Issue 3, 2016
Subroto Som Mashreq Bank
Inside the wealth management journey
TAX AMNESTY MORE INFORMED CLIENT-LED DISRUPTION OFFSHORING CHINA EVENT HIGHLIGHTS What Indonesia’s scheme Citi enhances advisory How UBS approaches Finding solutions for Indonesia, Zurich, means for the industry offering in Asia digitisation cross-border needs Family Wealth Enjoy your moment in the Sun
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Life’s brighter under the sun Foreword
This is the latest edition of our Quarterly publication covering Asian wealth management.
This is being produced at a time which The blurring of the lines between the is probably the most difficult ever for various types of organisations operating the wealth management and private in this space also brings with it areas of banking industry in Asia. overlap and commonality.
The last 12 months have been particu- To cater to this, the publication covers larly tough, and the challenges that firms Private Banking, Retail Banking, Indepen- face are mounting. dent Wealth Management, Family Offices, Insurance, Asset Management, Technol- From the economic environment, tax ogy, and also Professional Services. amnesty and regulatory scrutiny, to the debate over onshore versus offshore, Asian Wealth Management is created and the continued hunt for both talent in conjunction with – and for – senior and growth – chief executives are re- management, product gatekeepers, considering their business models, along business heads across compliance, op- with the strategic choices they need to erations, technology, advisory and sales, make, in order to remain relevant. and other key stakeholders from the top international, regional and domes- The content in this issue should be rel- tic organisations across the community evant to anyone who is serious about with which Hubbis has worked hard building a sustainable and profitable over the past six years to build relation- wealth management business in Asia. ships and enhance connectivity.
ANDREW CROOKE EDITORIAL AND CONTENT DIRECTOR HUBBIS Contents
Cover Story
12 MASHREQ BANK MAPS OUT WEALTH MANAGEMENT JOURNEY Subroto Som of Mashreq Bank talks to Hubbis about his plans to leverage the institution’s heritage and retail customer base to offer wealth management products and services to clients of all types and, eventually, across generations.
Feature Articles
10 MAKING INDONESIA’S TAX AMNESTY MORE MEANINGFUL While there are mixed views over the extent of the success (or not) to date of Indonesia’s landmark tax amnesty scheme, there is little doubt about the positive signals it has sent about the government’s intention to develop the fundamentals for a more sustainable wealth management industry.
26 CAPTURING ASIA’S DIGITAL POTENTIAL While everyone in Asia is talking about ‘going digital’, speakers at Hubbis’ annual event in Zurich explored what is required to service the region’s vast number and variety of wealth management firms, and customers, with the right solutions.
34 THE INTERNATIONALISATION OF CHINESE WEALTH Chinese HNW and UHNW clients are looking for new options, especially cross- border solutions, to diversify, protect and grow their wealth in today’s complex world. A new White Paper by Hubbis and Jersey Finance identifies the way forward.
64 CREATING A WORLD-CLASS CLIENT EXPERIENCE Digitalisation to drive a superior client experience is the holy grail for private banks grappling with how to stay relevant and stand out in a highly-competitive market. But achieving this requires a clear roadmap for innovation, investment and information.
Insights
02 BRINGING BETTER PRACTICE MANAGEMENT TO ASIA Ted LeClair of Natixis Advisor Academy
16 HOW CITI IS ENHANCING ITS ADVISORY OFFERING IN ASIA Paul Hodes of Citi
22 KEEPING CLIENTS AT THE HEART OF DIGITAL DISRUPTION Ketan Samani of UBS Wealth Management
40 A GROWING NEED FOR AN EVEN PLAYING FIELD Tim Searle of Globaleye
i ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3
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Private Banking | Asset Management | Treasury & Trading | www.ubp.com Past performance is not a guide to current or future results. The value of investment interests can fall as well as rise. Any capital invested may be at risk and you may not get back some or all of your original capital. UBP is authorised and regulated in Switzerland by the Swiss Financial Market Supervisory Authority and is authorised in the United Kingdom by the Prudential Regulation Authority. UBP is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority; it is a licensed bank regulated by the Hong Kong Monetary Authority (HKMA) and a registered institution regulated by the Securities and Futures Commission (SFC) in Hong Kong for Type 1, 4 & 9 regulated activities; and is regulated as a merchant bank by the Monetary Authority of Singapore, is an exempt financial adviser under the Financial Advisers Act (Cap. 110 of Singapore) to carry on certain financial advisory services, and is exempt under section 99(1)(b) of the Securities and Futures Act (Cap. 289 of Singapore) to carry on certain regulated activities. 50 CUSTOMER-CENTRICITY AT HEART OF A WINNING INDONESIA STRATEGY Ivan Jaya of Commonwealth Bank
60 UNCOVERING HIDDEN GEMS IN THE MIDDLE EAST Vic Malik of Barclays
74 CATERING TO CHINESE INVESTMENT APPETITE Ashley Dale of Harvest Global Investments
Profiles
06 PUTTING CLIENTS BACK AT THE TOP OF THE AGENDA Dennis Tan of OCBC Bank
32 A STRATEGIC APPROACH TO APPLICATION DEVELOPMENT IN BANKING Hanspeter Wolf of Appway
Practice Management
04 KEES STOUTE – SKILLS IN WEALTH MANAGEMENT Investing in the ‘right’ conversations with clients
62 TODD JAMES – PORTFOLIO MANAGEMENT ADVICE All that glitters is not gold
Event Highlights
44 INDONESIAN WEALTH MANAGEMENT FORUM 2016 New wealth management dawn beckons for Indonesia
54 ASIAN WEALTH MANAGEMENT FORUM 2016 - ZURICH Accessing and capitalising on the Asian wealth story
68 ASIAN FAMILY WEALTH FORUM 2016 How to optimise the family wealth opportunity in Asia
Published by Hubbis. Printed in November 2016 in Hong Kong. © Hubbis (HK) Limited 2016
All rights reserved. No portion of this book may be repro- Michael Stanhope duced, duplicated or copied by any means without the prior Chief Executive Officer written consent of the publisher. No legal responsibility Hubbis can be accepted by the author or publisher for the content T (852) 2563 8766 which appears in this publication. E [email protected] W www.hubbis.com
ii ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 Vision means looking to the future without losing sight of the present. VP Bank looks ahead – with both feet firmly in the here and now. We guide you on your journey through the investment and finance universe. Because we don’t want to limit your potential. Safely ahead.
VP Bank (Singapore) Ltd · 8 Marina View · #27-03 Asia Square Tower 1 · Singapore 018960 · Singapore T +65 6305 0050 · F +65 6305 0051 · [email protected] · www.vpbank.com VP Bank Group is based in Liechtenstein and has offices in Vaduz, Zurich, Luxembourg, Tortola/BVI, Singapore , Hong Kong and Moscow.
ad_GuidetoWealthManag_Asia_A4_EN.indd 1 26.07.16 14:23 85% to 90% 300 to 400 43%
The average failure rate over the The goal [of the Citi-Wharton Business succession planning is past 30 years in the US, and still School training programme] is the main focus today of Chinese to this day, in terms of people to train 300 to 400 Citi advisers HNW and UHNW individuals. who become a financial adviser, is every year for the next three years. This is followed by a mix of probably around 85% to 90%. Page 16 insurance/ protection, Page 2 estate planning, and legacy planning. Page 34
1% 220 million 500 years
The first phase of the [Indonesian Ivan Jaya is optimistic on the “We can transport 500 years of Tax Amnesty Programme], from ability of Indonesia to take a digital knowledge and experience in Swiss July to September 2016, has path… in a country with 220 banking to Asia.” resulted in a take up of less than million mobile subscriptions from a Page 26 1%. This equates to just 422,000 population of 250 million. participants or so, out of an Page 50 estimated 50 million overall. Page 10
Content colour coding - for Hubbis articles
REGULATION & COMPLIANCE SKILLS
INVESTMENTS STRATEGY & BUSINESS
FAMILY WEALTH TECHNOLOGY
iii ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3
EXPERT INSIGHTS
Bringing better practice management to Asia
Driving and supporting more holistic advisory is something Natixis Global Asset Management has dedicated a lot of time and energy to in the US. Ted LeClair of the Natixis Advisor Academy explains how and why this is key for the firm in Asia too.
Whereas most fund management firms based on their AUM. So, for example, tend to focus on their investment prod- if they create a financial plan for a client, ucts and markets, Natixis Global Asset the adviser might get paid for that plan, Management chooses to focus on with a different fee structure for the something different by providing the execution of this plan. “The beauty of tools and coaching to enable advisers that for many advisers, is that they see to do the right thing for their clients. it as putting them on the same side of the table as the investor,” says LeClair. Part of the rationale, is that helping those individuals selling to the client directly While there is still a transactional busi- to run their business better, it benefits ness in the US to some degree, it is the whole community in the end. increasingly popular to find advisers essentially offering a one-stop-shop, Increasingly, the main distributors, where they provide the financial plan- whether banks or IFAs, are realising ning advice, but also act as a central this. While they have lots of product point where the client can access a providers knocking on their door, they variety of related services such as tax TED LECLAIR want more than just product, explains or wealth structuring advice via one Natixis Advisor Academy Ted LeClair, senior vice president and central specialist. director of the Natixis Advisor Academy. “They want us to help their “This prevents a client from having to advisers be better.” send their financial information to so many people,” explains LeClair, “with The US Department of Labor has also In the US, this is a more tangible con- those firms then all having to repeat brought in a new law in relation to fi- versation, given that roughly 60% of the process of gathering so much duciary responsibilities. This has created advisers in the market now get paid fees private information.” some concern among the brokerage
2 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 houses, given that the standard will be This also fits into the fundamental benchmarked going forward to the Natixis philosophy of durability – al- Not bowing to digital firm’s executives and the adviser. though from LeClair’s viewpoint, it is about a durable practice. LeClair is adamant that despite The upshot is a trend towards outcome- advances in digital tools and, in based advice as opposed to trying to When it comes to training, working in particular, robo-advice, financial advisers remain very relevant. identify the next investment opportunity. teams has been increasingly important given the need to work more closely For Natixis, for instance, one of the A similar thing can be said of the gradual with specialists. Retirement solutions key tenets of its durable portfolio progress that LeClair has observed on are also a priority. Investment-related construction approach is risk. As his trips to Asia over the past 12 to 18 training remains important too, in terms long as human-to-human advice months. “If I compare the meetings I of the use of alternatives. is the only way to deal with fear, greed and other emotions which had last year with the meetings I had clients experience, then advisers this year, it seems there is more interest “Too many advisers around the world will stay integral to the planning in this concept.” still think about portfolio construction process. “The greatest value any as mainly stocks and bonds in a 60:40 adviser provides any client is to FORGING THE RIGHT BEHAVIOUR split,” says LeClair. “We are very pas- keep them focused on their goals,” Natixis has built an entire digital plat- sionate that the average adviser can he adds. form and offering around this more understand more about the role of al- In line with this, he believes holistic approach to practice develop- ternative investments.” there is still a place for active ment. “When it comes to portfolio management, rather than purely construction, everything we do is driven This year in Asia, the Natixis Advisor taking a passive approach just to by having a durable approach that can Academy has rolled out close to 10 benefit from lower fees. deal with any market,” explains LeClair. classroom-style sessions in Singapore, for around 500 people in total at private and It has looked to develop this globally retail banks, IFAs and insurers, and two across different markets for retail dis- sessions in Hong Kong, for 80 advisers. Yet this doesn’t apply to the majority. tribution channels. And after 15 years “The average failure rate over the past doing this in the US, in 2015 the Natixis MAKING THE BUSINESS 30 years in the US, and still to this day, Advisor Academy came to Asia. SUSTAINABLE in terms of people who become a finan- The better advisers in more estab- cial adviser, is probably around 85% to More broadly, the Academy focuses on lished wealth management centres 90%,” says LeClair. “This isn’t because key areas: practice management, includ- like the US, for instance, already they don’t pass the exams; they don’t ing client acquisition and retention, embrace the concept of continuing make it because they can’t get enough along with branding for individual advis- professional education. clients to keep their business sustainable.” ers, communication skills and leader- ship; durable portfolio construction; This goes beyond what they are simply For Natixis, the approach to trying to and learning. forced to do by the regulator. “Some address some of these challenges, is to advisers are hungry to get better,” ex- help more advisers get paired on a team. One of the things that LeClair is proud- plains LeClair. “The best advisers I know For example, explains LeClair, an adviser est about is the regular use of personal- in the US have an attitude of ‘teach me, who is in his 50s might work on behalf ity testing. He believes that one of the show me how can I learn’.” of 200 families, and manage USD300 ways to make practices more valuable million or so in AUM. So he can help and successful is to make the team Beyond just making more money, both bring in another adviser in a kind of dynamic better. This enables him to for themselves and their clients, the apprenticeship to develop their skills identify their strengths and to delegate best advisers he works with in the US across financial planning, investment away anything which doesn’t come as want to make a difference in their and rain-making in terms of asset gath- naturally to them. clients’ lives. ering via client acquisition.
ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 3 PRACTICE MANAGEMENT - SKILLS
Investing in the ‘right’ conversations with clients
How much of our resources and energy are we really prepared to invest in the one- and-only solution for any sustainable wealth management practice: competent, truly client-centric professionals? By Kees Stoute
How far are we really prepared to go in Many of the threats and challenges for ENHANCING COMPETENCE order to resolve one the key dilemmas the wealth management industry are In Singapore and Hong Kong, for in our industry? really difficult to manage. Yet the lack example, many practitioners have Con- of professional, confident, value-adding tinuous Professional Development Allow me to elaborate a little. In view professionals seems manageable. (CPD) requirements. of the many interviews and presenta- tions at wealth management confer- BEING RELEVANT According to these, they are expected ences, we are told that the industry To address the issue of competency and to study one or two hours per month. suffers from a shortage of professionals capability in wealth managers adding Although not a lot, for many this obliga- who are able and confident to add value value to clients, we need to teach prac- tion is considered a serious and demor- to the lives of their clients. titioners to confidently enter a client alising burden. meeting without a product in mind. We all would love to see the industry Even executives are reluctant to add convert from being predominantly We must help them to be more relevant pressure on their staff. product-focused and limited in value- and able to have a conversation with add, to being client-centric, needs- their clients about the things that really To quote one: “They all have full-time based and consequently highly value- matter to them: what are their dreams? jobs. It is not realistic to expect from adding. We would embrace the What are their worries? Are they living them to spend too much of their valu- consequential higher dependence on a happy life? How do they manage their able time on training.” more stable and predictable recurring wealth now? Etc. income rather than on the current trans- In short, this suggests that they are so action income and commissions. Only once we dare to have these types busy doing the wrong things, that they of conversation, will we be able to help don’t have the time and energy to learn The business environment for wealth our clients to make their wealth instru- the right things. management firms is challenging. mental for the life they want to live. Markets are difficult; the costs of doing If having higher-calibre professionals is the business have risen tremendously; And this is precisely the type of con- one of the answers to coping with the technology enables new entrants, such versation that forms the basis for long- difficulties in this industry and to- in as robo-advisors, to further heighten lasting, value-adding relationships. creasing recurring income, then why the competitive challenges, etc. not make a sincere effort to get the Back to the first question: are we – practitioners to the desired level of It has become tough to survive. A institutions and individuals – really competence? number of players have even already prepared to invest the time and money decided to pull out of Asia altogether. into training? Contact Kees - [email protected]
4 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 AVIVA INVESTORS Investing in the ‘right’ For specifi c investor outcomes conversations with clients
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C36015.002_Avivia_Investors_Hubbis_Jan16_297x210_v1.indd 1 15/01/2016 16:40 PROFILE
Putting clients back at the top of the agenda
OCBC Bank is making its actions speak louder than words in terms of putting its customers first. Dennis Tan explains how the bank is putting this in practice by simplifying processes to enable a better customer experience and connectivity with clients.
