2016

ISSUE: AUGUST

Wealth
Management
in Asia 2016

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

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

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

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

Section 1
02 Business strategy

Section 2
92 Local markets

Section 3
136 Product & advisory offerings

Section 4
176 Family wealth

Section 5
194 Insurance in wealth management

Section 6
204 Digital wealth

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

36 WILL PRIVATE BANKING IN ASIA THRIVE OR WITHER?

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

i WEALTH MANAGEMENT IN ASIA 2016

CONTENTS

136 RE-IGNITING THE REVENUE ENGINE

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

166 CHANGING THE RULES OF THE ADVISORY GAME

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

186 A PRESSING NEED TO ENHANCE THE DISTRIBUTION MODEL

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

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

24 PROVING THE VALUE OF PROFESSIONALISM

Nick Pollard of CFA Institute

46 WHY PRIVATE BANKS WILL LIVE OR DIE ON INNOVATION

Mignonne Cheng of BNP Paribas Wealth Management

48 MAYBANK KEEPS FOCUS ON SUSTAINABILITY IN PRIVATE WEALTH

Alvin Lee of Maybank

72 A NEED TO BE NICHE
Brian Shegar of Emirates NBD

92 HOW BEA IS EYEING CHINA FOR WEALTH MANAGEMENT GROWTH

Grace Chow of Bank of East Asia

ii WEALTH MANAGEMENT IN ASIA 2016

CONTENTS

100 THE COMPONENTS OF A SUCCESSFUL WEALTH OFFERING IN INDIA

Karan Bhagat of IIFL Private Wealth Management

106 KASIKORNBANK SHOWS WAY TO SERVICE HNW THAIS

Jirawat Supornpaibul of Kasikornbank

110 BRINGING A BROADER AND DEEPER OFFERING TO THAILAND

Don Charnsupharindr of Citi

114 THAI INSURERS JUMP ON DIVERSIFICATION BANDWAGON

Kris Chantanotoke of Thai Life Insurance

124 CHANGING THE PHILIPPINES INVESTMENT MIND-SET

Robert B Ramos of Union Bank of the Philippines

126 CATERING TO A MORE GLOBAL OUTLOOK IN THE PHILIPPINES

Nanjo Berba of Philam Asset Management

134 CAN MALAYSIA CREATE A REAL CULTURE OF ADVICE?

Robert Foo of MyFP Services

146 PHYSICAL GOLD: ARE YOU READY?

Seamus Donoghue of Allocated Bullion Solutions

148 GIVING CLIENTS THE PRODUCT PROPOSITION THEY WANT

Lavanya Chari of Deutsche Bank Wealth Management

152 HOW CITI IS ENHANCING ITS ADVISORY OFFERING

Paul Hodes of Citi

157 GETTING ONTO A BANKS FUNDS DISTRIBUTION PLATFORM

Stewart Aldcroft of Citi

158 MAKING THE SWITCH FROM PRODUCTS TO PORTFOLIOS

Damien Mooney of BlackRock

160 WHY BANK DISTRIBUTORS MUST RE-TUNE PRODUCT PLATFORMS

June Wong of State Street Global Advisors

162 DRIVING A NEEDS-BASED CONVERSATION

Shikha Gaur of Aon Hewitt

iii WEALTH MANAGEMENT IN ASIA 2016

CONTENTS

164 NO ROOM FOR COMPLACENCY IN DISTRIBUTION

Alison Brown of HSBC Global Asset Management

170 FACILITATING A MORE CONDUCIVE INVESTMENT LANDSCAPE

Kevin Talbot of Aviva Investors

172 THE CHANGING LANDSCAPE OF OVERSEAS PROPERTY: CHINA FACTOR

Piers Brunner of Knight Frank

176 FACING UP TO THE REGULATORY REALITY OF TRANSPARENCY

Andri Manatschal of PwC

178 PLUGGING A GAP FOR LONG-TERM STRUCTURING ADVICE

Nigel Rivers of Capital Solutions

184 GREATER TRANSPARENCY RAISES PRIVACY AND ADVICE RED FLAGS

Stephanie Jarrett of Baker & McKenzie

193 KNOCKING ON ASIAS ONSHORE OPPORTUNITY

Jonathan Hubbard of UBS Wealth Management

196 BROADENING THE INSURANCE FOCUS ON HONG KONGS WEALTHY

Thomas Young of Generali

202 EYEING HEALTHY PROFITS FROM A MORE MOBILE CHINA

Rainbow Pan of Bupa Global

207 A PROCESS TO DIGITALISATION

Peter McMillan of Thomson Reuters

208 WHY BANKS MUST RELY ON FINTECHS

Ralph Mogicato of Angel investor and entrepreneur

214 WHAT IF AN UBER WEALTH WAS BORN?

Raj Ganesarajah of Intellect Design Arena

iv WEALTH MANAGEMENT IN ASIA 2016

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

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

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

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

18 FOCUSING ON WHAT MATTERS TO CLIENTS

Nigel Preston of St. Jamess Place Wealth Management

28 THE ROLE FOR BOUTIQUES IN ASIAS NEW WEALTH LANDSCAPE

Febby Avianto of Falcon Private Bank

52 HOW HSBC IS PURSUING ITS DESIRED PRIVATE BANKING MODEL

Sandeep Sharma of HSBC Private Bank

60 FOCUSING ON WHAT YOURE GOOD AT

Evrard Bordier of Bordier & Cie

64 BANK VONTOBEL EYES ASIA WITH OFFERING OF GLOBAL ACCESS

Georg Schubiger of Bank Vontobel

76 STEADY GROWTH WITH AN EYE TO THE MILLENNIALS

Vincent Chui of Morgan Stanley

80 INVESTEC STRIVES TO SET NEW ADVISORY TONE IN HONG KONG

Catherine Kirchmann of Investec Wealth & Investment

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

Anshu Kapoor of Edelweiss Global Wealth Management

116 KASIKORN ASSET MANAGEMENTS VISION FOR THAI DISTRIBUTION

Benjarong Techamuanvivit of Kasikorn Asset Management

118 A NOVEL APPROACH TO WEALTH ADVICE IN THAILAND

Paul Gambles of MBMG Group

132 A WEALTH OF OPPORTUNITY FOR RHB BANK

U Chen Hock of RHB Bank

174 HOW CREDIT SUISSE IS LEADING AN ASIAN ASSET MANAGEMENT CHARGE

Michael Levin of Credit Suisse

182 SHEDDING LIGHT ON THE ANATOMY OF A FAMILY BUSINESS

Hans Diederen & Angelo Venardos of Heritage Trust Group

v WEALTH MANAGEMENT IN ASIA 2016

CONTENTS

190 A GENERATIONAL MIND-SET TO SERVICING FAMILY WEALTH

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

194 SUN LIFE EMBARKS ON PATH TO TAP THE WEALTH PIPELINE

Jason Dehni of Sun Life Hong Kong

198 TOKIO MARINE CARVES LIFE INSURANCE NICHE IN SINGAPORE

James Tan of Tokio Marine Life Insurance Singapore Ltd.

