it essential to facilitate the right structuring for families as part of the wealth transfer process for their assets, added Smallwood.

guiding the discussion with families

It is notable that Asian families possess some unique attributes, which must be considered when advising them on the various aspects of their wealth.

For example, the founder of the family business – as the wealth creator – essentially controls everything, said Leonardo Drago, chief investment officer at AL Wealth Partners.

By contrast, in the US and Europe, the wealth tends to be better structured, with family offices identifying the different needs, strengths and desires of individual family members, including the next generation.

In Asia, however, being all things to all types of families isn’t necessarily the answer, especially for ultra high net worth (UHNW) clients, agreed speakers. And the relative immaturity of wealth in Asia also means that clients tend to need much more than advice on investing.

mark Smallwood Deutsche Asset & Wealth management

“Private bankers need to be able to engage with [families] to deliver solutions from all aspects of the platform”

HOW TO mEET THE NEEDS Of bUSINESS-owNING FAMILIES



Indeed, one of the most pressing issues stems from the imminent transition of wealth from one generation to the next. As a result, they want to understand what to do with the family business.

“The portfolio accounts are relatively easy to deal with, but what to do with the family business and how to engage with other members of the family, as well as issues relating to who will and won’t be involved, are among the key considerations,” said Nigel Rivers, global head of private clients at TMF Group.

This can often lead to the need to reconcile differences, which, said Drago, plays a big part in the process of meeting the needs of business-owning families. “We are used as mediators between the generations within a family,” he explained, “given that there are different needs for each side.”

finding the right partners

Often it comes down to finding the right third-party to promote and guide the discussion to achieve an outcome for the family. “What families need from their financial services provider – whoever it is – is someone who can draw in and coordinate those specialists which are competent in the areas that the families need to execute the plan,” said Smallwood.

So where this includes legal and governance issues around the structuring, for example, a legally-qualified person who specialises in succession would be the right individual.

And while many families tend to want a big brand name, a lot of the large financial institutions don’t offer the most appropriate platform to service their particular needs.

Drago also added that it isn’t feasible to have a banker dealing with a family if that individual might change jobs every few years. “Families wouldn’t want to change structures and banks.”

And even with a lot of the family offices which are starting up across Asia, they tend to mainly be investment managers.

What they don’t do is provide the fuller service of the family office, for example looking at governance, tax and succession planning services.

“If you are not delivering value or fulfilling a need, then the relationship

will be short-lived,” said Rivers, “especially when the next generation takes over.”

He added that no conversation will take place about transitioning wealth without first creating the right level of trust in the relationship.

Credibility, competency and contacts are all key to delivering what the families need, explained Maikel Sajangbati, chief executive officer and founder of MCI.

Indeed, finding trustworthy partners is particularly important in emerging wealth markets like Indonesia.

Nigel rivers Tmf group

“If you are not delivering value or fulfilling a need, then the relationship will be short-lived”

Leonardo DragoAL Wealth Partners

“We are used as mediators between the generations within a family, given that there are different needs for each side”



WEALTH THINK 201450

PANEL DISCUSSION

In Indonesia, specifically, there is a transition from a product-driven culture to a gradual move towards advisory offerings, said Sajangbati.

Beyond the focus on wealth creation, older clients are more concerned about transition of wealth, he explained. This is something which hasn’t been part of the advice given by wealth managers in Indonesia, with a lack of focus on wealth preservation.

The challenge, he added, is that the older generation tends to fear succession planning, for example relating to who will take over from them if their children don’t want to return home and continue the family business.

Delivering connectivity for families

There is also growing scope for advisers to connect families with opportunities and networks elsewhere in the region, and also globally.

For UHNW clients, for example, family members and assets reside in multiple jurisdictions, and they have an appetite to invest in assets around the world.

The value-add that Smallwood said a firm like DeAWM can offer in this area, is the breadth of the product range and global universal banking platform. Plus, business-owning families are interested in liquidity, so the ability to partner with other parts of the bank is key.

Emotional engagement

Another value-add advisers must realise is a critical part of advising wealthy families is managing emotions.

Yet while this is an effective way to build trust, it takes a lot of time and is difficult to monetise, explained Drago. “In a typical three-hour meeting with a client, we cover the investment performance in the first 10 minutes,” he said. “The rest of the time is then spent discussing all the concerns and issues relating to the family.”