Customer-centricity is widely espoused by many senior banking leaders, but all OCBC Bank understands the importance of too often, it is poorly executed. incorporating a fair mix of both face-to-face customer This is not a new concern and neither interactions with the is it an easy one to fix. Today, bank convenience of managers often get caught up in the digital mobility daily grind of servicing customers’ Hand-holding customers during difficult and volatile transactional requests, and this diverts market conditions is resources away from more value- increasingly important, adding activities. especially as this can lead to all-important Banks need to ensure they remain top- portfolio reviews of-mind among its customers. In order OCBC Bank is making wealth management to achieve this successfully, banks need even more accessible to to consistently deliver high standards of customers by enabling service to keep their customers satisfied. DENNIS TAN them to track their portfolio OCBC Bank on their mobile devices This is the approach that OCBC Bank Much-needed industry employs. OCBC Bank understands that change must start internally, via education it is still important to incorporate a fair and continued mix of both face-to-face customer in- simplification – of teractions with the convenience of DEALING WITH BLIND SPOTS processes, systems and the digital mobility offered through contin- In light of market nervousness and overall operating model ued investments in its branch network heightened volatility, investors are gen- and digital wealth capabilities. erally holding back on engaging in
6 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 further investments. Dennis Tan, head service offering more tailored to the services like portfolio management and of consumer financial services for OCBC youth segment. new investments. Bank in Singapore, sees this as only natural and, at such times, he feels that For example, OCBC Bank created its OCBC Bank is making wealth manage- banks ought to handhold their custom- ‘FRANK by OCBC’ proposition five ment even more accessible to custom- ers even tighter. years ago. The intent for setting up ers by enabling them to track their ‘FRANK by OCBC was to serve the portfolio on their mobile devices with “This [type of reaction] is human nature under-banked youth population. the OCBC OneWealth app. when they look at their portfolio and it is marked-to-market and they see a In order to identify with the younger This was launched in March 2016, an discrepancy [with what they expected],” crowd, FRANK by OCBC branches are investment one-stop-shop that provides says Tan. designed and made to feel like retail customers – both beginners and sea- stores rather than traditional bank soned investors – with convenient “So it’s important for us to really weather branches. FRANK by OCBC stores are access to market information, invest- this period. We share information and also heavily equipped with savvy self- ment ideas and personalised alerts on need to remind the customers of their service digital facilities for customers their existing investments. original intent.” to browse and apply for products. The OCBC OneWealth app also enables customers to now buy unit trusts di- rectly on their mobile device.
With this, OCBC Bank has further de- “Digitalisation is an integral part of the development mocratised wealth management by of any bank and OCBC Bank has always been at the making access to investment informa- forefront with its industry-leading innovations.” tion and wealth products within reach of more customers.
To that end, customers can now also share their wealth knowledge, gleaned from articles and OCBC Bank experts’ However, there is still a general lack of “By having this kind of concept, we are analysis on the app, to their social net- initiative among investors to do regular able to engage younger customers for works, extending investment knowl- portfolio reviews. While holistic wealth the first time,” says Tan. “They may not edge beyond individuals. management necessitates constant necessarily come in for repeated visits, portfolio reviews, most investors these but we feel that it’s a good showcase.” Customers can also login conveniently days are too busy to sit down and have to the app with just the touch of their these fundamental conversations with REAL CONNECTIVITY fingerprint to see all their investment an adviser. In present times, digitalisation is an holdings, thanks to OCBC Bank’s One- integral part of the development of any Touch biometric authentication technol- “People generally feel strongly that this bank and OCBC Bank has always been ogy, and share articles from the One- is a critical need and they want to do at the forefront with its industry-lead- Wealth app on social media apps it, but the reality is that they just don’t ing innovations. including Whatsapp, Facebook, LinkedIn seem to be able to devote time to that,” and Twitter. explains Tan. The bank knows the value technology can bring to their customers, such as Further, OCBC Bank is the only bank in BRANDING FOR MILLENNIALS diverting valuable time away from filter- Singapore which allows customers to Tan and his executive team have also ing through hordes of financial informa- open an account through an app, been working hard at making their tion to providing other value-creating without needing to step into a branch.
ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 7 PROFILE
The OCBC Open Account app is the “The sales people in this industry are first completely remote account opening generally more focused on the ‘here OCBC Life Goals app on smart phones. and now’, which mean the specific pot of money, or the latest product.” Lunched earlier this year, this Customers can apply for the popular helps customers at different OCBC 360 Account on their mobile His view is that change must start in- life stages plan and achieve their goals in a holistic way phones or tablets, without the need to ternally, via education and continued by managing their cashflow visit a branch. simplification – of processes, systems wisely, safeguarding their assets or the overall operating model. adequately and building Technology brings about convenience their wealth. and Tan has seen the many benefits Only when the belief is reinforced can it can bring. However, there will the ideal experience be translated to the It recognises that every customer is unique, each with always be a need for the personal end-user, which is for all staff to place their own aspirations and touch in the banking industry, espe- customers at the heart of the business, appetite for risk. cially in wealth management. to understand their financial goals. That’s why OCBC Bank aims to understand every customer’s needs and offer personalised solutions to help them get closer to their goals.
“The aim is to become more focused on goal-based Manage - this is about advisory. This will give us a competitive advantage customers managing that will bring us closer to the client because their cash flow by setting aside money for their it will speak exactly to their needs.” daily transactional needs, emergencies and other financial commitments, so that their accustomed lifestyle need not be compromised
“The individual is still important,” he Available on OCBC Bank’s internet Safeguard - this is to protect explains, “because the client wants it banking and mobile banking app, Money themselves, loved ones and and requires it.” In$ights is one example (see box). It assets from unexpected automatically consolidates customers’ misfortune Some customers still do prefer speaking finances into simple, interactive and Build Wealth - this is to to an adviser for their financial matters. insightful dashboards, enabling custom- create a diversified portfolio Similarly, more complex transactions ers to track expenses in real-time, that can provide stability of and high-ticket volumes still require manage budgets and get social com- returns in-person verification and can only be parisons of financial behaviours. completed in the branch. To do this, OCBC Bank offers handy apps to customers to track “It’s a journey that we have started,” their finances on-the-go. SIMPLIFICATION explains Tan. “We are definitely not Ultimately, the long-term vision that there yet, but the aim is to become For example, OCBC Money Tan hopes to achieve for the consumer more focused on goal-based advisory. In$ights is the first fully- banking industry is for it to scale greater This will give us a competitive advan- integrated and automated heights of customer-centricity. He rec- tage that will bring us closer to the personal finance manager in South-east Asia. ognises that there is still a disconnect client because it will speak exactly to that needs to be addressed. their needs.”
8 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 WealthBriefing Ad 210x297 APAC - 2016.indd 4 20/05/16 16:13 FEATURE ARTICLE
Making Indonesia’s tax amnesty more meaningful
While there are mixed views over the extent of the success (or not) to date of Indonesia’s landmark tax amnesty scheme, there is little doubt about the positive signals it has sent about the government’s intention to develop the fundamentals for a more sustainable wealth management industry.
The results and views over the extent This should come through asset repa- of the success (or not) to date of Indo- triation, fairer tax reforms with an ex- Panel speakers nesia’s tax amnesty scheme are mixed. panded tax base, and increased tax revenue that is very much needed, Prijohandojo Kristanto, What there is little doubt about, especially to fund development and Chairman, PB Taxand Lilis Setiadi, President however, are the positive signals it has infrastructure in the country. Director, Batavia Prosperindo sent about the government’s intention Aset Manajemen to develop the fundamentals for a more LIMITED INITIAL IMPACT Kylie Luo, Executive Director, sustainable wealth management indus- From one perspective, the first phase Leader, Asset & Wealth try going forward. of the programme, from July to Sep- Management (Tax), BDO Tax tember 2016, has results in a take up Advisory Herdin Syafari, Tax Director, Ultimately, the landmark Tax Amnesty of less than 1%. This equates to just Rawlinson & Hunter Programme is intended to accelerate 422,000 participants or so, out of an (Singapore) economic growth and restructuring. estimated 50 million overall. Shanker Iyer, Founder & Chairman, Iyer Practice Advisers Yuki Diwinoto, Tax Planner
This indicates to some market practi- tioners a continued a lack of trust in the government. And for businessmen who are located further away from Jakarta in this large and geographically-dis-
10 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 transparency over the asset holdings IN WHICH OF THE FOLLOWING AREAS WILL THE TAX AMNESTY PROGRAMME HAVE THE BIGGEST IMPACT? are no longer what many clients per- ceived them to be. 30% 20% New wealth to invest Instead, these individuals will look to domesõcally banks more for the value they can bring Local banks/insurers able to in terms of diversifying portfolios and compete with foreign players risk. Further, they are more likely to seek Accelerate economic growth simpler structures that can enjoy tax and restructuring via more tax revenue efficiency, as well as be compliant.
50% REFORM MOMENTUM Key now for the Indonesian govern- ment, it seems, is to propose some Source: Hubbis Indonesian Wealth Management Forum 2016 specific tax reforms or measures to set the landscape for the future. Many practitioners say such action is a neces- persed country, they don’t always sense normal consequences is something not sity to ensure that the Tax Amnesty the necessity. to be ignored. Programme can be the catalyst for the right approach going forward. On the other hand, and with a perspec- Further, there is a real danger – or at tive from Singapore as a key offshore least uncertainty – of not knowing what But tax reforms don’t necessarily need hub for the region, Indonesian clients will happen when the window closes. to be about legislation. Instead, they have gradually come around to the idea could focus, for example, on tax admin- of participating in the programme. HNW individuals and their advisers there- istration, to streamlined procedures to fore need to think longer term, espe- reduce some of the complexities around Part of the reason is their fear of cially against the backdrop of a world completing required documentation. missing out, which resulted in them frantically seeking advice in August and September on whether to partici- pate – and how much to declare. And relative to some amnesties from other “Key now for the government is to propose specific tax countries in the past, practitioners say reforms or measures to set the landscape for the future.” they are encouraged.
Where there is still concern among clients as a result of uncertainty at this stage, however, is what will happen as which anyway is shrinking and getting With greater certainty to the situation a result of the government knowing more vigilant in terms of transparency. post-tax amnesty, it would give greater more about the tax situation of those confidence to wealthy individuals as well participants. Such feelings are based on One of the outcomes which seems likely as advisers during the second and third a history of seeing regulations change as a result of the tax amnesty, agree prac- phases of the programme – making them at short notice, meaning that regularis- titioners, is a consolidation among Indo- more likely to be successful.This would ing tax matters is a tough task. nesian clients in the number of private make it more likely that taxpayers can bank accounts they have offshore. utilise wealth management products TAKING ADVANTAGE such as bank deposits, along with non- Either way, such an opportunity to The benefits of having multiple banks bank products such as mutual funds, declare offshore wealth without the to benefit from ‘secrecy’ and reduce bancassurance and derivatives.
ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 11 COVER STORY
Mashreq Bank maps out wealth management journey
Subroto Som of Mashreq Bank talks to Hubbis about his plans to leverage the institution’s heritage and retail customer base to offer wealth management products and services to clients of all types and, eventually, across generations.