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

32 ASIAN WEALTH MANAGEMENT FORUM 2016 - HONG KONG

Redefining business and advisory propositions

56 INDEPENDENT WEALTH MANAGEMENT FORUM 2016

Independent firms can grab more AUM, but growth hurdles remain

68 ASIAN WEALTH MANAGEMENT FORUM 2016 - SINGAPORE

Mapping out the future for Asian wealth management

84 WEALTH THINK 2016 - HONG KONG

Rethinking business models in Asian wealth management

94 MIDDLE EAST WEALTH MANAGEMENT FORUM 2016

Enhancing capability, capacity and pipeline in the Middle East

102 THAILAND WEALTH MANAGEMENT FORUM 2016

Thai potential heralds new dawn for wealth management offerings

120 PHILIPPINES WEALTH MANAGEMENT FORUM 2016

A need for more investment and conviction in the Philippines

128 MALAYSIAN WEALTH MANAGEMENT FORUM 2016

Finding the way forward in Malaysian wealth management

vi WEALTH MANAGEMENT IN ASIA 2016

EFG Bank The Best Global
Private Bank in Asia

For the fifth year running:

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

also
Best Domestic Private Bank in Hong Kong

Overall Best Private Bank in Hong Kong

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

Overall Best Private Bank in Singapore

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

EFG Bank Building

in Singapore

Hong Kong: 18 th Floor, International Commerce Centre, Kowloon Tel +852 2298 3000
Singapore: 25 North Bridge Road, #07-00 EFG Bank Building Tel +65 6595 4888
Shanghai: Unit 10, 65th Floor, Shanghai World Financial Center, Pudong
Tel +86 21 6168 0518
Jakarta: Wisma 46 Kota BNI, 31st Floor, Suite 31.06, Jalan Jend. Sudirman Kav 1,
Jakarta 10220, Tel +6221 579 00123.
CONTENTS

154 INVESTMENT SOLUTIONS FORUM 2016 - SINGAPORE

Finding investment solutions for challenging markets

180 INDIAN FAMILY WEALTH FORUM 2016

Managing Indian family wealth

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

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

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

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

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

vii WEALTH MANAGEMENT IN ASIA 2016

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

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

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

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

2015 Citigroup Inc. All Rights Reserved.

 USD20 bn USD1.73 trn 44

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

9,000 75% 47%

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

Content colour coding - for Hubbis articles

REGULATION & COMPLIANCE SKILLS

INVESTMENTS STRATEGY & BUSINESS

FAMILY WEALTH TECHNOLOGY

viii WEALTH MANAGEMENT IN ASIA 2016

 Build on our Knowledge
and Expertise.

Each of your clients has a unique set of investment goals,

be it saving for retirement, planning their childrens future or
identifying new sources of income. But they all have one big
question in mind.

So what do I do with my money?

At BlackRock, we know how much is riding on the answer.
Every day we partner with thousands of investors around the
world to help build dynamic, diverse portfolios which bring
them closer to what matters most to them.

Thats why BlackRock is trusted to manage more money than

any other investment firm in the world.*

Visit BlackRock.com to learn more.

*Source: BlackRock. Based on $4.7 trillion assets under management as of 31 March 2016. Investment involves risk, including possible loss of principal. In Hong Kong,
this advertisement is issued by BlackRock Asset Management North Asia Limited. This advertisement has not been reviewed by the SFC. (M-20150202-0118) In Singapore,
this advertisement is issued by BlackRock (Singapore) Limited (company registration number: 200010143N). 2016 BlackRock, Inc. All rights reserved. BLACKROCK,
SO WHAT DO I DO WITH MY MONEY and BUILD ON BLACKROCK are registered and unregistered trademarks of BlackRock, Inc. or its subsidiaries in the United States and
elsewhere. All other trademarks are those of their respective owners. 007036a-OTHR
FEATURE ARTICLE

A new look-and-feel for Asian

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

A July 2016 report by Oliver Wyman

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

2 WEALTH MANAGEMENT IN ASIA 2016

FEATURE ARTICLE
activity income has dropped quite con-
siderably over the last six months.
MULTI-PRONGED CHALLENGES
Market volatility and economic uncer-
tainty are adding to the pressures of a
wealth management industry already
challenged by operational efficiency,
margin pressures and regulatory re-
quirements. Most clients seem to be
waiting on the side-lines, having
adopted a wait-and-see approach
towards investments.
There are a lot of things going on glob-
ally which, I believe, warrants this rather
Coupled with the growing
complexity of doing business in
multiple jurisdictions, private
banks will have to modify and
fine-tune their business models
4 WEALTH MANAGEMENT IN ASIA 2016
It would certainly ensure
enhanced professionalism
over time if we could
stabilise management
turnover and as a result of
that, RM turnover.
LONNIE HOWELL
UCAP Asset Management
restrictive approach towards invest-
ments, says Lager, referring to the
upcoming US Presidential election,
Brexit, oil prices, Europes migration
problem, broader geo-political unrest
and China trying to cope with its loss
in industrial momentum.
And the low-yield environment on the
macro front is a problem both for
clients and banks. Return on all invest-
ments is lower, hence spreads have to
be thinner for clients to have a decent
return, explains Marc Van de Walle,
global head of products at Bank of
Singapore. In a nutshell, the challenge
and strategies.
JASON LAI
Thirdrock Group
is tackling rising cost despite margin
compression, he adds.
According to Lager, it may take time
before there is a return to a more stable
financial environment. In the mean-
time, banks will suffer at a top-line level.
SHIFTING LANDSCAPE
There is little doubt about the scale of
the opportunity bearing in mind the
regions wealth demographics.
Capgeminis World Wealth Report 2016,
for instance, said that in 2015, HNW
wealth continued to hit new record
highs, aided especially by Asia Pacific
overtaking North America as the num-
ber-one wealth market. And Japan and
China emerged as engines of global
growth, registering double-digit increas-
es in both the population of HNW indi-
viduals and UHNW wealth growth. To-
gether, the two countries drove nearly
60% of global HNW population growth.
And if past growth rates hold, Cap-
gemini predicts that Asia Pacific is likely
to continue to be a dominant force over
the next decade, representing two-fifths
of the worlds HNW wealth, more than
that of Europe, Latin America and the
Middle East and Africa combined.
Yet while wealth is growing, revenue is
challenged and costs keep rising.
In such an environment, some practi-
tioners say that only banks with critical
mass can offer the breadth of global
products needed to thrive.
In line with this, along with a maturing
and increasingly-competitive private
banking industry in Asia, consolidation
seems inevitable. The increasing cost
of doing business and squeezed margins
could force out some players whose
 an individual approach
is the only answer.