In many cases, however, the relationship manager (RM) and client wouldn’t even be at the stage where they would be discussing emotions.

Smallwood explained that in many cases, clients will be satisfied to

continue working with RMs even where there is no synergy.

Evolving needs of business-owning families

One of the main needs of these clients in the years to come will be in dealing with the levels of transparency and disclosure now being forced on them.

The transition is still a slow one, however. Many patriarchs, don’t believe the world has changed in these ways, said Drago.

maikel SajangbatimCI

“The challenge [in Indonesia] is that the older generation tends to fear succession planning”

Yet the next generation realise the need to deal with these changes, added Rivers, especially given their greater internationalisation of wealth and lifestyle. The focus, therefore, must be on structuring what exists now into something that suits the situation going forward.

Meanwhile, Smallwood also said he expects more practical issues such as client reporting to become increasingly important. “Many clients wouldn’t know their current portfolio and exposure, or exactly what assets they have.” For example, he explained, a client might have four

or five banks, with different asset classes, different leverage levels with each bank, and a mix of international assets, real estate and business assets.

Going forward, he said there needs to be some commonality to the systems and platforms at the back end.

According to Sajangbati, business-owning families ultimately need somebody who really understands what they need, and is fully dedicated to managing their wealth, while being patient to deal with the wider family.



Understanding, trust and partnership are three of the key ingredients for building relationships

with Asian families if advisers are able to win the hearts and minds both of patriarchs and the next

generation, said panellists at Wealth THINK 2014 in Singapore in late September.

Being an effective adviser to the multiple generations within an Asian family requires an ability to listen, understand, empathise, challenge (where necessary), and then connect relevant third-party specialists.

These were some of the views of panellists at Wealth THINK 2014 in Singapore in late September.

“My personal experience has taught me that regardless of nationality and culture, these clients need someone who can listen to them and, as an outsider, be impartial to bridge the understanding gap which often exists,” said Anthonia Hui, chief executive officer of AL Wealth Partners.

Different family members are often confused about the emotions they feel about the various aspects of their lives, so need someone to speak openly and in an emotion-less way.“A lot of the time I am more like a family therapist than a fund manager,” explained Hui.

Cultural considerations

According to some speakers, individual cultures play a key role, and

advisers must know what is effective for different families based on their background.

How clients behave depends on which countries they are in, said Noor Quek, founder / managing director at NQ International.

“The less emerged they are, the more the need for advice in the new world order,” she said.

This highlights the importance of listening to what concerns them and what they want, she explained, as

well as how they want to do things – and with whom they are comfortable.

Malaysia, for example, is a melting pot of cultures, which leads to different needs from one family to the next, added Carolyn Leng, head of private banking at CIMB Private Banking in Malaysia.

Her bank has also started to build out its business in other markets around South-east Asia, giving it exposure to the specific preferences of different families. “Understanding these differences can help give

Anthonia HuiAL Wealth Partners

“A lot of the time I am more like a family therapist than a fund manager”

DELIvErINg ADvICE THAT fAmILIES ACTUALLY wANT - ANd NEEd


WEALTH THINK 201452

PANEL DISCUSSION

more confidence about advising them in a more relevant way,” said Leng. Meanwhile, for Evrard Bordier, managing partner of Bordier & Cie, some of the core values of good advice don’t change when advising clients, regardless of the geography. “We are very long-term based and partnership driven as a more boutique bank,” he said.

Practical steps for business succession

Once companies reach a certain level and need to be institutionalised, the business owner will then start to face various internal issues.

For example, said Eliza Ong, regional head of group asset management for RHB OSK Asset Management, this might include succession and bureaucracy, and the number of people within the family business connected to this wealth grows.

One of the first steps involves assessing the family’s human capital. That means identifying who is competent enough to carry on running the family business, said Hui, assuming that it is a business which should be continued at all.

Next, there must be a framework for running the business – for example, whether it should be professionally-run alongside the children, or whether the children will take over the firm on their own.

Many children of wealthy families get brought up in a protected environment, explained Hui, and therefore don’t have the same sense of taking risks.

Philipp Piaz, partner at Finaport, said he believes that the solution in various cases is professional management. With the second or third

Carolyn Leng CImb Private banking

“Understanding differences [between families] can help give more confidence about advising them in a more relevant way”

Noor QuekNQ International

“When there is diversity on the board, including the mother or daughter, for example, there tends be a smoothening of emotions”

generation, there can be cases where they don’t feel the same attachment to the family business, he explained.