Mashreq Bank’s wealth management parts of the world, because investors and private banking business has quickly hold a lot of cash and property, but become one of the drivers behind the the numbers invested in equities, institution’s growth in its overall retail bonds and other asset classes is rela- banking division. tively low,” he adds. “So there is a good opportunity for more penetration of “This is a new focus for us and since I those products.” joined Mashreq about 12 months ago, I see the biggest opportunity for growth WELL MATCHED coming from the wealth management Wealth management appeals to Som space, followed by SMEs and then per- for several reasons. For one, it uses very sonal banking,” says Subroto Som, ex- little capital, creating a healthy return ecutive vice president and head of retail on capital. banking group at Mashreq Bank, and a veteran banker with more than three Although cost-to-income ratios can be decades of experience in all aspects of traditionally high in the wealth manage- consumer banking across Asia and the ment business, Mashreq Bank operates SUBROTO SOM Middle East. smartly and balances the book across Mashreq Bank different parts of the business. This is building on solid foundations in personal banking via mortgages, per- Secondly, Som is keen to ensure he can sonal loans, credit cards, and in online, serve clients when they need to protect, mobile and branch banking. preserve or grow their wealth. customers. “These include transac- tional banking, online and mobile “There is a lot more investible wealth This enables him to cross-sell various banking, and mortgages which are be- [in the GCC] than you see in other complementary products to existing coming a very big wealth product,” he
12 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 explains. “Property is an asset class for petite and returns expectations. Next growth and investment property is good for Som in ensuring a successful busi- Readying for growth for people to park their money for long- ness is putting the right infrastructure term appreciation.” and people in place. Mashreq Bank is the oldest bank in the UAE and has Another driver for Mashreq Bank’s “There are a lot of new technology de- branches across the Emirates, as well as Europe, the US, Asia wealth management strategy is the velopments today, including robo-ad- and Africa. volume of customers who come through visory, and online statements and its network and whose needs evolve portfolio analysis,” he explains. “We are The bank’s retail network is towards one or a combination of protec- investing in that space to get this right.” across the UAE, Egypt and tion, preservation and accumulation. Qatar, and consists of three From a people perspective, this also major segments – wealth management, personal banking “The biggest challenge in wealth man- includes certification and qualifications. and business banking. Wealth is agement is customer acquisition and The third key goal for Som is leveraging segmented into Mashreq Gold, [controlling] customer service cost,” he all of this to drive growth. “If you have an affluent-focused offering, says. “If you have the customers, you the right people and technology, you and private banking, which is must fulfil their needs. That’s why we should be able to navigate the chal- relatively new. are in the wealth business. lenges in this environment, both from “Mashreq Bank is quite unique the risk and return perspectives.” in the sense that we are a local CLEAR ROADMAP bank in the UAE and we provide The potential is vast, and the bank’s The reality for many clients has got all kinds of asset classes, from journey of growth has only just begun. increasingly harsh in recent years in global to GCC,” explains Som. Som estimates that the penetration of this respect, changing their expecta- To give the bank more firepower wealth-related products to the bank’s tions and tolerance. “Managing ex- overall, it can count on Mashreq Capital and Mashreq Securities. customers is currently just over 10%, pectations is a big challenge for the but this is starting from a low base and industry,” says Som. Som also bolstered his team growing fast. around the middle of 2016 by Where the new risk-return equation appointing Rajesh Malkani as At the moment, Som and his team are – coupled with the increasing openness head of private banking and actively acquiring new customers – not of other asset classes – might have an wealth management business, along with a team of qualified even yet ‘farming’ them. influence on client portfolios, he adds, RMs, product managers, the key is in motivating them to become and service and execution “I want to grow this significantly,” he more diversified and balanced. managers, to look after the says, “but by some of the benchmarking product, segment and delivery. we have done so far, our profit per cus- Ultimately, this all ties into delivering a tomer is at the higher end.” unique customer experience, which is He also recruited Basker Rangachari who was previously a key differentiating factor today in this Standard Chartered’s global To get to where Som wants the wealth segment of the industry. head of brand and retail management business to be, the first marketing, and is now of his three main goals is to ensure The advent of online and mobile capa- responsible for building the he brings on board the right type of bilities, in particular, have created the positioning of Mashreq’s brand, customers, from a KYC and AML point potential for an integrated, omni-chan- marketing and customer experience. of view. nel experience which also allows for personalisation. And in striving to make “We have built a competent This requires the bank to do the right banking simple and fun – albeit at the and sizable team, and we had risk profiling to understand client needs retail end of the spectrum – Mashreq some good growth in 2016,” well enough to service them or provide Bank recently launched the first mobile adds Som. product options to match their risk ap- service of its type in the region to offer
ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 13 COVER STORY
customers a mobile banking app which tions. “I think we are getting to a place of different profiles of customers, to be enables them to transfer funds using where that shift [in fees] will be easier, able to deliver the right level of perfor- Siri, Apple’s virtual personal assistant. where wealth managers get paid on the mance to them. Transactions get confirmed using either outcome of a solution as opposed to the user’s smartphone password just selling it.” “This is where I think wealth specialists number or thumbprint identification. will become even more important,” adds When this will happen in any significant Som. “The advisory function will RAISING THE BAR ON ADVICE way is anybody’s guess, but this transi- become more critical and will be paid Another hurdle for the development of tion is in the interest of the customer for, but will be more defined in scope.” the wealth management industry in the and the wider industry, adds Som. Middle East is the ability of banks to BEING MORE HOLISTIC deliver ‘advice’ to their clients, via A FAST-EVOLVING INDUSTRY The next few years will also see Mashreq needs-based conversations. In the meantime, various dynamics are Bank develop its offering to provide playing out as the wealth management more value-add to the overall business The current industry business model market in the Middle East evolves – and personal assets of customers, at tends to be primarily transaction fee- including a host of providers vying for relevant points in their lifecycle. For based – which often leads to product customers’ assets and attention. example, this will include corporate pushing and the churning of portfolios.
A shift to a more portfolio or perfor- mance fee-based approach, therefore, may indeed eradicate some of these problems in the region. “We can bring the rest of the bank to the customer, which is the biggest plus of a more holistic “The fundamental driver of this change commercial bank.” will come when the way in which revenue is generated in banks or other wealth management institutions moves away from transactions and towards portfolio management,” says Som. First, explains Som, there is more infor- finance for the business, transitioning mation which is readily and quickly of wealth to the next generation and At the same time, he is realistic that the available to individuals than ever before legacy planning. willingness of local investors to pay a – possibly too much. fixed fee for the service and a perfor- “My personal view is that there is con- mance fee on the outcome is limited As a result, some level of screening is nectivity between business owners compared with the US and Western needed to control the quality, relevance and wealth management, and in my Europe, for example. “Most private banks and timeliness. experience, while they may keep their [in Asia and the Middle East] have an accounts separate, their behavior de- offering at the entry level which is still Secondly, technology is making transac- termines how we manage them,” says product and transaction-based,” he adds. tion execution available to the cus- Som. Combining the offering also tomer wherever they might be, for an reduces operating costs significantly At the higher end of the spectrum, by ever-wider number of products and and creates synergies. contrast, discretionary portfolio man- asset classes. agement takes a more conducive ap- “We can bring the rest of the bank to proach to aligning the needs of custom- Yet even armed with the information the customer, which is the biggest plus ers and the bank. He believes and online or mobile tools, there is still of a more holistic commercial bank as technology will help to lower the cost a vital role for wealth managers to play opposed to a boutique wealth manage- of managing investments and transac- in reviewing the objectives and needs ment house,” he adds.
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rz_imtf_inserat a4_Icos.indd 1 03.06.2016 15:36:27 EXPERT INSIGHTS
How Citi is enhancing its advisory offering in Asia
Paul Hodes explains how Citi is developing its overall proposition for clients in the region, as well as improving the education of staff to drive more needs-based conversations.
A huge amount of work has been their overall wealth – not only what they them to deepen their understanding, underway behind the scenes within have with that institution, but all of it. not only their holdings, but also of the Citi’s wealth management business extent of the diversification that exists to raise the level of advice it provides The process is leading to strong sales, within their investment portfolios, ex- for its customers. along with positive feedback. “Advice can plains Hodes. lead relationships in terms of deepening “The real differentiation for a client is understanding, and ultimately driving our This also factors in the client’s own advice,” explains Paul Hodes, head of wealth management business.” company to understand whether that’s privately or publicly held, and what the correlation is between their business and personal assets, he adds.
“Advice can lead relationships in terms of For the bank’s affluent customer base, meanwhile, the Citigold Diversification deepening understanding, and ultimately driving Index (CDI) within the Total Wealth our wealth management business.” Advisor tool is a relatively simple way to help clients understand how well their portfolios are diversified.
The CDI measures portfolios in terms consumer bank, wealth management in MORE TANGIBLE of how they are placed versus the rec- Asia Pacific and EMEA. For the bank’s HNW segment, for ommended model portfolio and the example, clients now get access to much underlying holdings, says Hodes. It also And under that banner it includes pro- more in-depth and analytical tools to tests potential concentration risk – in viding analytics on client portfolios and review their portfolios. This aims to help terms of the extent (or not) to which
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EXPERT INSIGHTS
clients’ portfolios are diversified across bank, like their own company’s stock, Education a priority geographies and sectors, for instance. or their real estate.
In line with the commitment to This changes the dynamics of the ad- “Wealth managers need to understand raising the bar on the advisory viser-client conversation markedly. how the portfolio performs relative to offering Citi delivers for its some of [the client’s] most important clients, Hodes knows this requires Historically, different bankers may have assets,” says Hodes. an advanced skill-set for his had different perceptions about an in- relationship managers (RMs). dividual portfolio, explains Hodes, cre- DRIVING DIVERSIFICATION To deliver on this, in late 2015 ating a very subjective discussion on These are critical tools for wealth the bank launched an exclusive portfolio diversification. managers, to enable them to be able training programme with the Wharton School of the University of Pennsylvania – as part of a global initiative to better educate its front-line staff.
The goal is to train 300 to 400 “Being able to implement the Total Wealth Advisor Citi advisers every year for the tool and being able to quantify to a client whether next three years. their portfolio is diversified or not, leads to a
The programme begins two much richer conversation.” months prior to advisers’ on- campus training, with a series of webinars and online courses. Following their on-campus experience, advisers participate in two additional months of on- “Now, being able to implement the tool to work with their clients to reassess the-job training. and being able to quantify to a client goals and risk tolerance, as part of whether their portfolio is diversified or efforts to ensure their portfolios really The curriculum includes instruction and experiential not, leads to a much richer conversa- are suitable. learning to help participants tion,” he says. enhance their business acumen And against the backdrop of volatile and leadership skills. So, when “The next step is to take a look at the markets for the past 18 months, creating recommending a product, for client portfolio and what they are and maintaining consistent, appropriate example, this should help RMs holding versus the related model port- portfolios is more important than ever. understand what the academic research is behind it. “When we folio with selected premier funds.” talk about portfolio or manager For almost a year, many clients experienc- selection, about diversification, At the same time, Hodes says the port- ing such uncertainty have been asking or about risk versus returns, we folios are back-tested, to understand themselves questions like: ‘Am I meeting try to think about what they what core relations may exist. my most important financial goals?’ And, really mean,” says Hodes. ‘Is my portfolio really suitable?’ RMs need to go into the process For example, he explains, clients may knowing how to calculate have investments in the portfolio that Hodes says it is critical for wealth man- or measure this, he adds, appear to be diversified. agement providers to be in touch with so that they will get into a their clients during such times, to help more sophisticated level of But bankers need to determine the them reassess their goals and tolerance conversations with clients to extent to which they are diversified for risk, review their portfolios, and provide ideas to them. against some of the client’s largest hold- meet the objectives that clients are ings, which might not be held in the comfortable with.
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Specifically, each wealth manager needs This has included hedge funds or liquid to have a clear methodology and frame- alternatives, as well as real estate, Looking for more from work, to track what clients’ have asked private equity and other diversifiers product partners for, as well as their performance in such as gold. respect of these goals, he explains. For Citi to be able to deliver This is all the culmination of a three- on its advisory ambition for its clients, Hodes is looking Further, institutions should be able to step process: first, understanding a for a certain level and depth analyse the portfolio and share these customer’s goals to be able to set up of support from the asset insights with their clients. a financial plan; secondly, having an management firms and other asset allocation that dynamically re- product providers the bank The practical implementation of such balances; and thirdly, using the engine, partners with. advisory tools is having the desired which consists of the products that As a starting point, these impact, both in terms of growth in fit into the plan. firms must have people on the ground to support the RMs in local language, with an in- depth understanding of the underlying product. “Ultimately, when wealth managers review the Yet as the markets have models they use to recommend funds, they need matured in Asia, bankers to be able to assess whether they have provided need less support on what the incremental value to clients.” funds are themselves. Instead, they need to know more about how a manager actually differentiates itself from its peers. overall AUM and net new money – for ADDING VALUE This might be, for instance, in deposits and investments – as well as According to Hodes, banks need to terms of management style, in diversification, notes Hodes. create tools to help advisers monitor underlying strategy, execution client portfolios in this way. Plus, they capability or research. “We are seeing clients in each one of need to ensure their investment special- our segments be much more diversified ists work closely with the front-line. in their portfolios,” he says, “away from fixed income portfolios.” Ultimately, when wealth managers review the models they use to rec- but I think that’s very good for the in- He adds that while clients might be ommend funds, they need to be able dustry,” adds Hodes. growing their equity exposure overall, to assess whether they have pro- that is being done by taking a more vided incremental value to clients, “The key [for advisers] is to be able to balanced or multi-asset approach. adds Hodes. make the transition from product sales to real advisory, to be able to under- The volatility in global markets has also The goal is to give strong and holistic stand clients’ needs and then build fi- led to recommendations by Citi that advice, and then be able to track it in nancial plans around them.” its clients diversify into some alterna- good and bad times. tive investments. They can then also help those clients “As clients in Asia become more sophis- understand on a day-to-day basis how The aim of lower correlations is to main- ticated and experienced with investing, they are doing against their most im- stream equity markets. they are becoming more demanding, portant goals.
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Keeping clients at the heart of digital disruption
A successful digital strategy is one which strategically focuses on creating value for the business as well as for clients, says Ketan Samani of UBS Wealth Management.
For UBS Wealth Management, digi- chief digital officer for UBS Wealth But this is down to much more than tialisation has become a central theme Management in APAC. smart ideas and new tools. that runs through all aspects of its global business – driven from the highest level INFLUENCING HEARTS The biggest driver of a digital culture in its executive ranks. AND MINDS is getting all staff to live-and-breathe The bank’s Zurich office was the main it without any feeling of being threat- In fact, the world’s largest private bank hot-bed of innovation initially. But Asia ened by the power – and (lower) cost is so focused on innovation in this way Pacific has its own mission in this area – of technology. Having the right mind- that it has spent hundreds of millions and has been quick to catch up. set to foster and drive change is also of US dollars to date on various digital and IT initiatives.
Plus, as the incumbent, it has been quick to recognise the growing competitive pressures from fintechs and start-ups. “Banks are not perceived as having agility or being innovative, but we are focused Yet the bank’s digital priorities are across precisely on these areas.” the board – from ensuring an impactful client experience to data security to cultural transformation to increasing productivity through innovation.
“Banks are not perceived as having The overall goal, says Samani, is to a central theme across team collabora- agility or being innovative, but we are “future proof” the bank’s leadership in tion and execution at UBS Wealth focused precisely on these areas,” ex- wealth management by defending its Management. In line with this, the bank plains Ketan Samani, managing director, turf from competitors old and new alike. has focused on conveying to is client
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advisers (CAs) the role that digital plays help get the investment buy-in from not only in assisting them in getting senior management.” How to create a clear closer to clients, but also in being able and differentiated digital to add more value to them and stand- A second key factor is scalability. This strategy ing out from the competition. is based on the fact that the bank strives to each global consistency, yet with Although many clients might voice their opinion about the This offers a glimpse into the impor- local deployment. product and service features they tance the bank places on making its want from a digital experience, digital strategy central to being able to The third component to determine the implementing something that achieve its business goals. value of a digital initiative is its flexibil- they will really use will make ity and robustness. “We look for agility,” the difference. “Often, in large banks, digital gets left says Samani. “And we look to be able For UBS Wealth Management and to the technology, product or servicing to test and learn from it, so that we Samani, it is fundamental to abide teams, with the C-suite trusting these know if it will work or not.” by this philosophy. line managers with the initiatives,” says Samani. “At UBS Wealth Management, In general, the reliability of a solution “We need to follow a very focused I often see the business head person- is key, which can often a question- approach and create partnerships ally involved as this relates to a spe- mark over some of the fintech offer- with clients and colleagues,” he says. cific business need.” ings to date.