zurich singapore

impartial global exclusive swiss

info@finaport.com
FEATURE ARTICLE
The Panama Papers had more of
an impact on the public debate.
How much privacy do you allow
for those vehicles and how do
you ensure proper oversight?
core market is not Asia, says Amanda
Chen, deputy head of wealth manage-
ment, for Nomura in Asia ex-Japan. I
expect more consolidation in the private
banking space to meet regulatory re-
quirements as well as to meet banks
needs of investing in technology to
digitise salesforce and clients.
According to Van de Walle, firms with
less than USD20 billion in AUM may
find it hard to sustain operations in Asia.
In line with his prediction of further
consolidation in the Asian wealth man-
agement sector, he sees business
moving to larger companies. Smaller
players will find it harder to offer the
range of products and services that the
regions rich are looking for.
Speaking at Hubbis flagship wealth
management event in Hong Kong earlier
in 2016, Lonnie Howell, chairman of
UCAP Asset Management, described
this trend as reflective of what is going
to continue to happen in the industry.
But though the minimum size to be
successful keeps rising, due to cost of
compliance, pressure on margins and
the cost of technology, firms cannot
ignore the importance of local scale.
6 WEALTH MANAGEMENT IN ASIA 2016
STEFAN KUHN
Credit Suisse Private Banking
This is because Asia typically requires
a different business model, skill-sets,
people and platforms. So it is not just
global scale but also the scale within
Asia that matters.
Almost regardless of size, Ronald Lee,
co-head of private wealth management
at Goldman Sachs in Asia ex-Japan, said
at a recent Hubbis event in Hong Kong
that it is impossible to over-estimate
the value of having a consistent strat-
egy. Another factor that leads to
success is being true to your culture.
From his perspective, it is key for firms
to have a differentiated offering, given
that clients in Asia are spoilt for choice.
RE-SHAPED BY REGULATION
These trends have come in the wake of
the far-reaching impact of stricter
regulation over the last few years. This
has re-shaped the industry for good,
particularly in terms of KYC and AML.
And banks are grappling with how they
keep pace with the scale, speed and
costs of these and other current and
planned changes.
There is no excuse any longer for banks
not try, to the best of their ability, to
ensure all clients are fully transparent
both in relation to tax and plausibil-
ity of wealth.
The times when clients could hide
behind banking secrecy are dead and
will never return, says Lager. This will
become even more evident when CRS
kicks in fully in 2017 and 2018.
The Panama Papers incident also
caused a lot of work to work on inquires
and in-house checks. Yet this had more
of an impact on the public debate, says
Stefan Kuhn, head of compliance,
private banking, for Credit Suisse in
South-east Asia. How much privacy do
you allow for those vehicles and how
do you ensure proper oversight?
An immediate impact of the stricter
regulatory environment is the fact that
private bankers spend a lot more time
today on administrative work, which in
turn leads to less client-facing time.
The broader strategic implications,
however, include forcing banks to
rethink where to operate. In particular,
tax laws, cross-border rules and regula-
tory requirements relating to onshore
resident investors will continue to chal-
lenge the traditional offshoring banking
model, says Chen.
Regulations relating to product suit-
ability and selling processes will also
re-shape the industry, she adds, to move
away from a volatile and high-risk trans-
actional model to a more portfolio ad-
visory and management approach.
More importantly, as the volume and
pace of regulatory change continues to
weigh on the profitability of private
banks, which in some cases have led to
de-marketing and industry consolidation,
banks will need to narrow their focus.
 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
dont 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 info.sg@vpbank.com www.vpbank.com
VP Bank Group is based in Liechtenstein and has offices in Vaduz, Zurich, Luxembourg,
Tortola/BVI, Singapore, Hong Kong and Moscow.
FEATURE ARTICLE
The nature of private banking is es-
sentially suitcase banking, says Adriel
Loh, managing director and global head
of compliance at Bank of Singapore.
Regulators are becoming stricter on
the conduct of unlicensed activities
onshore. Hence, banks do need to have
a robust framework of dos and donts
of what can be done by a visiting RM
onshore without breaching local regu-
latory requirements.
According to Jason Lai, founder and
chief executive officer, Thirdrock Group,
coupled with the growing complexity
of doing business in multiple jurisdic-
tions, private banks particularly small-
to-mid sized players will have to
modify and fine-tune their business
models and strategies. This means tar-
geting specific client segments and
geographies instead of a full-service
proposition to all, he explains.
This may include reconsidering re-
gional expansion, de-marketing where
necessary, and investing in technology
that enhance process automation, risk
management and relationship manage-
ment, says Lai. Strategic technology-
related investments, in particular, may
become a best-in-class point of dif-
8 WEALTH MANAGEMENT IN ASIA 2016
As licensing regimes
change [in China], we will
move people onshore
over time and increasingly
the offshore and onshore
markets will converge.
NEIL HARVEY
Credit Suisse
ferentiation among players and have
the potential to enhance wealth for both
wealth managers and their clients.
CHINA BECKONING
When looking for the biggest wealth
management openings going forward,
however, a common question is how to
make the most of the China opportunity.
This has become more tangible for in-
ternational banks and other advisers in
the wake of the slowdown of the
Chinese economy in recent years. This
has increased the appetite of Chinese
HNW individuals for diversification and
overseas investment alternatives, giving
international wealth managers oppor-
tunities to gain traction in the market.
While most wealthy Chinese individu-
als still prefer to manage their own
wealth and investments, they are
gradually recognising the importance
of professional advice to preserve their
wealth and mitigate risks, explains Lai.
Data also suggests that these clients are
entrusting an increasing percentage of
their investable assets to third parties, he
adds, from an average of 25% of their
investable assets in 2009 to 65% in 2015.
Taking advantage of this potential
however, requires, firms need to navi-
gate effectively through the increas-
ingly complex legal and regulatory
policies, dynamic political environment
and slowing economy.
To date, many international institutions
have dipped their toes in water, but
they still lack the full suite of licences
to do private banking or have enough
of an onshore footprint to ensure cov-
erage on the manufacturing side, says
Neil Harvey. chief executive officer for
Credit Suisse in Greater China. As li-
censing regimes change, we will move
people onshore over time and increas-
ingly the offshore and onshore markets
will converge, he adds, We are posi-
tioning the firm for that move.
When assessing whether to collaborate
to accelerate access to the market in
China, Bassam Salem, region head, Asia
Pacific at Citi Private Bank, is wary of
joint ventures. I have not seen that
many successful business strategies that
are based on a joint venture.
Even those institutions which have
invested directly have found China a
difficult place to make money. The vast
majority are not making money, says
Michael Blake, chief executive officer,
private banking, Asia at UBP. China is
a tough market in which to succeed.
Yet he is positive about the interna-
tionalisation of China and demand for
offshore products. This is a massive
opportunity for Hong Kong-based
wealth managers.
Lai says wealth managers also need a
thorough understanding of the specific
attitudes and approach of this diverse
population of wealthy Chinese to wealth
and wealth management so they can
Shared Ambition, True Results
Bain & Company is the management consulting firm that the We measure our results by our clients success.
Bain clients outperform the market 4 to 1.
worlds business leaders come to when they want results
Bain advises clients on strategy, operations, customer strategy and marketing, Cumulative percentage change in share price
technology, organization, private equity and mergers and acquisitions. We
8K
develop practical, customized insights that clients act on and transfer skills that
make change stick. Founded in 1973, Bain has 53 offices in 34 countries, and
our deep expertise and client roster cross every industry and economic sector.
Our clients have outperformed the stock market 4 to 1.
6
What sets us apart
Bain Clients
We believe a consulting firm should be more than an adviser. So we put
ourselves in our clients shoes, selling outcomes, not projects. We align our
4
incentives with our clients by linking our fees to their results and collaborate to
unlock the full potential of their business. Our Results Delivery process builds
our clients capabilities, and our True North values mean we do the right thing
for our clients, people and communities always.
2
Bain Greater China S&P 500