They tend to be more open to solutions to either cash-out, or take on a figurehead role and let professionals run the day-to-day operations, he added.“As third-party advisers, we need to take a step back and provide impartial advice and guidance for the good of the business in the long run,” said Piaz.

Handling succession smoothly requires advisers to deal with these considerations early on, added Ong, and clients need to engage in what

are considered taboo topics.A lot of patriarchs and matriarchs know the truth but don’t always want to make the hard decisions, she explained. Yet that can lead to the family breakdowns.

Quek added that when there is diversity on the board, including the mother or daughter, for example, there tends be a smoothening of emotions.

“The challenge we have in Asia is to be able to engage with our clients about topics relating to succession,” said Ong. “We need as advisers to pose challenging questions.”




Evrard bordier bordier & Cie

“I am living proof of our ability to manage and pass on wealth across multiple generations”

Eliza Ong rHb OSK Asset management

“The challenge we have in Asia is to be able to engage with our clients about topics relating to succession”

Philipp Piaz finaport

“A lot of clients appreciate having a partner who is there to bounce

ideas off”

Yet Quek said she is seeing a growing trend, post-2008, of the first generation realising it should listen a bit more to the younger generation, and vice versa.

forging partnerships

One of the concerns of many families relates to a growing discomfort they feel about what they observe and have to deal with in relation to the investment world. Piaz said this stems from a combination of factors – bankers which change jobs regularly, a growing number of products which

get more complex, and challenging markets. A lot of clients, therefore, appreciate having a partner who is there to bounce ideas off. “And this goes beyond just managing money,” he explained.

Border said that his firm’s approach is to link clients with the right people in the areas they need, and in whichever country they are interested in. As a result, the bank sold its trust business and now doesn’t focus on anything which it doesn’t believe it is good at.

While some speakers said that the boutique offering is the best way to

deliver what families want and need, Leng suggested that as a universal banking group, CIMB can play to its strengths by tapping into the services and products within the various units across the institution.

Working with a third-party can create some concerns about control over assets and the reporting around them.

Track record is also important to Asian families, added Bordier. “We have good traction in mainland China, for example, as I can show that I am living proof of our ability to manage and pass on wealth across multiple generations.”




.FTSE.FTSE

.FTSEChart

09/12/2013

RangeDaily

RangeDaily

Materials -3.721

Consum... -2.487

Financials -1.652

Health Care -1.178

-0.525 Information Technology

-0.465 Utilities

-0.333 Consumer Discretionary

0.990 Energy

1.178 Industrials

5.859 Telecommu...

.FTSE

RIC Idx.Pts.NetRIO.LBATS.LAZN.LBLT.L

GSK.LTLW.L

STAN.LHSBA.L

RR.LICAG.L

BG.LPRU.LAV.L

RDSa.LSHP.L

VOD.L

-1.745-1.606-1.214-1.110-1.060-0.999-0.961-0.8800.5060.5590.6550.6880.706

0.8001.0285.557

Top

Per

form

ers

GICS Sector - Idx.Pts.Net - 09/12/2013

STOCKSSECTORS

INDICIES

Daily .FTSELineGrd, .FTSE, Trade Price(Last)09/12/2013, 6,549,84, -2.15, (-0.03%)

SMA, .FTSE, Trade Price(Last), 1409/12/2013, 6,611.42

10 17 24 01 08 15 22 29 05 12 19 27 02 09 16 23 30 07 14 21 28 04 11 18 25 02 09 16

Jun 13Jul 13

Aug 13Sep 13

Oct 13Nov 13

Dec 13

05/06/2013 - 18/12/2013 (LON)PriceGBP

6,700

6,650

6,600

6,500

6,450

6,400

6,350

6,300

6,250

6,200

6,150

6,100

6,050Auto

6,549.84

6,611.42

© 2014 Thomson Reuters. 1007421 0614.

Part art. Part Science. all BuSineSS. eikon revealS your BeSt oPPortunitieS.

Try Eikon Free: financial.thomsonreuters.com/eikon

1007421_v1.indd 1 26/06/2014 17:01

http://thomsonreuters.com/

the exclusive forward-thinking global wealth management...

Documents