This is also essential if the bank PRIORITISING Despite the claims to the contrary from wants to earn a fee from what Such a spotlight from the top therefore a lot of platforms in the market, Samani it delivers to clients. “We must puts digitalisation on a different footing says that as soon as content and data at every point in the client at UBS Wealth Management, in com- gets put through a system, the expect- experience, add value to them via our advice, specificity of content parison to many industry players, in ed results don’t materialise. This raises and service excellence,” he adds. terms of how it can contribute to the issues relating to security, for example. overall business. MEASURING THE SUCCESS “The amount we invest in digital Where Samani and his team are satis- hasn’t come without being account- fied with the potential of a digital creates and the amount of cost-saving able for creating value for the bank,” project, he then turns to measure its that becomes possible. explains Samani. likely effectiveness. Connected to this is assessing whether More specifically, the strategic focus to A key way to do this is via client it also provides revenue and therefore make a meaningful impact is based on metrics. “We must pass the test of bolsters probability. three elements. usability,” he explains. “Whichever parts of the service are being digitised, Ultimately, Samani says the focus And these are all critical factors when they must actually be used and needs to be on delivering a compelling UBS Wealth Management selects its adopted by clients.” client experience. “At the end of the technology partners. day, the profitability of digitalisation To support this and at the same time only comes when the client adopts and First, the bank looks at whether the encourage a higher adoption ratio by uses the technology.” proposed solution addresses a real CAs, the bank also assigns scores so need of the business and clients in a that these individuals will promote the Yet he also acknowledges that a con- measurable way, not just conceptu- tool to drive sales. sistent client experience across ally. “In the lab, we deliberately create service touch-points requires the bank a prototype that produces a numerical Another benchmark relates to a mix of to look beyond digital and invest also measure,” he explains. “This can also the level of efficiency the new initiative in its staff.
24 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 Hubbis Advert V4.pdf 2 30/04/2015 20:58
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Capturing Asia’s digital potential
While everyone in Asia is talking about ‘going digital’, speakers at Hubbis’ annual event in Zurich explored what is required to service the region’s vast number and variety of wealth management firms, and customers, with the right solutions.
The world of wealth management is ‘digital’ for many years, decades even, clearly all about digitalisation at the given that they been introducing soft- Panel speakers Take Your Investment Advisory moment, especially in Asia. ware very early. Francisco Fernandez, Group Service to the Next Level As institutions strive to bring efficient What is happening today, he explains, Chief Executive Officer, Avaloq and trustworthy banking to their cus- is the digitalisation of what he calls “the Mark Buesser, Chief tomers, going digital is one driver to last mile of banking”. Executive Officer,IMTF Bring greater insights and digital capabilities fulfil such a mission – in combination Michael Stemmle, Founder with operational excellence and a net- This refers to the interaction between and Chief Executive Officer, to your clients. worked financial market architecture. the consumer and the bank or indi- additiv vidual wealth manager. Ralph Mogicato, Fintech Thomson Reuters Digital Solutions assists wealth managers and professional Angel Investor and According to Francisco Fernandez, advisors to effectively realize their clients’ investment goals. Cross asset financial Entrepreneur group chief executive officer of “The consumer is being integrated into market content, analytics, and web-based tools can be delivered direct to your Avaloq, banks have essentially been the value chain,” he adds. company intranet/extranet, market data system or mobile platform. Craft better strategies, enhance your client engagement, and offer greater value.
In line with this, online technologies • Turn-key financial market data, news and analytics are enabling new business models, • Flexible feed delivery options to fit your workflow and internal such as fintechs. distribution platforms
And some of these technologies seem • Powerful tools that are web-ready and optimized for mobile applications to have clear disruptive potential, for • Design, delivery and hosting of your own customer-facing website or app example blockchain. Learn more: financial.thomsonreuters.com or contact your representative. While this movement is generally global, Fernandez says it tends to be
© 2015 Thomson Reuters. Thomson Reuters and the Kinesis logo are trademarks of Thomson Reuters and its affiliated companies. S026784 10/15. 26 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3
S026784_A.indd 1 14/01/2016 14:04 Take Your Investment Advisory Service to the Next Level
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S026784_A.indd 1 14/01/2016 14:04 FEATURE ARTICLE
even more aggressive and faster in Asia, where consumers tend to be particularly tech savvy. “The consumer is being integrated into the value chain.” TAKING A LEAD China is perhaps the best example of this, especially in terms of the current fintech environment.
There is a willingness in the country to FRANCISCO FERNANDEZ pump billions of US dollars into start- Avaloq ups with the expectation – and accep- tance – that some won’t survive.
The ability to foster an innovative spirit relies on such a mentality, therefore putting China in a good position to test products that can be rolled out world- wide, and quickly. “There is a willingness in China to pump billions of US dollars into start-ups with the expectation As a result, Ralph Mogicato, fintech – and acceptance – that some won’t survive. angel investor and entrepreneur, has little doubt that innovation going The ability to foster an innovative spirit forward will come from Asia, not relies on such a mentality.” markets like Switzerland.
SCOPE FOR SWISS VENDORS Yet there is certainly still a lot of scope for Swiss-based technology vendors to “In Asia, we see a strong tendency for For his regulatory-related solutions, access the Asian wealth management brand. Asian banks like what they see these are considered to be not only a space, if they approach this opportu- as being ‘proven’ and ‘safe’,” says Mark requirement, but something which has nity in the right way. Buesser, chief executive officer, IMTF. also already been tried-and-tested in a competitive wealth management market.
As a result, this creates a certain level of comfort that they can be effective in “Innovation going Asia, too. forward will come from Asia, not Switzerland.” In addition to Switzerland’s centuries of financial services history, locally- based vendors have also learnt to work with niches and in a variety of languag- es, creating similarities with Asia.
“Asian markets are learning from more RALPH MOGICATO established countries,” says Michael Stemmle, founder and chief executive officer, additiv.
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“We can transport 500 years of knowl- Empowering edge and experience in Swiss banking “In Asia, we see a strong to Asia,” he adds. client service tendency for brand. Asian banks MAKING IT SIMPLE like what they see as being professionals One of the key factors expected to de- ‘proven’ and ‘safe’.” termine which wealth managers are most Vermilion Software is the leading Aboutsuccessful Vermilion is likely to Software be simplicity. Contact details Vermilion Software is a leading global provider of client reporting technology and services to the global provider of client reporting and asset management industry. 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By selecting VRS, asset and wealth management firms benefit from Sydney Office Vermilion Software PTE Ltd a fully automated client reporting process, whatever the business environment. The system However, the Asian wealth manage- Level 34, 50 Bridge Street is designed to easily integrate into existing and established business processes, from high- Keeping things simple can also help banks Many ofSydney these issues, however, are touch,ment low-volumeindustry still to low-touch, has some high-volume way to processes. Using VRS, firms can easily provide NSW 2000 ago, transparent, in his opinion, value-added to creating service for the their re -clientsto as tackle well as some keeping of their abreast biggest of regulatory problems no different in Asia than they are in Australia requirements and internal business demands. VRS– offersnamely the ensuring flexibility transparency. for asset managers to other parts of the world, including in quired convenience. T +61 (0) 2 8216 0950 choose how they want their reports to be presented to each client in terms of format, branding Switzerland. and the ability to drill through the charts to the underlying raw data. Boston Office These includeVermilion cost, Software regulation Inc and the A single solution for the automation of complex and high volume reporting 100 Franklin Street WINNER VRS is designed to fit into existing and established business processes and is underpinned by a ability toSuite do 302cross-border business ef- Back & Middle total process audit feature, satisfying corporate demands for compliance, marketing requirements ficientlyBoston and without (regulatory) inci- for branding“One and business of Avaloq’s requirements approaches for the delivery of is timely, the accurate creation and professional of reports. Office Provider dent, addsMA 02110Fernandez. Comprisingan innovation six key integrated servicesecosystem.... (Workflow Service;This enablesData Gateway innovation Service; Commentary USA of the Year Service; Report Generation Service; Distribution Service and Account Management Service) VRS T +1 617 279 0799 delivers a transparentfor banks and proven and method wealth of streamlining managers the entire as client well reporting as process. One of Avaloq’s approaches, for access to a global community for innovative ideas example,London is the Officecreation of an innova- Vermilion Reporting Portalfrom fintechs and developers.” tion ecosystem,Vermilion Software explains Ltd Fernandez, The Vermilion Reporting Portal (VRP) is a fully secure, highly scalable and customisable front-end 1 Carey Lane Our award-winning product, Vermilion both for technology as well as for fi- web portal. It is designed to be both business-user and customer facing as a natural extension of London Reporting Suite, is designed to deliver Vermilion Reporting Suite (VRS), delivering reports and data direct to your clients. nancialEC2V products. 8AE United Kingdom accurate, flexible and scalable client V:Pitch – Empowered Presentations “This enablesT +44 (0) innovation 20 7234 3080 for banks and reporting and communications. V:Pitch is powerful new functionality within the Vermilion Reporting Suite, enabling authorised wealth managers as well as access to a users to create and maintain PowerPoint presentations using approved content. V:Pitch will be invaluable to marketing and sales departments that have master slide decks and need a central global community for innovative ideas The success of our product is deeply repository for all presentations, while“Asian ensuring allmarkets content is approved. are learning from from fintechs and developers.” embedded in our key differentiator: more established countries. exceptional domain knowledge and VRS is available as a hosted service, or an in-house installation Going forward, those start-ups which Additional services that enable our clientsWe solve can current transport and future problems 500 years include: of will be successful, according to Mo- deep understanding of the asset knowledge and experience in gicato, will be those that have a few management arena. Hosting service Swiss banking to Asia.” If required, we offer a secure and cost-effective hosting service with cloud infrastructure, key characteristics. accessible by your browser from any location. With full security, failover and backup measures London in place to ensure peace of mind for our clients, our hosting service is ISAE3402, ISO90001 These include: a good team with expe- Vermilion Reporting Suite and ISO27001 accredited. Independent penetration tests are regularly scheduled to ensure our rienced people; a reasonably solid idea platforms remain secure. MICHAEL STEMMLE Boston Transforming traditional client reporting additiv (not necessarily the most innovative Singapore into a tangible return on investment Translation service one); effective execution; and a business Automated translations can be achieved through VRS or through partnership with a market plan worth taking to market. leading corporate translation specialist, who offers report translation into any language. This semi- Sydney www.vermilionsoftware.com automated service integrates with the VRS Workflow Service to ensure that translations are fully signed-off and delivered on time.
30 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3
Hubbis-Quarterly-Jan16-A3-Ad.indd 1 20/01/2016 12:30 Empowering client service professionals Vermilion Software is the leading About Vermilion Software Contact details Vermilion Software is a leading global provider of client reporting technology and services to the global provider of client reporting and asset management industry. Singapore Office The Vermilion solution, Vermilion Reporting Suite, is designed to deliver accurate, flexible, and Vermilion Software PTE Ltd communications software and services scalable client reporting and communications, empowering client service professionals to deliver 8 Marina View to the asset management industry. multi-lingual, graphical, marketing-quality reports that are created through an automated process. Asia Square Tower 1, Level 07-04 Clients include Nikko Asset Management, one of Japan’s largest asset managers. Singapore 018960 Singapore T +65 6407 1060 About Vermilion Reporting Suite (VRS) VRS is a one-stop browser based solution designed to address all critical business issues within the client reporting cycle. By selecting VRS, asset and wealth management firms benefit from Sydney Office Vermilion Software PTE Ltd a fully automated client reporting process, whatever the business environment. The system Level 34, 50 Bridge Street is designed to easily integrate into existing and established business processes, from high- Sydney touch, low-volume to low-touch, high-volume processes. Using VRS, firms can easily provide NSW 2000 a transparent, value-added service for their clients as well as keeping abreast of regulatory Australia requirements and internal business demands. VRS offers the flexibility for asset managers to T +61 (0) 2 8216 0950 choose how they want their reports to be presented to each client in terms of format, branding and the ability to drill through the charts to the underlying raw data. Boston Office Vermilion Software Inc A single solution for the automation of complex and high volume reporting 100 Franklin Street WINNER VRS is designed to fit into existing and established business processes and is underpinned by a Suite 302 Back & Middle total process audit feature, satisfying corporate demands for compliance, marketing requirements Boston for branding and business requirements for the delivery of timely, accurate and professional reports. MA 02110 Office Provider Comprising six key integrated services (Workflow Service; Data Gateway Service; Commentary USA of the Year Service; Report Generation Service; Distribution Service and Account Management Service) VRS T +1 617 279 0799 delivers a transparent and proven method of streamlining the entire client reporting process. London Office Vermilion Reporting Portal Vermilion Software Ltd The Vermilion Reporting Portal (VRP) is a fully secure, highly scalable and customisable front-end 1 Carey Lane Our award-winning product, Vermilion web portal. It is designed to be both business-user and customer facing as a natural extension of London Reporting Suite, is designed to deliver Vermilion Reporting Suite (VRS), delivering reports and data direct to your clients. EC2V 8AE United Kingdom accurate, flexible and scalable client V:Pitch – Empowered Presentations T +44 (0) 20 7234 3080 reporting and communications. V:Pitch is powerful new functionality within the Vermilion Reporting Suite, enabling authorised users to create and maintain PowerPoint presentations using approved content. V:Pitch will be invaluable to marketing and sales departments that have master slide decks and need a central The success of our product is deeply repository for all presentations, while ensuring all content is approved. embedded in our key differentiator:
VRS is available as a hosted service, or an in-house installation exceptional domain knowledge and Additional services that enable our clients solve current and future problems include: deep understanding of the asset
Hosting service management arena. If required, we offer a secure and cost-effective hosting service with cloud infrastructure, accessible by your browser from any location. With full security, failover and backup measures London in place to ensure peace of mind for our clients, our hosting service is ISAE3402, ISO90001 Vermilion Reporting Suite and ISO27001 accredited. Independent penetration tests are regularly scheduled to ensure our platforms remain secure. Boston Transforming traditional client reporting Singapore into a tangible return on investment Translation service Automated translations can be achieved through VRS or through partnership with a market leading corporate translation specialist, who offers report translation into any language. This semi- Sydney www.vermilionsoftware.com automated service integrates with the VRS Workflow Service to ensure that translations are fully signed-off and delivered on time.
Hubbis-Quarterly-Jan16-A3-Ad.indd 1 20/01/2016 12:30 PROFILE
A strategic approach to application development in banking
Software is becoming increasingly critical to most wealth management organisations, so adjusting strategies accordingly is a top priority, says Appway’s Hanspeter Wolf.