Bain was the first strategic consulting firm to set up an office in Beijing in 1993.
Since then Bain has worked for both multinationals and local clients from more
0
than 30 industries. We have served our clients in over 40 cities in China. There are
1980 1990 2000 2014
now 3 offices in Greater China region, covering Beijing, Shanghai and Hong Kong.
There are about 200 consultants currently working in Greater China, with extensive Note: Calculation of cumulative percentage change attested
experience working with Chinese and multinational companies. to by an Independent Accountant through December 2014

Bain Financial Services Practice

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

Bain has deep expertise in financial services, but we also look beyond the Jennifer Zeng
industry and draw upon our capabilities experience. We tailor these offerings to Partner, Beijing
the needs of our financial services clients to help them solve problems or pursue jennifer.zeng@bain.com
opportunities in many strategic and operational areas such as growth strategy,
customer strategy and NPS, organizational effectiveness, operational excellence,
mergers and acquisitions, change management and performance improvement. www.bain.com
FEATURE ARTICLE
better tailor their advice and solutions
to meet the needs of this crowd. The
newly-rich who accumulated their wealth
rapidly through the growth of innovative
industries like technology tend to be
relatively young, say Lai. Statistics
suggest that 80% of them are under 50
years of age. Plus, he adds, they tend to
be more aggressive in their investment
styles with a focus on wealth creation,
rather than wealth preservation.
The newly-rich are the most attractive
segment also for Joseph Tam, executive
vice president and head of private
banking and wealth management at
Wing Lung Bank. They are the first
generation of new rich since the Chinese
economic reforms in 1978, he explains.
They are mostly in their early 50s, they
are entrepreneurs and not familiar with
offshore investment markets. They will
be the most profitable segment.
At the same time, the relatively early
stage of development of the wealth
management industry in China also
means the infrastructure and talent pool
may not be as established as other global
wealth management centres. So theres
still a lot of room for investor education.
And the opportunity here is for wealth
10 WEALTH MANAGEMENT IN ASIA 2016
If we have stability and
longevity, then there is a
strong bond between the
client and the bank.
BASSAM SALEM
Citi Private Bank
management firms to provide sufficient
information, recommend appropriate
products and more importantly, mitigate
risks for their clients, adds Lai.
And apart from domestic banks, Lai
believes competition may also come
from unexpected sources such as
WeChat, the instant messaging plat-
form, that has made advances into fi-
nancial services, and online commerce
giants like Alibaba.
Digital delivery will be key in China,
explains Harvey.
The first generation
of new rich since the
Chinese economic
reforms in 1978 will
be the most profitable
segment.
JOSEPH TAM
Wing Lung Bank
ENHANCING REPUTATION
More broadly for the wealth manage-
ment industry going forward, it needs
to work on improving its reputation
among clients for service quality.
While there are various ways it can do
this in terms of more narrowly-defined
value propositions, many practitioners
point to the need for a review of com-
pensation models.This is focused on the
RMs, who are still central to the proposi-
tion, but all the other interaction points
with the customer will become more
important as well.
Encouraging longevity of RMs would
generate the greatest benefit, according
to Howell, It would certainly ensure
enhanced professionalism over time if
we could stabilise management turnover
and as a result of that, RM turnover.
Ultimately, clients like stability, adds
Salem. We sometimes forget that private
banking is predominantly a relationship
business. A client can relate to the person
at the top and stability is a positive thing,
he explains. If we have stability and lon-
gevity, then there is a strong bond
between the client and the bank.
 OUTSTANDING REGIONAL PRIVATE BANK
NORTH ASIA 2015

The Value of BEA Private Banking

Enjoy comprehensive personal and corporate financial services,
with tailor-made solutions to suit your every need. Our extensive support network in
Greater China ensures that expert advice is always on hand.
Hotline: 3608 0360 www.hkbea.com

Issued by The Bank of East Asia, Limited

FIRM PROFILE

EFG shows clear conviction

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

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

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

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

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

12 WEALTH MANAGEMENT IN ASIA 2016


ALBERT CHIU
EFG Bank
ingly aware of the seemingly dispropor-
tionate risks of providing a private
banking offering compared with the
value it brings overall.
It is not valid anymore for some firms
to do this type of business, adds Straeh-
le, who says he expects to see fewer
private banks going forward. But those
which survive will be more focused on
what they do best.
Yet this creates a good opportunity for
banks with a differentiated business
model, adds Albert Chiu, head of the
Asia region for EFG. The merger with
BSI will allow us to move to a different
league and also be in a position to
benefit from the consolidation happen-
ing in the market.
The merger also makes sense when
looking at a world map.
The two banks are complementary geo-
graphically giving each other access to
new markets, such as in Switzerland, and
across Europe, Latin America and Asia.
In Asia more specifically, EFG brings 320
staff, including 100 client relationship
officers (CROs) to the table, compared
with 300 staff and 70 relationship man-
agers at BSI. In terms of AUM, as of the
end of 2015, EFG counted CHF16.2
billion, and BSI CHF12.4 billion.
In fact, in each region of the world,
besides the UK, the combined bank will
have at least CHF25 billion in AUM,
which Straehle sees as a key number
when it comes to size.
NO ROOM FOR DOUBT
To some observers, the crackdown and
enforcement action on BSI in Singapore
The merger with BSI will allow us to move to a
different league and also be in a position to benefit
from the consolidation happening in the market.
(SGD13.3 million in fines) and Switzer-
land (CHF95 million in penalties) in May
and June 2016 might seem too much
for anyone to bear.
But EFG certainly went into the deal
with its eyes wide open.
What has happened [to BSI] shows why
we have indemnifications in place up to
the purchase price, plus a large amount
of shares in escrow, says Straehle.
More specifically, it was agreed in the
share purchase agreement that the in-
demnity will be backed by a material
Swiss escrow account which, at closing,
will contain 51 million EFG shares issued
to BTG Pactual as consideration, with
shares locked up for two years.
The fine and the penalty will result in a
reduction in the purchase price. The
indemnities and escrow account remain
unchanged.
From EFGs perspective, it believes that
a line has now been drawn from a Swiss
and Singaporean regulatory standpoint
in connection with this matter.
As a result, it should constitute another
important step to remove related regu-
latory uncertainty for clients, employ-
ees, investors and other stakeholders,
says the bank.
EFG International also received ap-
proval in late May 2016 from the Swiss
Financial Market Supervisory Author-
ity, FINMA, for the proposed acquisition
of BSI. This was granted on condition
that BSI is fully integrated and legally
dissolved within 12 months.
With a view to a swift and orderly
closing, the process for obtaining the
other regulatory approvals for the trans-
action is also on track, says Straehle.
With the many employees that display
professionalism, knowledge and integ-
rity every day at both banks, Im con-
WEALTH MANAGEMENT IN ASIA 2016 13
FIRM PROFILE
vinced we have a successful future
ahead of us, he adds. We will work with
BSI to ensure a smooth transfer of
clients and employees.
It is expected to complete at the latest
in the fourth quarter of 2016, as origi-
nally announced.
CREATING STABILITY
The integrated nature of the deal is
reflected in the July 2016 appointments
to the executive committee and a new
management structure for the com-
bined EFG and BSI business which
includes five executives from BSI:
Renato Cohn, Reto Kunz, Maurizio Mo-
ranzoni, Gerald Robert, and Renato
We want to be seen as a bank which focuses on offering
private banking services, with a global network in the
regions we consider to be important.
Santi. This will become effective as of
the date of the closing of the transaction.
This should help to provide stability
and reduce any insecurity in relation to
the merger, says Straehle.
Adds Chiu: There has been a lot of
emotion around what has happened to
BSI in Singapore, but the EFG manage-
ment has worked hard to quickly outline
our plans in terms of transferring BSI
staff, clients and the business as soon
as possible.
Another stabilising factor has been
EFGs commitment to taking as many
14 WEALTH MANAGEMENT IN ASIA 2016
staff as it can as part of the integration
with BSI.
This is important for Chiu, in particular,
given his expectations that the business
will significantly grow in line with op-
portunities in the region.
And going forward, the bank will screen
clients from BSI and enforce compliance
standards as it integrates the newly-
acquired assets worldwide.
From a technology perspective, mean-
while, the integration is expected to be
relatively smooth. For example, rather
than many different legacy systems,
both banks have just one Temenos for
EFG, and Avaloq for BSI. They will con-
solidate the platform using EFGs exist-
ing platform.
Where there is still work to be done,
however, is in working to combine
various personnel strengths as part of
a team, to bring together individuals in
a focused way.
We do not want to continue in the old
ways of having CROs specialised in dif-
ferent areas, says Straehle.
At the same time, the EFG model might
also help ensure that the bank doesnt
inherit BSIs problems. Given that it
looks to only hire senior and experi-
enced private bankers, they should have
an understanding of the long-term
nature of their business.
CLEAR VISION
Straehle wants to enjoy a fresh start
after integrating the platform. We want
to be seen as a bank which focuses on
offering private banking services, with
a global network in the regions we con-
sider to be important, especially in Asia.
In line with this, he is determined to
ensure the offering remains advice
driven, albeit making it clear that the
bank can still offer clients the asset
management capability. It is always
important to be in the top quartile in
terms of performance, he adds, to
demonstrate to clients we can do the
asset management also.
And by focusing on what it does best,
EFG should be well-placed with its
know-how and bankers to service the
types of clients that its offering is most
suited to those individual and families
with USD10 million or more in net worth
and who have an international portfolio
and lifestyle. For these clients, we have
much bigger advantage than local
banks, says Straehle.
Ultimately, he doesnt see any real dif-
ficulties in maintaining the EFG model
and value proposition once the BSI ac-
quisition is complete.
While various aspects of how the banks
operate need to ironed out in order to
find a middle ground, the broader objec-
tives seem reasonably well aligned.
Both banks see the importance of the
client being at the centre, and we want
to give them advice, says Straehle. This
is a business model we are very specific
and clear about maintaining.
 The only people who see the whole picture
are the ones who step out of the frame.
Salman Rushdie

Forward Thinking. Thinking Forward.

Seeing the bigger picture is fundamental to how we manage your investments. An award-winning
independent investment manager, we take an objective and holistic approach to understanding your
unique financial needs before providing investment expertise to develop a bespoke portfolio that
reflects your goals and complements your vision.

Thirdrock defines the best of what you should expect of your investment manager a
comprehensive suite of investment solutions, backed by the expertise and commitment of our
investment team; a comprehensive technology platform powered for high-impact investment insight,
portfolio analysis, and compliance and risk management; as well as a trusted network of top-tier
partners for solutions in alternative investments, real asset investments, succession and tax planning.
All to help you grow and preserve your wealth for generations with the personalised, attentive service
that you deserve.