In its effort to address the growing with multiple third-party software and problem of outdated banking process- services. For instance, says Wolf, es in the era of demanding, technically- Appway Onboarding integrates digital savvy customers, Appway has built a signature capabilities of partners such solution for universal banks, private as eSignLive and DocuSign, providing banks, and wealth managers. “Our goal clients with a digital alternative to has been to become the global leader manual signatures. in a specific part of the market and we are really happy we achieved that for The solution automates tasks related client onboarding in wealth manage- to client accounts, making processes ment,” says Hanspeter Wolf, chief ex- efficient, accurate and traceable. It also ecutive officer of the Switzerland-based provides stakeholders with the tools software firm. they need to guarantee full compliance.
Appway Onboarding allows firms to The solution’s main objective is to manage the entire client lifecycle, in- empower businesses to adapt to a cluding data discovery, profiling, advi- changing world as they continue to HANSPETER WOLF sory, account opening, sending out attract new customers and sustain Appway welcome packages and account activa- company growth. “However,” adds Wolf, tion. It also covers the activities of all “to continue growing their businesses, stakeholders involved, including cus- wealth managers will need to offer tomers, employees and partners. clients a complete digital onboarding experience and full mobile support.” experience for both iOS and Android APPWAY IN ACTION systems, enabling a smooth onboarding The firm follows an open-system ar- In line with this, he explains that Appway experience across devices, channels and chitecture approach and integrates provides clients with a seamless native interaction modes. “In this way, Appway
32 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 merges the traditional physical world about what Appway is currently working ees is essential. And today, having a with today’s digital world,” adds Wolf. on. “It also lets us know what people good experience requires the digitalisa- are doing and what they are thinking,” tion of operations. DRIVING CHANGE explains Wolf. “It’s what we call ‘sharing He believes that Appway is the right by default’.” He believes that organisations are choice for companies seeking to in- searching for the tools they need to crease revenue and build loyalty by OPPORTUNITY manage continuous change. But a providing seamless digital and physi- In 2015, Appway’s bookings showed one-step transformation is hardly cal experiences for both customers an 81% increase, which corresponded feasible, and for companies looking and employees. with the global expansion of its client to make sweeping changes, the chal- base and network. This included the lenges are numerous. For example, institutions can enhance opening of new offices in Toronto, the user experience by giving custom- London and Geneva. For Wolf, meanwhile, the company has ers and employees access to Appway- more to offer than just technology. based applications anytime, anywhere. Asia now comprises around one-fifth “Digitalisation is about strategy and of the company’s overall business, with change. A large part of digital thinking “Work automation supports better in- further growth expected in Hong Kong is about change management. Many teractions between customers and and Singapore. people forget that,” he explains. employees across the work spectrum,” says Wolf, “which frees up time for em- Wolf suggests that Hong Kong, in par- “People who have worked with a ployees to engage in the most important ticular, can help Chinese banks take company for 30 years will have to adjust business activity: serving customers.” their first step into international waters. their outlook,” he adds. “So real change will only be possible when the right Meanwhile, Appway’s support for agile For example, in November 2015, Huatai incentive structures are in place.” methodologies enables the rapid de- Financial Holdings, a subsidiary of velopment of new releases and im- Huatai Securities, one of China’s largest One way to support a culture of change, provements. Companies can release brokerage firms in Hong Kong, imple- Wolf suggests, is to avoid large releas- applications according to their needs mented Appway Onboarding. The solu- es or a single, company-wide transfor- while continuing to deliver smooth, tion has been pivotal in supporting the mation. Instead, continuous, incremen- uninterrupted digital experiences. firm’s international growth. tal adjustments is the best path toward successful digitalisation. In addition to its technology, Wolf Appway’s expertise and experience says that Appway places a lot of value working with large international banks “We guide our customers to adopt a on community building by working has made it a likely choice for firms with digital mind-set, which has helped them with an extensive network of partners global outlooks like Huatai, says Wolf. establish track records of ongoing and and developers. effective change,” he says. “We chose Appway over competitors “We have a website that provides tu- for the company’s ability to understand Wolf adds that these practices apply to torials and instructions to all those our goals and requirements quickly,” banks both small and large. involved in developing business ap- said Lucy Sun, chief operating officer of plications, from business analysts and Huatai Hong Kong at the time of the “We may serve some of the largest applications architects, to software implementation. banks out there, but what we offer developers,” he adds. works for local and regional banks as CHALLENGES REMAIN, BUT well. Client onboarding has proven to This website – developer.appway.com PROSPECTS LOOK GOOD be a great first step on the journey – is open to the public, giving people According to Wolf, building the right toward becoming a digital bank. That’s around the world access to information experience for customers and employ- the beauty of our business.”
ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 33 FEATURE ARTICLES
The internationalisation of Chinese wealth
Chinese HNW and UHNW clients are looking for new options, especially cross-border solutions, to diversify, protect and grow their wealth in today’s complex world. A new White Paper by Hubbis and Jersey Finance identifies the way forward.
They are increasingly aware of the inheritance, which surged from the fifth various challenges they face in relation priority in 2013 to the second last year, Research scope and to business succession planning and the particularly among the UHNW. context transfer of their personal wealth to the next generation. The report also identified the new The objectives of this research meaning of ‘wealth inheritance’ as part were to highlight key trends and topics linked to the demand This has brought with it a growing of the Mainland market’s evolution. for advice and solutions, amid demand in terms of diversification of Increasingly, China’s wealthy value a the flow of assets and people product, channel and destination. legacy of both material as well as spiri- from the Mainland, and to help provide answers to questions such as:
What are drivers and also risks for Chinese HNW and “There appear to be two primary needs for China’s HNW UHNW clients in trying to and UHNW populations... to diversify and protect their diversify, protect and grow their wealth? wealth... and to have proper succession planning.” What is the impact of transparency and tax initiatives on appetite for solutions and advice among Chinese clients? How will assets transfer Indeed, the 2015 version of the China tual wealth; they expect good virtues across generations? Merchants Bank-Bain & Company China and capabilities, such as education, hard What advice do Chinese Private Wealth Report identified wealth work and business philosophy, as part families need in today’s complex world? preservation as the top wealth manage- of their legacy. These trends present ment objective, followed by wealth significant opportunities for wealth
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Chinese HNW and UHNW clients are looking for new wealth management options, especially cross-border
SUCCESSION PLANNING FOR FAMILY BUSINESSES AND INSURANCE/ PERSONAL WEALTH ESTATE PLANNING/ PROTECTION IS THE MAIN FOCUS LEGACY PLANNING 43%
managers and professional services The challenges in meeting these require- account for roughly 80%, based on firms targeting this growing segment. ments, however, are highlighted by the survey respondents. general lack of diversification of assets, This was the backdrop for proprietary along with a limited knowledge of man- A GROWING ROLE FOR SERVICE research conducted by Hubbis and aging risks and available solutions. PROVIDERS Jersey Finance in September 2016, via As the China market continues to open an online survey, one-on-one interviews Further, specific issues that some of and the wealthy become more sophis- and a roundtable discussion. these individuals might face include: ticated, HNW and UHNW clients are the depreciation of the RMB against increasingly looking to diversify their MEETING CLIENT NEEDS the US dollar; investment in unfamiliar holdings outside of the Mainland. There appear to be two primary needs markets (overseas real estate and finan- for China’s HNW and UHNW popula- cial products); and understanding the These individuals also see overseas tions. The first is to diversify and protect implications of inheritance taxes in investments as a way to achieve more their wealth in an increasingly-complex mature markets. diversified (and potentially higher) world; the second is to have proper returns through access to a broader succession planning for family busi- Of increasing concern and uncertainty selection of products and services than nesses and personal wealth. to many of these individuals are the ex- is available domestically, due to recent pected developments in relation to estate stock market performance in China. Indeed, according to our survey of and inheritance taxes, along with the 45-plus industry practitioners across global drive towards tax transparency. In line with this, wealthy individuals and Hong Kong and Singapore who service families are turning to wealth manage- these individuals, business succession Perhaps most notably, however, the ment specialists, both foreign and planning is their main focus today (43%). two most significant hurdles which are onshore, to help them achieve their holding Chinese clients back when it objectives. It is therefore becoming This is followed by a mix of insurance comes to wealth transition are: where necessary for these individuals to access / protection, estate planning, and to even start the discussion; and what a full suite of wealth management ser- legacy planning – which are roughly is seen as a lack of good advice or vices – including estate and wealth equally weighted. options. Combined, these difficulties planning, and real estate.
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While China’s HNW and UHNW prefer Another issue for these clients to contend to take a predominantly active role in with is family business succession. For Educated and prepared their own investments and looking instance, practitioners see a growing after their assets, there are signs that number of situations where children, There are various ways that more of them are entrusting a larger especially if they have been abroad to the wealth management share to professionals. study, are not keen to take on respon- industry can help further develop and support the trend sibilities of family businesses. of the internationalising of ¥ Perhaps most exciting for wealth manag- Lower cost Chinese wealth. ers and other advisers over the long-term, In some cases, family governance can meanwhile, is the fact that the recent help. Anecdotally, according to several For many UHNW clients from ¥ Operational efficiency volatile environment has heightened professional services advisers during China, for instance, they need awareness and demand among HNW the research process, they say that the to be educated on how wealth should be managed overseas, and UHNW Chinese for financial plan- creation of family charters and setting ¥ Low complexity properly and professionally, ning and wealth structuring expertise. up family councils has been well-re- with optimal results. ceived by Chinese clients.Philanthropy ¥ Market penetration At the same time, wealth managers need is also a concept which is gaining some More specifically when it to be aware of what matters to these traction among families, although do- comes to estate and succession clients in terms of what they are looking mestic laws are not well developed yet planning, pre-empting any ¥ issues is crucial when advising Increased revenue for from their fiduciary providers. in this respect. Chinese clients. ¥ According to respondents to the online When it comes to trusts, most of the Survey respondents pinpointed Minimised risk survey, the three most important ele- planning done to date has been based the use of ‘wrong or unnecessary ments (roughly equally weighted) are: on foreign models where overseas- structures’ as the most likely offering tailored approaches; delivering based trusts own overseas assets. Do- aspect of the process to create problems for clients (45%). a high degree of personalisation; and mestic PRC trusts are not being used creating confidence for the clients that in any material way for such planning This is closely followed by a mix they feel in safe hands. yet and clients still face difficulties of ‘wrong advice about what transferring onshore assets into over- clients need’ (24%) and ‘family MORE STRUCTURING NEEDED seas-based trusts. disputes’ (24%). Ultimately, there are various drivers Such friction is inevitable, so behind Chinese clients increasingly Asset planning, family succession and more time and attention needs looking to engage wealth structuring the diversification of wealth are often to be spent than many clients options and solutions, often linked to the key drivers for much of the cross- think on how they pass on their their various concerns about how to border structuring out of China. wealth without destroying the protect their wealth and legacy amid family unit. the existing framework. A smaller proportion of it, some prac- Further, and more broadly, titioners say around 25%, is done for 50% 1/3 99.9% many clients from China are not time reduction reduction in straight through But while most wealthy individuals in tax purposes. fully aware of the implications to make a proposal operating expenses processing China understand the use of a will, the of FATCA and the Common (BCV) (Schroders) (Swissquote) understanding and utilisation of other As more Chinese wealth moves across Reporting Standard (CRS). planning ideas such as pre-nuptial borders in search of protection and agreements, trusts and foundations are other wealth solutions, (subject to cur- Yet at the same time, advisers, too, need to be cautious about still in a relatively developmental stage. rency controls) growth in the overseas- exposing themselves to This might be explained by the fact, based trust market is expected, at least offences or charges under according to the survey’s respondents, in the near term. This is pending the relevant CRS or other regimes that the biggest misconception Chinese anticipated amendment of the indi- by taking too proactive a role in families have with wealth structuring is vidual income tax laws and possible structuring advice. temenos.com @Temenos +Temenos Temenos a ‘loss of control’ (72%). introduction of gift/inheritance tax.
38 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 temenos.com ¥ Lower cost ¥ Operational efficiency ¥ Low complexity ¥ Market penetration ¥ Increased revenue ¥ Minimised risk
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A growing need for an even playing field
As the global wealth management industry continues to undergo sweeping changes in terms of both regulation and client behaviour, standards need to be consistent and conducive to doing the right type of business, says Globaleye’s Tim Searle.
Many international advisory firms in This is particularly true in Asia and the the financial planning space face a Middle East, where Globaleye is head- growth dilemma: they want to be quartered, and Searle has worked for present and operate in as many markets the last 18 years. as possible to service their clients, yet this subjects them to a host of different In this region, the firm is only allowed regulatory environments. to provide clients with a limited range of products, inhibiting its preferred, The upshot, explains Tim Searle, chair- best-of-breed approach. man and chief executive officer of -Glo baleye, is that firms like his, which has The same even applies in Singapore, he 350-plus people spread across 10 adds, although to a lesser extent. offices in Europe, the Middle East and Asia, can be held back in what they can Yet if a client who lives in Singapore offer clients. wants to buy a certain product, but this isn’t licensed there, they can still ap- And in turn, those individuals might look proach a firm in another market. “We TIM SEARLE at markets elsewhere. are now looking at reverse client acqui- Globaleye sition,” says Searle. “Compared with the US, the UK or Aus- tralia, where the IFA industry has flour- While such individual regulatory stan- ished, we have to operate in multiple dards ensure that investors in a par- jurisdictions with many regulators,” he ticular jurisdiction only get sold invest- means their needs are much more global explains. “The local regulator [in each ments which have been authorised by today. And nobody wants to even test market] should take note of changes the local authorities, the cross-border the boundaries, given the consequenc- happening around the world.” nature of clients’ portfolios and assets es which now exist.