Best Independent Wealth Manager

WealthBriefingAsia Singapore 2016

Investment Management I Fund Management I Corporate Advisory I Financial Technology

5 Temasek Boulevard, #10-06, Suntec Tower Five, Singapore 038985

T 65 6922 0750 F 65 6922 0759 www.thirdrockgrp.com
EXPERT INSIGHTS
The emergence of Asian
multi-family offices
Philippe Legrand of London and Capital Asia explains why the growth of Asian multi-
family offices offers a new option for those looking for service beyond brand.
The changing landscape of Asian wealth
management has led to a growing
number of senior bankers offering their
services in a regulated environment but
outside the traditional banking platform.
This has come in the wake of the 2008
financial crisis and various other chal-
lenges since.
For a lot of banks, wealth management
is not their core business, nor does it
account for a large part of their income.
So with a tougher market environment
and greater risks of damage to reputa-
tions, banks have re-assessed whether
they want to be in this business in Asia,
beyond their home markets in Europe
and the US.
As a result, menus have shrunk at many
institutions, in terms of what they can
offer and what they are willing to discuss
with customers, says Philippe Legrand,
chief executive officer and founder of
London and Capital Asia.
16 WEALTH MANAGEMENT IN ASIA 2016
At the same time, for clients in Asia,
which are increasingly sophisticated
and entrepreneurial investors, they
require more than a standard wealth
management offering to meet their
corporate, lending, wealth management
and family-related needs.
According to Legrand, trends such as
the internationalisation of wealth,
coupled with a growing focus among
clients on real estate and other illiquid
assets, dont play to what banks want
to do for clients. This is because these
services and products are not based on
assets that can be put on the balance
sheet, he explains. PHILIPPE LEGRAND
London and Capital Asia
In response to this, the concept of multi-
family offices in Asia has emerged, says
Legrand. This segment now accounts
for between 5% and 10% of private
wealth assets managed in Asia. menus, explains Legrand, so can focus
on alternative options beyond liquid
By being outside the bank, these inde- assets ranging from real estate to
pendent firms are not limited by any private equity to direct investments.
We turn our clients
strategy into a value-
creating reality.
With expertise.
synpulse.com

Singapore | Hong Kong | Zurich | Frankfurt | Hamburg | London | New York

FIRM PROFILE
Focusing on what matters
to clients
St. Jamess Place Wealth Management is adamant that its advisers should be interacting
with clients as much as possible despite a growing administrative burden. So it has
created a support infrastructure and approach to investing to match, says Nigel Preston.
Quality not quantity is an over-used
term, but one which rings true for St.
Jamess Place Wealth Management
(SJP) in Singapore.
The firm is growing steadily, but at a rate
which Nigel Preston, chief executive
officer for the local business, is confident
wont compromise the service levels,
investment proposition or brand repu-
tation that SJP proudly makes a point
of upholding.
We are pursuing comfortable growth
in a way that we can manage it and
continue to deliver on our commit-
ments to our clients and Partners,
explains Preston.
BRAND PROTECTION
SJP is realistic in its growth objectives.
It inducts around one partner a month
at the moment and is looking forward
to increasing its number of financial
advisers in Singapore from 35 to 40 by
the end of 2016. But the firm will only
18 WEALTH MANAGEMENT IN ASIA 2016
do this if it finds suitable people: that
is, individuals who share the same
values as the business and would there-
fore make the right fit. Because of this,
Preston explains that SJP tends to only
look for individuals with proven track
records from well-respected firms.
When a new Partner is invited on-board,
there is a suite of business development
managers in place; professionals who
are specifically appointed to provide
support, add value and help grow the
Partners business in a safe, considered
way which encourages maximum benefit
for their clients.
NIGEL PRESTON
Inevitably, this means working within SJP
the spirit of the local regulation in
Singapore, to meet the expectations
of the balanced scorecard framework
amid the various initiatives on the
FAIR agenda. Singapore at the start of 2015, it now
counts six full-time staff in this function.
The firm has invested to keep on top of They spend their time, says Preston,
this. From a single compliance officer in ensuring quality is assured whilst MAS
Take Your Investment Advisory
Service to the Next Level
Bring greater insights and digital capabilities
to your clients.
Thomson Reuters Digital Solutions assists wealth managers and professional
advisors to effectively realize their clients investment goals. Cross asset financial
market content, analytics, and web-based tools can be delivered direct to your
company intranet/extranet, market data system or mobile platform. Craft better
strategies, enhance your client engagement, and offer greater value.

Turn-key financial market data, news and analytics

Flexible feed delivery options to fit your workflow and internal
distribution platforms
Powerful tools that are web-ready and optimized for mobile applications
Design, delivery and hosting of your own customer-facing website or app

Learn more: financial.thomsonreuters.com or contact your representative.

2015 Thomson Reuters. Thomson Reuters and the Kinesis logo are trademarks
of Thomson Reuters and its affiliated companies. S026784 10/15.
FIRM PROFILE
regulations are fully understood and
adopted. SJP has also appointed group
business risk managers to support the
management team.
We aim to help our own Partners build
their businesses in the right way with
client relationships being based on
longevity, explains Preston, and un-
derstand how we should be servicing
our clients.
INVESTING MORE SMARTLY
In its mission to constantly bring the best
value to its clients, the firm is continu-
ally developing its investment offering.
Local market research is conducted to
enhance the product range and overall
service, which Preston sees as a real
differentiator: the investment manage-
ment approach is not about simply
bringing a UK-centric proposition to
clients in Asia.
We are pursuing comfortable growth in a way that
we can manage it and continue to deliver on our
commitments to our clients and Partners.
We are geographically worldwide with
local flavouring. We have seen that
whether or not we already have in place
some local fund managers in Asia, there
is demand for more.
As a result, the firm is working on iden-
tifying a greater variety of fund manag-
ers specialised in Asia.
Choice is the biggest challenge our
clients in Asia have, says Preston.
20 WEALTH MANAGEMENT IN ASIA 2016
When they look at the market place
globally, there are thousands of options
for them to choose from. This in itself
can be confusing.
As a result, the developments in this
area are important to give confidence
to clients about how the firm can help
them with those investment decisions.
ALIGNMENT
The upshot of SJPs processes and overall
approach to doing business is to ensure
its Partners can spend more time with
clients on their financial plans and to
understand their latest circumstances.
This is increasingly core to staying rel-
evant to clients given that people now
seem to move between locations and
change jobs more often. It is important
that we understand our clients chang-
ing attitudes to risk and their financial
and other objectives, explains Preston.
This is also a proposition which is de-
signed to attract Partners to join the
firm. All our relationships are built on
longevity as part of our value-based
reward scheme, explains Preston.
This enables an individual, at a later
stage, to capitalise on the recurring
income stream they have built up over
the years from the excellent service
they provided their clients. We play
the role of the broker and offer a Part-
A clear approach to
investment management
SJPs philosophy reflects its
beliefs that no single investment
house has a monopoly on
investment expertise, and it
does not employ in-house
investment managers.
Instead, it selects a number of
external managers of what it
considers to be outstanding
ability to manage its range
of funds.
This has a number of advantages.
First, it gives the firm the
freedom to select best-in-class
managers from the global
investment market to manage
its funds on behalf of its clients.
Secondly, it enables it to change
any of these managers at short
notice if it has lost confidence
in them, without any charges,
tax or inconvenience to clients.
And thirdly, it offers clients a real
opportunity to diversify their
investments by spreading their
money across funds managed
by different managers with
different styles.
ners book to someone else internally
who is capable of servicing those
clients, he adds.
As a result, client relationships are
managed from the outset with a long
term view in mind, helping to foster a
longer term relationship.
We have paid out hundreds of millions
of pounds in our UK business based on
these schemes, showing that they really
do benefit both the client and the
Partner, says Preston.
THE
BOTTOM
LINE IS: WE
IMPROVE
YOUR
If youre looking for
a consulting partner to
make a positive impact
on your business,
visit orbium.com