40 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 Hubbis_A4_July16_WIP.ai 1 28/7/2016 11:21:01 AM
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Source: Citywire, Morningstar, Lipper, Asia Asset Management. Morningstar Awards 2016 © Morningstar, Inc, All Rights Reserved. Thomson Reuters Lipper Awards © 2016 Thomson Reuters. All Rights Reserved. This publication is for information only. All applications must be made on the application form accompanying the prospectus, which can be obtained from Fullerton Fund Management Company Ltd (“Fullerton”) [UEN: 200312672W] or its approved distributors. Investors should read the prospectus for details before investing. The value of units or shares in the Fund and the income accruing to the units or shares, if any may fall or rise. Past performance is not necessarily indicative of future performance. This publication was, prepared without regard to the specific investment objectives, financial situation or needs of any investor. Investors may wish to seek advice from a financial adviser before making a commitment to invest in any Fund. In the event that investors choose not to seek advice from a financial adviser, investors should consider whether the Fund is suitable for them. EXPERT INSIGHTS
ADAPTING TO CHANGE Further, every portfolio is consistently To date, Globaleye’s business model has reviewed to guarantee each investment Driving global been based on classic financial planning remains within the clients’ risk param- diversity solutions. But the firm has realised the eters and is adapted to global eco- need to evolve in line with clients’ needs nomic situations as they occur. In Searle’s view, the mis-match and the wider investment and regula- he sees between what clients need and want, and what firms tory climates. Typically, offshore financial planning like Globaleye are allowed to firms charge entrance costs and exit deliver, is a challenge for such In line with this, in August 2016 it fees to clients who wish to buy a new global players. launched a new platform, AEON, in fund or sell a fund within the first five partnership with investment manage- years of purchase. On the other hand, however, ment firm Quilter Cheviot, part of UK its reach provides certain advantages over many FTSE 100 company Old Mutual, and By contrast, he says that AEON has competitors. also with Fidelity International. pricing structures to guarantee the cli- ent’s assets remain liquid. This is especially the case when In what Globaleye believes is a first- it comes to being able to access of-its-kind partnership, AEON aims “There is often a disconnect between a greater number of clients to support the development of regu- what [most] fund management firms around the world. lation and compliance in offshore fi- offer and what clients want and can This enables the firm to target nancial services by leveraging the tolerate,” he adds. clientele who understand experience and expertise of the two the importance of financial investment managers. The emphasis has also been on ensur- planning, regardless of where ing a low total expense ratio, which they come from. In short, the aim is to offer discretionary Searle says is important given the chal- “The needs of someone from fund management to offshore investors, lenge in getting alpha if inherent charges Egypt compared with a guy currently available to Globaleye clients on funds are high in an environment of from Singapore are similar,” across its offices in the Middle East, low interest rates. says Searle. Asia and Europe. ENHANCED SERVICE “They have both got aspirations “We have created this new proposition AEON is a clear sign of Globaleye’s phi- to retire one day, and ensure their family and business are as we recognise the need to provide losophy to give its clients comfort, protected. So they want us to dynamic asset management in line with control and flexibility. deliver solutions to meet these clients’ risk profiles, and by using profes- needs,” he adds. sionals as part of an enhanced service,” Going further, to offer access to view explains Searle. the performance of their investments, However, since the penetration the firm has also designed and launched of insurance in all markets continues to be relatively low, It also stems from the fact that clients Globaleye Valuation Service (GVS), which greater involvement from increasingly realise it is unrealistic for is a free tool. regulators would be a them to rely on – or expect – a financial welcome development. adviser to manage their money in the This enables the firm’s clients to be able way they need, given the complexities to build up a complete picture of all “[We want them] to raise of the markets. their assets and liabilities – not just fi- the importance of financial planning and make people nancial investments. confident to go to a provider To play its part in this way, the platform who delivers a solution they gives clients access to instruments like In turn, it also enables the respective want,” he adds. ETFs, single stocks, funds and trackers financial adviser to monitor and adjust at an institutional rate. the assets, if the client wishes.
42 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 IntegratingIntegrating your your businessbusiness objective objective withwith ours ours
We believe that your business success is our success. We WeWe believe believe that that your your business business success success is ouris our success. success. We We work with you through every phase of your business and workwork with with you you through through every every phase phase of ofyour your business business and and care for your results as a trusted partner and adviser as carecare for for your your results results as asa trusteda trusted partner partner and and adviser adviser as as though we are a part of your business. thoughthough we we are are a parta part of ofyour your business. business. • International & Domestic Tax • • International International & Domestic& Domestic Tax Tax • Trusts & Foundations • • Trusts Trusts & Foundations& Foundations • Family Office Structuring and Support Services • • Family Family Office Office Structuring Structuring and and Support Support Services Services • Regulatory & Compliance • • Regulatory Regulatory & Compliance& Compliance • Immigration & HR • • Immigration Immigration & HR& HR • Company Formation & Administration • • Company Company Formation Formation & Administration& Administration • Accounting & Financial Reporting • • Accounting Accounting & Financial& Financial Reporting Reporting
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New wealth management dawn beckons for Indonesia
Our 5th annual event for the wealth management community in Indonesia came at a time of much excitement in the local market, especially in the wake of the new tax amnesty programme and lower bank deposit rates.
While it is difficult to predict what the digital and social channels – can be real impact will be on Indonesia of tax increasingly harnessed, along with Thank you to our sponsors reforms and greater investment incen- product innovation and education of tives, consensus based on this and other both clients and advisers alike, hope- Zurich Topas Life regulatory initiatives is that this should fully helping to drive more awareness, ERI Henley & Partners be a good thing for the further develop- growth and engagement. SingPost ment of the wealth and asset manage- Sun Life Financial ment industries locally. This all presents a tangible opportunity Vermilion to build a longer-lasting wealth manage- BlackRock Practitioners predict that many Indo- ment business. In line with this, it should BVI House Asia nesians will increasingly bring money be more realistic that local banks can Global Precious Metals Mercer back onshore – assuming the govern- start to close the gap that has existed Morningstar ment lays more foundations for the to date in terms of the quality of advis- Rosemont future. There even seems to be evi- ers, connectivity, processes and access Swiss Life dence of some private bankers wanting to investments that are commonplace Iyer Practice Advisers to relocate to Jakarta in preparation for within universal banks. Thomson Reuters the expected growth. But a combination of economic growth, This should, therefore, be the catalyst demographics and future financial to now kick-start the country’s wealth needs is expected to result in growth management sector. At the same time, in the number of people who will invest tively small 370,000 or so currently. Yet technology – especially via mobile, in mutual funds – to surpass the rela- while some of the opportunities are exciting for all participants, there is a hesitation to more broadly say that things are at a ‘tipping point’ just yet – mainly due to the lingering limitation from regulatory restrictions, talent, professional standards and relatively traditional business models.
The need of the hour is for the regula- tor to work more closely with the in- dustry to shore up the fundamentals and increase capacity.
44 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 Hong Kong
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Vineet K Vohra Vivien Kusumowardhani Widrawan Hindrawan Yuki Diwinoto Yifei Li Arete Financial Partners CIMB Sun Life DBS Bank Tax Planner BlackRock
Tri Djoko Santoso Yuliana Djap Peter Huber Dominic Volek Lee Shyh-jih FPSB Indonesia BII Maybank Zurich Topas Life Indonesia Henley & Partners ERI Bancaire
“As the wealth management industry in Indonesia is still relatively new, this forum provides a good opportunity for us to learn, especially from practitioners from other countries.”
Herdin Syafari Vivian Secakusuma Tri Djoko Santoso, Chairman, FPSB Indonesia Rawlinson & Hunter (Singapore) BNP Paribas Investment Partners
48 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3
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Customer-centricity at heart of a winning Indonesia strategy
Wealth management in Indonesia could be at a tipping point. From a relatively low base, government initiatives plus digital solutions look set to create the catalyst for more diversified portfolios and a better customer experience, says Ivan Jaya of Commonwealth Bank.
Indonesia’s wealth management market Consequently, bankers have to be pre- is still at a nascent stage of develop- pared for the expected growth. ment; the fact that mutual funds have a market penetration of less than 1% is READY TO PROVIDE THE RIGHT evidence of this. SOLUTIONS In preparation for this, the key challenge But practitioners are optimistic about for the industry is creating and sustain- the potential in this large market with ing the resources required to offer a a growing middle class. professional and efficient service to end-clients. The opportunities in Indonesia are huge, driven by the key wealth drivers of con- To provide more sophisticated solutions, sistently positive GDP growth (cur- wealth managers should offer diversified rently 5.2% GDP growth compared with portfolios with strong investment instru- 4.9% in Q1, 2016). ments to absorb the expected excess liquidity expected by inflows. Further, the recent Tax Amnesty Pro- IVAN JAYA gramme is sending some positive signals In line with this, local banks should also Commonwealth Bank to the market. be able to close the gap with big players in terms of the quality of advisers and Ivan Jaya, executive vice president and relationship managers, as well as in head of wealth management and cus- terms of digital solutions, processes and tomer segments for Commonwealth diversification. “There is a change in the provide tailored solutions for them now Bank in Indonesia, believes the tax wealth management paradigm,” explains should be familiar with the client’s initiatives will see more HNW assets Jaya. “Relationship managers who ability to transact by themselves with head back onshore. usually focus on client needs and digital solutions.”
50 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3
Financial Data. Made Smarter. EXPERT INSIGHTS
GAME-CHANGER IN CLIENT He is optimistic on the ability of In- channel strategy by combining human EXPERIENCE donesia to take a digital path. Indeed, and technology advice. Worldwide, wealth management firms for him, digital possibilities are vast in are reshaping their strategy to focus on a country with 220 million mobile Robo-advisors could fill the financial client needs. subscriptions from a population of advice gap. Indeed, Indonesian banks 250 million. could take advantage of the fintech For Jaya, the recent changing market in phenomenon to build their credibility Advise with Conf idence Indonesia offers the opportunity to Moreover, the average age across the in the market, he explains. incorporate digital solutions and rein- population is relatively young, at around Intelligent Tools for a New Era of Wealth Management force the adviser-client relationship. 28 years old. Going forward, he says the most suc- cessful financial advisory firms will be In a recent study of 1000+ high net worth and ultra-high net those which combine the best of client- worth individuals, respondents indicated they want more centered technology and the benefits transparency, quality investment ideas, interaction and of the human touch in providing advice. accountability from their wealth managers. “Wealth managers should offer diversified portfolios with strong investment instruments to absorb the expected He also sees the local banking land- As the needs of high net worth individuals evolve, scape being reshaped by domestic excess liquidity expected by inflows.” wealth managers must invest in the right technology consolidation. to meet these evolving demands and stay relevant.
To meet clients’ expectations and in- crease market penetration, local Explore FactSet’s solutions and download our players have to reinforce and diversify recent research, developed with Scorpio Partnership. New clients in Asia are also relatively To meet client expectations, Common- their fund and insurance propositions. www.factset.com/smartwealthebook sophisticated and required more time wealth Bank has a unique feature that and attention. They are also comfortable other players don’t – the capability to To close the gap with the bigger with using mobile and internet channels allow customers to buy and sell mutual players, local banks also need to con- for their banking services. funds online through mobile banking. solidate the knowledge of their rela- tionship managers, so that they can The Association of Internet Service This capability provides an opportunity give the right advice to customers. Providers in Indonesia (APJII), for for customers to transact mutual funds example, said internet penetration in anywhere after getting advice from their And by using technology and diversi- Indonesia has now reached 40% of the relationship manager. fying the product offering, wealth population, or 100 million users.
Growing penetration is also supported by the government’s plan to develop an information highway with broadband “The most successful financial advisory firms will be those services for all 514 regency and mu- which combine the best of client-centered technology and nicipal capital cities across the country the benefits of the human touch in providing advice.” by 2019. Moreover, with experience banking in Singapore, HNW clients are more and more tech savvy.
As a result, wealth managers have to be focused on their clients in order to A BLENDED FUTURE BECKONS managers will be able to deliver advi- be able to translate and identify their According to Jaya, what’s needed now sory services about investments and needs. “We need to tailor our services in Indonesia’s wealth management provide tailored solutions to meet based on customer needs,” says Jaya. market, is implementation of an omni- customers’ needs.
52 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 Financial Data. Made Smarter.
Advise with Conf idence
Intelligent Tools for a New Era of Wealth Management
In a recent study of 1000+ high net worth and ultra-high net worth individuals, respondents indicated they want more transparency, quality investment ideas, interaction and accountability from their wealth managers.
As the needs of high net worth individuals evolve, wealth managers must invest in the right technology to meet these evolving demands and stay relevant.
Explore FactSet’s solutions and download our recent research, developed with Scorpio Partnership. www.factset.com/smartwealthebook EVENT HIGHLIGHTS - ASIAN WEALTH MANAGEMENT FORUM 2016 - ZURICH
Accessing and capitalising on the Asian wealth story
With unrelenting growth in wealth across Asia, our annual event in Zurich explored the real risks and challenges of investing in region as well as the issues and opportunities in terms of managing family wealth.
Many people based outside Asia often fee income is growing, especially in don’t understand the reality of the op- Hong Kong and Singapore, where there Thank you to our sponsors portunity that the region’s ever-growing is now a much higher willingness among numbers and overall amount of wealth clients to put more money into managed Amicorp Group represents. Being profitable has been a or discretionary solutions. Further, big Fullerton Fund Management Henley & Partners constant challenge for international brands still seem to count among Asia’s IMTF private banks in Asia. And with cost in- wealthy, so some of the well-known Rosemont come-ratios increasingly under pressure, Swiss names can leverage this. SSI Asset Management the complex regulatory landscape, and Trident Trust clients reluctant to invest in today’s un- Asia also offers European-based clients Vistra certain and low-yield environment, the much more hope in terms of generating Heritage Trust Group Alpadis pressure for many players is increasing. returns than they have closer to home. Iyer Practice Advisers Swiss Asia Despite these challenges and the trends Some of the factors for this include high Profidata in consolidation and down-sizing over GDP versus the rest of world and other the past two to three years, the allure EM regions, plus strong consumer of Asia continues to attract investment balance sheets and governments in from institutions trying to access exist- good financial shape to support reforms. Beyond their investment portfolios, ing and new HNW and UHNW clients. Generally, India and Indonesia are fa- there is also a lot of scope for helping voured countries, outside of China, due Asian clients address growing concerns For the international players which can to structural reform underway to the over confidentiality, transparency, se- get it right, the potential for recurring benefit of consumers. curity and asset protection.
The impact of automatic exchange of information (AEOI), the Common Re- porting Standard (CRS) and other regu- latory initiatives has led to more ques- tions than answers. Amid the hunt for new solutions so far, there has been a significant fall in demand for pure ‘off- shore companies’, replaced by a move to mid-shore and onshore companies; Singapore and Hong Kong have been beneficiaries of this trend.
54 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3
Alessandro Caironi Alex Borissov Alex Buerge Andrew Hendry Andri Manatschal Credit Suisse Finaport Lombard Odier Westoun Advisors PwC
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Christine Chen Cliff Go Francisco Fernandez Hans Diederen Harold Y. Kim, Ph.D. Saigon Securities Asset Management Swaen Capital Avaloq Heritage Trust Group Neo Risk Investment Advisors
Jacopo Zamboni Jasmina Zivkovic John Williamson Kripa Sethuraman Lukas Weber Henley & Partners Amicorp EFG International Bank Vontobel
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56 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 Trusted Globally Focused Locally
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“A great event and good to see bridges being built between Wealth Management professionals from Asia and Switzerland – where there is a lot to be learned for mutual benefit.” Bryan Henning, Head of Investment Services and Product Solutions,
Stephanie Jarrett Sunil Iyer Continental Europe and MENA, HSBC Private Bank Baker & McKenzie Iyer Practice Advisers
58 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 Aiming to be the best, not the biggest.
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J O Hambro Capital Management Limited (JOHCML) is an investment boutique authorised and regulated by the UK’s Financial Conduct Authority. JOHCM (Singapore) Pte Ltd is a wholly-owned subsidiary of JOHCML and regulated by the Monetary Authority of Singapore (MAS). EXPERT INSIGHTS
Uncovering hidden gems in the Middle East
As private clients from Gulf Cooperative Council strive to diversify their investments away from oil and local securities they will require more advice and expert portfolio management, says Vic Malik of Barclays.
The rise of a new generation of entre- the GCC to serve their financial and preneurs across the Middle East is investment needs. creating optimism that the various local economies can finally diversify. “There is a virtuous cycle where private wealth is being generated not solely by This is due to most of the rising stars investing in oil or commodities, but of industry being focused on using through providing services and products the region’s unique geographical lo- meant for consumption,” explains Vic cation as a trading hub between East Malik, head of investment advisory for and West. Barclays in the Middle East, Singapore
“Wealth is being generated not solely by investing in oil or commodities, but through providing services VIC MALIK and products meant for consumption.” Barclays
In turn, as these individuals mature and Asia. To benefit from this exciting THE DIFFERENCE WITH ADVICE in sophistication and get wealthier, phase and deliver something relevant, One of the stumbling blocks holding they are creating significant oppor- practitioners first need to understand the back broader demand across the tunities for wealth managers across motivations and needs of these clients. Middle East for wealth management
60 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 services has been the general mind-set Wealth managers, however, have had ingly finding takers in the region. The towards investing. to tweak their propositions to offer biggest selling point of these strate- clients greater flexibility and tailoring gies, explains Malik, is their ability to For example, says Malik, clients are not in Discretionary Portfolio Management. generate returns even in an environ- oriented towards alternative invest- ment where alpha generation is dif- ments; they tend to ask only for a simple Barclays’ discretionary portfolio propo- ficult to achieve. income-oriented portfolio or one that sition, for example, is tailored to its more may demonstrate a local bias. sophisticated clients, allowing them to Additionally these strategies are un meet their managers as much as they correlated to typical long only invest- It is crucial, therefore, for wealth man- want and even give specific direction ments. “In the current economy, where agers to put in more effort and planning on portfolio allocation at the outset. equity markets look expensive and there at the outset to prepare for the asset The idea, says Malik, is to engage clients are macro uncertainties with regards allocation discussions they should be in portfolio set up discussions such as growth, a smart manager with the right having with clients. allocations to specific asset classes. orientation can extract a lot of value in hedge funds and private equity,” he adds. Yet, while there is an obvious appeal to these strategies, finding an audience remains a challenge. “Allocation to fixed income mutual funds is higher than 10%, and closer to 20%.” According to Malik, a typical portfolio in this time zone has 10% to 15% assets sitting in cash, with most of the rest in- vested in ideas that generate income, whether through structured products or They could also even combine the “That’s important at the upper end of fixed income funds. “Allocation to fixed product offering with customised advice the segment, because it allows clients income mutual funds is higher than 10%, on the merits of broad-based global to relate emotionally to their portfolio and closer to 20%,” he says. “This is investing. “[Clients in the Middle East] in a much better way than when they simply because these funds have the have a lot of wealth to deploy, but there invest in a portfolio that is modeled and ability to put on take positions where is still an element of us needing to work implemented across multiple custom- investors otherwise would not because with them to articulate what certain ers,” he explains. of lack of familiarity.” investment strategies, other than simple income-paying ones, can do for them,” In short, a multi asset class model portfo- For Barclays, however, currency man- explains Malik. lio, despite its merits, may not appeal to agement and trading is emerging as these types of clients in the Middle East. an important area of priority. This can For example, beyond the common pri- Malik sees most clients sticking to a also be an effective way to build trust ority of capital preservation, new op- choice of assets and preferring to design with clients. “GCC is a classic multicur- portunities are emerging in needs-based their portfolio in a manner that helps rency environment. The local curren- investing. So instead of simply saving, them reach a specific goal. Fixed income cies are pegged to USD, several clients funds are directed towards achieving a portfolios, designed to earn a yield, can own or wish to own assets in GBP and specific goal – such as buying a prop- be used to fund a residential mortgage increasing number desire to acquire erty overseas. overseas or other things that matter EUR and SGD for personal or business to them. needs. The conversations about FX WARMING UP TO DISCRETIONARY allow the wealth manager to gain cred- On the portfolio side, while discretion- NEW IDEAS GAINING GROUND ibility with clients,” says Malik. “This ary investments are still to catch on in Although small in total AUM relative to way they may end up directing some any meaningful way, such ideas are fixed income funds, hedge funds and of their personal FX business via the gaining in popularity. private equity investments are increas- wealth manager.”
ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 61 PRACTICE MANAGEMENT - PORTFOLIO CONSTRUCTION
All that glitters is not gold
Investors and advisers should be more cautious about the value in buying gold during market downturns. By Todd James
I generally do not like gold as an invest- assets are losing between 30% and 50% will be making a lot of money…. It’s a ment, but investment strategists all in value. lot better to have a goose that keeps around the world suggest holding gold laying eggs than a goose that just sits within a portfolio as an insurance policy So while it may sound like a good strat- there and eats insurance and storage against hyper-inflation or social unrest. egy, practically it doesn’t add up. and a few things like that.”
The logic is that If the world collapses, Another argument for owning gold is Ultimately, the gold price is driven by at least owning gold will be one asset that it maintains its purchasing power investor sentiment. Buying gold is a that does well in bad times. over time, unlike cash, which loses it. speculation that someone else will someday pay more for it than you did. However, it turns out gold isn’t a very That is true to a degree – over a very good hedge against crises. long time (I mean hundreds of years) While I do not see gold as an inflation but on a time scale more relevant to or crisis hedge, I do feel it is a decent For example, in September 2008, when investors, such as 10 to 30 years, gold hedge against the US dollar (USD). Gold Lehman Brothers declared bankruptcy is actually a bad hedge against inflation. seems to be (at least more recently) the and the global financial crisis was in full Adjusting for inflation, gold is still 44% anti-USD; if you think the USD will swing, US stocks lost 17% while the below its peak in 1980. weaken, buy gold. gold price fell 16%. In September 2011, when Standard & Poor’s downgraded The fundamental problem with owning But again. I’m not too sure how useful the US government’s credit rating, US gold is that it isn’t a productive or this relationship is in practical terms. stocks fell 7% and gold dropped 11%. growing asset. If you buy an ounce today, 20 years from now you will still You cannot read or watch the financial The gold price at the end of October have just an ounce. news today without some investment 2008 was around 44% below where it guru calling for a sharp correction in is now. So if we use gold as a crisis or Gold does have some industrial uses, the financial markets. inflation scale, today is much worse but demand for these purposes is low than it was in 2008. compared with gold production. With uber-low interest rates and stag- nant growth, we are bound for a finan- WEIGHING THE INVESTMENT Warren Buffett put it best: “I have no cial crisis. If you did own gold as an insurance hedge, views as to where [gold] will be, but the how much would you need to hold? one thing I can tell you, is it won’t do Many of these same strategists suggest anything between now and then except investing in gold as a way to hedge Having 5% to 10% of your portfolio in look at you. Whereas Coca-Cola will be against such a crisis. but before you jump gold cannot do much if 90% of your making money, and I think Wells Fargo on the bandwagon, think twice.
62 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 All that glitters is not gold FEATURE ARTICLE
Creating a world-class client experience
Digitalisation to drive a superior client experience is the holy grail for private banks grappling with how to stay relevant and stand out in a highly-competitive market. But achieving this requires a clear roadmap for innovation, investment and information.
Speed, agility and customisation are So while every institution recognises the private bank on the basis of the extent critical components of a successful digital importance of digital and platforms to of a digital offering. platform in private banking – if institu- their business – and most are investing tions are to deliver on the new expecta- fairly heavily in these areas – there is Yet digitalisation itself is not that new; tions of existing and future clients. little consensus about the direction to instead, it is the interaction between the client, the bank and RM, where the client is integrated into the value chain. At the same time, embracing innovation also requires banks to undergo a cul- “What is consistent, however, is their understanding and tural and mind-set change. increasing commitment to innovation in the business.” These were some of the take-aways at a discussion co-hosted with FactSet in Singapore involving senior manage- ment, heads of technology and other Among their various preferences, take or what is the right model or ap- leaders in Asian private banking. wealthy individuals both young and old proach. What is consistent, however, is round the world want information de- their understanding and increasing com- EFFICIENT AND TANGIBLE livered in multiple ways, and in formats mitment to innovation in the business. Private banks have been working hard and which are accessible and relevant. to determine how best to create, posi- Plus, they have no doubt over the sig- tion and deliver a more digitised offer- Delivering on this is easier said than nificance of not keeping up. Evidence ing. And much of this is dedicated to done. Digital means different things to of this can be seen by recent research ensuring that their engagement with different people, both on the client side which says clients are even willing to clients is not just cost-efficient, but and for the banks themselves. switch their accounts to a different meaningful too.
64 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 Various industry research has shown COMPLEMENTARY NOT Complementing and enhancing this that the average relationship manager COMPETITIVE advisory element is a priority for many (RM) or client adviser in Singapore looks At the same time, private banks are institutions in terms of the way they are after about 60 clients at any one time. under no illusion about how far digital thinking about digital. This inevitably results in limited touch can transform the business. points. And with the tougher compli- Their overall aim is to make sure the ance burden, RMs have even less time The direction in which digital should be right advice is going to the right client or scope to talk with their clients and going, believe many practitioners, is not via the use of technology, rather than give them advice. to simply automate processes and an ‘all-singing, all-dancing’ platform that replace people altogether, but rather to caters in a uniform way to all client The banks are looking to digital, there- complement them. needs across multiple segments. Indus- fore, to enable them to give clients access to relevant information more DIGITALISATIONeasily, but with context that can offer IN PRIVATE BANKS a certain amount of guidance – and without this taking up as much of an “The direction in which digital should be going, is not to RM’s time asROADMAP before. simply FOR automate INNOVATION, processes and replace people altogether, but rather to complement them.” PushingINVESTMENT it directly from product special- AND INFORMATION ists to the client in terms of the invest- ment ideas also ensures an additional touch point from the institution’s point of view. Behavioural finance is one example. try players acknowledge that this is an WEALTHYThere INDIVIDUALS needs to be a way to incorporate BOTH YOUNGunrealistic ambition. For example, this can beAND done in OLD the this ROUND in terms of pre-emptingTHE WORLD and re- WANT form of alerts relating INFORMATIONto stock positions sponding DELIVERED to how clients are likely IN to MULTIPLE Instead, the priority should be – for each and market movements that are con- react to market movements, given their client segment that an institution wants nected to the investmentWAYS, content AND of riskIN profiles FORMATS coupled with ANDany past beWHICH- to service ARE – to determine which ele- their portfolio. ACCESSIBLEhaviours they might AND have RELEVANT.displayed. ments are better delivered digitally, and which of them make more sense to offer Further, if enough material is delivered In line with this, ranking products should via a face-to-face approach. to pique a client’s interest, it makes it become an important feature of a digital more likely that the follow-up conversa- platform, which would also help to give MAKING DIGITAL COUNT tion between the RM and client more guidance to clients – as well as Tempering some of the excitement becomes more tangible and might lead bankers – at the times when they need around developing a more comprehen- to more transactions. it most. sive digital offering, however, is the
COMPONENTS OF A SUCCESSFUL DIGITAL PLATFORM IN PRIVATE BANKING
SPEED AGILITY CUSTOMISATION MIND-SET CHANGE
ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 65 FEATURE ARTICLE
uncertainty over the results of efforts INFLUENCED BY FINTECH to date. Where there is also debate among Four emerging HNW private banks is the potential for robo- expectations wealth The assumption that banks will do more advisory and its ability to infiltrate the managers must meet business with each client still needs to client-RM relationship. be proven. Further, these institutions FactSet, together with Scorpio Partnership, surveyed over need to more closely identify and Although there is no doubt about the 1,000 HNWIs/UHNWIs across specify what they are trying to address value of such digital platforms at the Singapore, Switzerland, the in their digital journey. lower end of the wealth pyramid, for UK, and the US regarding the traditional HNW client (and above), their expectations of wealth Whether it is the client experience, trans- practitioners seem to want to wait-and- management and how they actional services, or advice, for example, see until robo-advisory services start envision their experience with their wealth manager evolving determines the type of tools, planning to replicate more of the role of an RM. over time. and timeframe needed. Again, a one- Yet there seems to be broad agreement size-fits-all approach isn’t practical. that once fintech is there and banks can The HNW community is increasingly focused on the effective flow of information from their advisers and receiving key insights on their terms. This means wealth “The assumption that banks will do more business with managers must prepare each client [due to digital] still needs to be proven.” to serve their clients more proactively and offer more frequent communications on their clients’ wealth.
Another trend captured by the survey is a shift The key, ultimately, is driving a win-win: see the results end-to-end, then every- in attitudes regarding from a client perspective, the demand one will join the bandwagon. regulators; 86% of HNWIs is to know what is going on without said regulator efforts having to rely on an immediate response On its side, it seems, is the fact that the should be directed toward from their RM, especially in a world fintech journey is an industry-wide, col- minimising risk for end clients by ensuring secure where speed of information and trans- laborative effort – which also includes technology at wealth parency is the norm. and has the support of the regulators. management firms. This has created a fast-moving – and Equally, RMs don’t want large numbers relatively inexpensive – landscape in Responsibility is a prized of clients contacting them with the terms of innovation and then integration brand attribute for wealth same or similar questions when this into business models. This is in stark managers. In the survey, investors primarily define information can quickly and conve- contrast to the typically slow approval responsibility as honesty niently be delivered to these clients, processes that are commonplace within about the firm’s business and in context. individual banks with many new systems. practices and investment processes. There is also a need for private banks Regardless of the extent of the influence to define what they will be doing with of fintech within private banking spe- Another clear takeaway is that HNWIs want their all the data that will be created as a cifically, those institutions which don’t advisers to embrace result of their more digitised business. adapt and change with the digital innovation as a means of To date, this has been a goal for institu- demands of customers today, and which distinguishing themselves tions that many have found hard to don’t embrace this journey, know that against the competition. make work in practice. they will be left behind.
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Our annual family wealth event in Singapore saw leading practitioners from across private banks, family offices and professional services firms discuss the fact that practitioners need a balance of soft skills and technical knowledge to be able to help clients navigate the many business and personal-related issues they face today.