BOTTOM
LINE.
EVENT HIGHLIGHTS - COMPLIANCE IN ASIAN WEALTH MANAGEMENT FORUM 2016 - JANUARY
Gearing up for greater
compliance scrutiny
With the regulatory and compliance burden getting heavier and more complex than
ever before for wealth management institutions of all types and sizes in Asia the
event revealed key strategic challenges and initiatives that anyone who wants to
survive must act on quickly.
Among the many compliance-related
challenges confronting financial institu-
tions across Asia in 2016, perhaps the
most prominent continues to be on the
AML, onboarding and tax transparency
sides of the business.
While this wasnt considered the biggest
issue according to a sentiment poll of
compliance practitioners and front-line
advisers at our Compliance in Asian
Wealth Management Forum 2016 in
Singapore in January, it is clearly the
priority for regulators.
As a result, senior practitioners said at
the time that the AML and tax-relating
reporting must remain high up on the
priority list for wealth management
organisations. This included the
Common Reporting Standard (CRS) and
Automatic Exchange of Information.
22 WEALTH MANAGEMENT IN ASIA 2016
A clear take-away, therefore, was that it
is ever-more critical for institutions and
advisers alike to make sure the back-
ground checks and client due diligence
they do are done right and monitored.
The various global standards and drive
towards transparency dont just require
new procedures, enhanced and ex-
panded. In addition, a significant chal-
lenge highlighted was the timeliness of
these procedures.
For instance, although a lot of countries
have announced they will be early adopt-
ers, they havent yet signed the necessary
inter-governmental agreements or put
their own regulations in place.
Institutions must get their governance
right in terms of operational risk manage-
ment and compliance. Are the respon-
Thank you to our sponsors
AG Delta
Amicorp Group
BRP
IMTF
Allocated Bullion Solutions
Knighthead
Swiss Asia
Thomson Reuters
sibilities and boundaries clear? Probably
not in most cases, said speakers. Risk
functions were advised to turn from
being reactive to becoming proactive,
assuming the governance structure can
support such decision making and re-
sponsibility under one roof.
At the same time, given the new report-
ing obligations, the industry must guard
against the risk of misinformed clients.
Ethical compliance was another area
discussed as being under more and
more scrutiny and expected to come
under a sharper regulatory spotlight.
Newer themes also emerged as issues:
information security and data privacy,
arising from various mishaps.
Simon Wong Andrew Au Andrew Chow Byron J Murphy Vincent Koo
AG Delta AG Delta BNP Paribas Globaleye BNP Paribas Wealth Management

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

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 23

EXPERT INSIGHTS
Proving the value of
professionalism
CFA Institute is taking to the streets with a new initiative to drive greater
awareness of the value of the qualification and professional accreditation.
Re-affirmed in a survey released by CFA
Institute in early 2016, it is clear that
investors today expect higher levels of
transparency and communication than
ever before.
At the same time, they are increasingly
holding their investment managers to
the highest ethical standards, while they
are, as investors, always laser-focused
on returns.
Meeting these requirements is no easy
task. But it demands a certain level of
professionalism, bolstered by technical
knowledge and market experience.
This is where CFA Institute believes it
can flourish. And especially in the type
of market environment that is now con-
fronting asset and wealth managers.
We intend to more strongly articulate
the value of the CFA designation to
investors such that industry firms un-
derstand the benefits of employing
24 WEALTH MANAGEMENT IN ASIA 2016
charterholders through what we
believe in and advocate, says Nick
Pollard, managing director, Asia Pacific
at CFA Institute.
FAR AND WIDE
To kick-start a new initiative aimed at
achieving just this, the organisation
has embarked on a far-reaching brand
advertising campaign.
This involves billboards across key
markets in Asia including Hong Kong,
Singapore, India, China and Australia,
as well as in other parts of the world.
We want to get the message across that NICK POLLARD
we are not just focused on an examina- CFA Institute
tion credential, but instead we are the
professional body of the investment
management industry, says Pollard.
The headlines used in the campaign aim vestment service and they deserve the
to underpin this message. Some of these highest ethical standards. And: 20
include the following slogans, for years of investment management expe-
example: My clients expect great in- rience and putting investors first.
True prosperity is
more than financial.