Given that a significant proportion ness and personal assets via wealth of the wealth in Asia resides with structuring, business succession, Thank you to our sponsors family businesses, it is essential to legacy planning and inter-generation- understand what they and the next al wealth transfer. Amicorp Group generation need, and how to service Rosemont Swiss Life them effectively. And under the watchful eye of regula- Trident Trust tors around the world, the consequenc- Henley & Partners This requires advisers to know how to es of not doing this properly are ever- Heritage Trust Group approach conversations with UHNW more severe. Labuan IBFC families in Asia, to create the values, Prodigy Network vision and shared purpose for family These were some of the themes dis- SingPost Aberdeen Asset Management businesses – and also what is required cussed among a mix of senior manage- AsiaCiti Trust in educating them about transitioning ment and wealth planning / structur- Expersoft from one generation to the next. ing specialists working in private Mercer banks, multi-family offices and other Iyer Practice Advisers At the same time, with the ongoing independent firms on the one hand, drive towards tax transparency, helping and also relationship managers and UHNW families choose the right struc- client advisers. tures and jurisdictions is critical. TIPPING POINT compliance and personnel pressures, These clients need to assess – and Against the backdrop of various chal- private banks and wealth management find solutions for – their complex busi- lenges stemming from regulatory, tax, firms around the world face a uncer- tainty over the strategic positioning of their fiduciary services businesses within their broader wealth manage- ment offering.
It ultimately comes down to what’s core versus what isn’t.
As a result, many banks around the world are at tipping point in their deci- sion-making around whether to remain in the business of wealth structuring.
68 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 SEALED WITH TRUST
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ACT_AD_A4_MOTHER&DAUGHTER_SG_2015.indd 1 10/28/2015 2:32:18 PM Wai Soon Lum Annie Koh Carol Seah David Sussman Dawn Quek Goldman Sachs Singapore Management University WYNNES Financial Advisers EFG Wealth Solutions Baker & McKenzie
Dicky Fong Dr Daniel Brunner Eric Boes Hans Diederen Helene Li Amicorp Group TriLake Partners Amicorp Group Heritage Trust Group BNP Paribas Wealth Management
Jennifer Jern Joseph McBurney Lee Wong Lefan Gong Ted Low Infinity Partners Asiaciti Trust UBP Zhong Lun Law Firm GAO Capital
Patricia Thomas Peter Brigham Philipp Piaz Sean Coughlan Steve Hickman IRM Family Office Rosemont Finaport Trident Trust Swiss Life
Steve Knabl Steven Seow Sunil Iyer Tobias Tirtaatmadja Alexis Tan Swiss Asia Mercer Iyer Practice Advisers Amicorp Group Henley & Partners Singapore
70 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 SWISSLIFE_AD_210x297_FA.pdf 1 22/7/14 5:36 PM
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K Woon Shiu Lee Yai Sukonthabhund Peter Golovsky Hrishikesh Unni Kevin Lee Bank of Singapore Crossbridge Capital Asia Amicorp Group Taurus Family Office Zhong Lun Law Firm
Ntoudi Mouyelo Amicorp Group
72 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 Solid and stable in a changing world
In this ever-changing market, Hansard International Limited prevails as a steady and constant presence. For more than 25 years we have provided Financial products and services for international clients, coupled with exceptional levels of service, supported with online technology that enables you to manage your clients efficiently and effectively. Follow Us TM Hansard International Limited Find out more about Hansard’s credentials at Harbour Court, Lord Street, Box 192, Douglas, Isle of Man, IM99 1QL, British Isles www.hansard.com Registered Number: 032648C Regulated by the Isle of Man Financial Services Authority Telephone: +44 1624 688163 Hansard Global plc is listed on the Email: [email protected] London Stock Exchange EXPERT INSIGHTS
Catering to Chinese investment appetite
Ashley Dale of Harvest Global Investments discusses some of the trends in terms of investment habits and demands from mainland Chinese investors, and how to deliver products to meet it.
As the Chinese economy continues to estate and developed market equities, evolve at a fast pace, understanding the for example. rate of change is key to servicing invest- ment and buying appetite. DEALING WITH VOLATILITY With the mainland’s financial markets For example, wealthy consumers are no being volatile for the last 12 months or longer just spending their money by so, most allocators have gone under- going to Hong Kong to buy luxury weight China. goods. They are now travelling around the world and are consuming a wider But this doesn’t impact the Harvest variety of products and services. strategy. “In many ways, this shows where and how we can make a differ- More specifically in terms of investing, ence,” says Dale. “We have 200 invest- there is greater sophistication among ment professionals on the ground, so these individuals when it comes to we see the trends early, as well as the buying product – beyond just a simple sectors and areas of differentiation.” Chinese equity or fixed income fund, ASHLEY DALE Harvest Global Investments explains Ashley Dale, chief business From a product perspective, the firm development officer and chief marketing can beat the broad market indices on a officer for Harvest Global Investments. relatively consistent basis, he adds. Harvest is also taking advantage of the And with money held offshore, Chinese various government initiatives between investors are increasingly looking to Hong Kong and mainland China. more tailored offerings. ESG is appeal- diversify their risk, as well as seek the ing to Chinese investors, for instance, kinds of returns they used to get in the Further, in addition to traditional given the spotlight on the environment, past, he adds. This includes via real product, the firm is looking to develop says Dale.
74 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 2017 Events schedule
Event Date City
Compliance in Asian Wealth Management Forum Thursday 19th January Singapore Middle East Wealth Management Forum Tuesday 24th January Dubai Asian Wealth Management Forum Tuesday 21st February Hong Kong Independent Wealth Management Forum Thursday 9th March Singapore Indian Family Wealth Forum Wednesday 26th April Mumbai Asian Wealth Management Forum Thursday 11th May Singapore Thailand Wealth Management Forum Thursday 18th May Bangkok Philippines Wealth Management Forum Thursday 25th May Manila Investment Solutions Forum Thursday 8th June Singapore Digital Wealth - Asia Thursday 15th June Singapore Malaysian Wealth Management Forum Thursday 13th July Kuala Lumpur Indian Wealth Management Forum Thursday 24th August Mumbai Investment Solutions Forum Thursday 31st August Hong Kong Vietnam Wealth Management Forum Thursday 7th September Ho Chi Minh Indonesian Wealth Management Forum Thursday 19th October Jakarta Asian Wealth Management Forum Tuesday 24th October Zurich Asian Family Wealth Forum Thursday 2nd November Singapore Digital Wealth - Asia Thursday 9th November Hong Kong Taiwan Wealth Management Forum Tuesday 21st November Taipei China Wealth Management Forum Thursday 23rd November Shanghai DIRECTORY
People and firms who supported this publication
We appreciate the participation and contribution of key individuals and organisations across the wealth management community to the content in this publication.
PEOPLE QUOTED Agus B Yanuar, Samuel Asset Management Helene Li, BNP Paribas Wealth Management Ajay Mathur, ANZ Herdin Syafari, Rawlinson & Hunter (Singapore) Alessandro Caironi, Credit Suisse Hrishikesh Unni, Taurus Family Office Alex Borissov, Finaport Ivan Jaya, Commonwealth Bank Alex Buerge, Lombard Odier Jacopo Zamboni, Henley & Partners Alexis Tan, Henley & Partners Singapore Jake Wallis, Imperium Capital Indonesia
Andrew Hendry, Westoun Advisors Jasmina Zivkovic, Amicorp Andri Manatschal, PwC Jennifer Jern, Infinity Partners Annie Koh, Singapore Management University John Williamson, EFG International Anthonia Hui, AL Wealth Partners Joseph McBurney, Asiaciti Trust Anthony Siau, Kairos Capital Partners Ka Jit, Bank OCBC NISP Antony Dirga, Trimegah Asset Management Kenny Ho, Heritage Amanah International Ashley Dale, Harvest Global Investments Ketan Samani, UBS Wealth Management Bambang Simon Simarno, Standard Chartered Bank Kevin Lee, Zhong Lun Law Firm Benedict Yap, Fullerton Fund Management Kripa Sethuraman Bill Johnston, Chubb Life Kylie Luo, BDO Tax Advisory Bruno Patusi, EY Lee Shyh-jih, ERI Bancaire Bryan Henning, HSBC Private Bank Lee Wong, UBP Carol Seah, WYNNES Financial Advisers Lefan Gong, Zhong Lun Law Firm Chris Burton, Vistra Legowo Kusumonegoro, Manulife Asset Management Christine Chen, Saigon Securities Asset Management Lilis Setiadi, Batavia Prosperindo Aset Manajemen Cliff Go, Swaen Capital Lukas Weber, Bank Vontobel David Sussman, EFG Wealth Solutions Luke Janssen, Tigerspike Dawn Quek, Baker & McKenzie Marcel Kreis, Hubbis Dennis Tan, OCBC Bank Mark Buesser, IMTF Denny R Thaher, Maybank Asset Management Markus Grossmann, Trident Trust Dicky Fong, Amicorp Group Michael Benz Djoko Soelistyo, ANZ Michael Stemmle, additiv Dominic Volek, Henley & Partners Nicholas Hacking, ERI Bancaire Dr Daniel Brunner, TriLake Partners Noor Quek, NQ International Eric Boes, Amicorp Group Ntoudi Mouyelo, Amicorp Fajar Hidajat, Syailendra Capital Patricia Thomas, IRM Family Office Francisco Fernandez, Avaloq Paul Hodes, Citi Hans Diederen, Heritage Trust Group Peter Brigham, Rosemont Hanspeter Wolf, Appway Peter Golovsky, Amicorp Group Harold Y. Kim, Ph.D., Neo Risk Investment Advisors Peter Huber, Zurich Topas Life Indonesia
76 ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 Philipp Piaz, Finaport ADVERTISERS Prijohandojo Kristanto, PB Taxand Appway Rainer Michael Preiss, Taurus Family Office Asiaciti Trust Ralph Mogicato, Entrepreneur Aviva Investors Ray Soudah, MilleniumAssociates BVI House Asia Rolf Haudenschild, BRP EFA Group Sean Coughlan, Trident Trust FactSet Sebastian Dovey, Scorpio Partnership Franklin Templeton Investments Shanker Iyer, Iyer Practice Advisers Fullerton Fund Management Simon Price, Zurich Topas Life Indonesia Hansard Stephanie Jarrett, Baker & McKenzie Henley & Partners Steve Hickman, Swiss Life Heritage Steve Knabl, Swiss Asia IMTF Steven Seow, Mercer IRESS Subroto Som, Mashreq Bank Iyer Practice Advisers Sunil Iyer, Iyer Practice Advisers J O Hambro Capital Management Ted LeClair, Natixis Advisor Academy JPMorgan Ted Low, GAO Capital Numerix Teddy Oetomo, Schroders Indonesia Old Mutual Global Investors Tim Searle, Globaleye Pershing Tobias Tirtaatmadja, Amicorp Group Principal Global Investors Tri Djoko Santoso, FPSB Indonesia RHB Asset Management Vic Malik, Barclays Sun Life Financial Vineet K Vohra, Arete Financial Partners Swiss Asia Vivien Kusumowardhani, CIMB Sun Life Swiss Life Vivian Secakusuma, BNP Paribas Investment Partners Temenos Wai Soon Lum, Goldman Sachs Thomson Reuters Widrawan Hindrawan, DBS Bank Trident Trust Woon Shiu Lee, Bank of Singapore UBP Yai Sukonthabhund, Crossbridge Capital Asia Vermilion Software Yifei Li, BlackRock Vistra Yuki Diwinoto VP Bank Yuliana Djap, BII Maybank
ASIAN WEALTH MANAGEMENT - QUARTERLY - ISSUE 3 77 Hubbis digital learning solution Our learning platform
We help practitioners at Private Banks, Retail Banks, Insurance Companies, IFAs, Multi-Family Offices and Independent Asset Managers meet their professional education obligations via various digital learning content, event presentations, videos and more. HR & compliance Administrators The user Live learning LEARNING PLAN 100+ assessed courses Why we are different Digital learning modules ASIA-SPECIFIC CONTENT - Hubbis is the only Hubbis offers 100+ proprietary training courses covering provider of online learning that is solely dedicated to core topics relevant to compliance obligations, investment the Asian wealth management industry Tracking and product knowledge, advising families on long-term wealth Online Simple access through an internet We give HR & compliance managers structuring, and generally building and improving effective VALUE FOR MONEY - We want to ensure learning is Online courses & appropriate advisory skills in an Asian industry context. affordable and accessible to everyone in the wealth portal that is available 24 hours a day, the ability to build learning plans, and management industry. We never charge any fees for 365 days a year. You will have access apply those plans to defined groups, on-boarding or end-user training to 100+ engaging e-learning courses and track and record each individual’s Analyse results that enable users to conveniently earn learning progress. Reporting GOVERNANCE - We constantly review & upgrade CPT / CPD / OPT points. the relevance and timeliness of the platform – this The Hubbis system allows the recording and reporting of all includes adding new courses every week, adapting online and offline internal and third-party training in order to Tracking functionality to the needs of different markets and provide a complete training record for each individual. The types of institutions, and improving the technology. Hubbis digital learning platform also offers a dedicated report- We also regularly bring together - via our events ing feature enabling HR and / or compliance managers to gen- and private thought-leadership discussions - market erate customised data sets to match both internal and regula- experts on all topics. This enables us to check our Reporting Records tory training reporting requirements. existing content and plan new courses Not all e-learners are at the same stage The e-learning reporting function in their professional development or also allows all offline and 3rd-party COLLABORATION - We collaborate with more Reporting training lifecycle. The integrated training to be uploaded to give a single, 200+ hours of ‘live’ content than 100 existing partners on the learning platform reporting system allows HR & consolidated history for each user. It Presentations, video Q&As – getting feedback and incorporating new ideas for compliance managers to monitor also enables organisations to report Hubbis augments formal digital courses with over 200 hours content, functionality and technology. Plus, we work, employee progress - highlighting areas this training to the regulator in a fast, of live-learning content that ranges from videos to engaging across the overall Hubbis business, with more than 375 partners – continually discussing with them their of weakness / strength. accurate and consistent format. presentations from Hubbis’ highly-acclaimed Wealth Man- problems to understand the reality of the market agement events. Each training course and many of the ad- ditional materials are in modules of 30 and 60 minutes for Consolidated record EDUCATION - The material we produce is USEFUL CPT/CPD/OPT. And all Hubbis modules are assessed prior and USEABLE. It helps wealth managers and other to completion to assist in demonstrating user’s learning practitioners meet their continuing professional success for regulatory reporting. development needs in a practical and robust way
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