At RBC Wealth Management, we understand that growth isnt just about investments. Its about our commitment
to helping clients achieve their goals while enjoying peace of mind. For over a century, weve prided ourselves
on helping our clients realize the life they envision, all starting with a relationship based on trust, integrity and
exceptional service. This approach has made us one of the worlds top five wealth managers.1 To find out more,
please visit rbcwealthmanagement.com

Investments | Trust Services | Credit & Banking Solutions | Asset Management

Canadas largest bank

by market capitalization2

1 2
Scorpio Partnership Global Private Banking KPI Benchmark 2015. As of April 30, 2016, Bloomberg. RBC Wealth Management is the global wealth business
of Royal Bank of Canada and affiliates. / Trademark(s) of Royal Bank of Canada. Used under license. Above mentioned services are offered through
Royal Bank of Canada or its affiliates. This advertisement does not constitute an offer of product or service to any person in any jurisdiction to whom it is
unlawful for RBC Wealth Management to make such an offer.
EXPERT INSIGHTS
To give the message more meaning, CFA
Institute has also called on charterhold-
ers who are active within their local
communities to feature prominently. in
the campaign.
We want to show the range of people
who are charterholders, in terms of
what they do as well as the markets we
are in, says Pollard.
While the messaging is consistent glob-
ally, some tweaking for each local
market is an important feature of the
campaign. In Hong Kong, for instance,
the organisation is looking to explain
26 WEALTH MANAGEMENT IN ASIA 2016
What a CFA designation
means in practice
According to CFA Institute,
practitioners who are
charterholders are uniquely
positioned to serve clients needs
for several reasons:
They are trained in the
highest industry standards
and best practices which
translates to world-class
investment knowledge, more
insightful questions and
deeper understanding of the
the need to raise the bar higher, espe- global economic climate,
cially in terms of market knowledge. resulting in greater perceived
value of client service and
firm engagement
TIMING
It might seem like a good point in the
They are bound to a client-
market cycle for CFA Institute to be first duty of care, loyalty,
giving some clear and strong reminders disclosure and compliance,
to the investment community about the putting investor needs first
need for professionalism and integrity.
They annually attest the
Standards of Professional
Few market practitioners could argue
Conduct, which informs
with the fact that the time has come to professionalism and integrity
more successfully equate the CFA In- of capital markets, duties
stitute brand with an established profes- to clients and employers,
sion akin to the legal, medical and investment analysis and
recommendations, and
accounting professions.
conflicts of interests
bolstering client trust and
firm integrity
Ultimately, CFA Institute says it is
focused on getting more employers to
demand professionals with the CFA
designation.
And in particular, across Singapore
and Hong Kong, for example, it is
looking to increase visibility among
private banks, family offices and in-
vestment managers.
 ARE YOU INVESTING
IN YOUR CHILDRENS
FUTURE?

Everyone wants the best for their children and none

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

ST. JAMESS PLACE WEALTH MANAGEMENT

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

The St. Jamess Place Partnership and the titles Partner and Partner Practice are marketing terms used to describe St. Jamess Place representatives.
Members of the St. Jamess Place Partnership in Singapore represent St. Jamess Place (Singapore) Private Limited, which is part of the St. Jamess Place Wealth
Management Group, is regulated by the Monetary Authority of Singapore and is a member of the Association of Financial Advisors (Singapore).
Company Registration No. 200406398R. Financial Advisers Licence No. FA100026.
St. Jamess Place Wealth Management plc Registered Office: St. Jamess Place House, 1 Tetbury Road, Cirencester, Gloucestershire, GL7 1FP, United Kingdom.
Registered in England Number 4113955.
FIRM PROFILE
The role for boutiques in Asias
new wealth landscape
Febby Avianto of Falcon Private Bank explains why institutions of boutique size are more
agile and aligned with their clients both in terms of culture and outcome, and why they
have a key part to play in Asias evolving HNW and UHNW market.
Amid the polarisation of private banking
in Asia, the boutique players have an
opportunity to shine.
Despite the many challenges facing all
industry players, as the needs of HNW
and UHNW clients change, so too does
the potential to offer them more than
just portfolios and products.
There is a need to not only manage their
wealth, but also to help them grow their
business and navigate the relationship
between their personal and business
wealth, both offshore and onshore,
explains Febby Avianto, head of private
banking for Falcon Private Bank in Asia.
And these requirements remain, despite
the political or economic situation.
The key, he adds, is to be flexible enough
to adapt to the approach that will suit
each client. This is made possible within
a bank with a staff of 400 compared with
a bank which has over 10,000 employees.
28 WEALTH MANAGEMENT IN ASIA 2016
CLOSER RELATIONSHIPS PAY OFF
To articulate where it is important for a
private bank to deliver something dif-
ferent, Avianto defers to the people
factor. This comes down to the quality
of the RM (relationship manager) and
the understanding that they have of
their clients businesses and personal
financial needs, he explains.
This then feeds into ensuring a team-
based approach.
I have worked in big banks, but I person-
ally decided to join Falcon Private Bank
because sometimes, big banks can be
less flexible when meeting the many FEBBY AVIANTO
different needs of clients, adds Avianto. Falcon Private Bank
Investment opportunities are one such
example. For us, there is no limitation
in the same way as there might be in
big institutions, like having to work with Putting clients with similar goals and
the investment banking side of the busi- interests together is also an important
ness, or requiring minimum revenue to value-add. Take a client in the prop-
do a deal, he explains. erty business, for example, who needs
FIRM PROFILE
financing for his building. Their local
bank will likely charge them a rela-
tively high interest rate due to the
nature of such a project.
This is where Avianto says the bank can
help. We dont only help the client who
has a hotel he wants to sell, but I will
find a client who wants to buy that
hotel, he explains.
To do this, you have to understand each
clients business, he adds.
This relies initially on an RM being able
to talk to clients about the palm oil in-
dustry, for instance.
This might then generate further advi-
sory business as a result of uncovering
a need a client might have to hedge a
position, for example, or to structure a
private equity deal.
Being able to act quickly is another
benefit of a boutique bank that Avianto
believes matters in such a match-
making role.
LOCAL FLAVOUR
As part of Falcon Private Banks aspi-
rations for growth and deeper pene-
tration in the key markets in South-
east Asia, Avianto is focused on making
sure he has the right RMs targeting
the right clients.
We need to have local RMs to provide
local content and knowledge in cover-
ing our target markets, and they are
not just looking at the big cities, but
also venturing into other parts of the
country where we understand what
different types of clients in these places
need, explains Avianto.
In Indonesia, for example, some indus-
tries only grow in certain cities, meaning
30 WEALTH MANAGEMENT IN ASIA 2016
that new wealth gets created in pockets.
Coffee and rubber, for instance, come
from the small city of Lampung, requir-
ing bankers to get close to the producers
and distributors of tractors.
Thats why we believe having a sea-
soned private banker who also under-
stands the corporate banking market is
necessary, says Avianto.
They need to be able to talk about the
business, he adds.
Mining these opportunities also involves
Falcon Private Bank collaborating with
local asset management companies and
securities firms in each market.
The rationale, says Avianto, is that global
transparency has made confidentiality
redundant as a differentiator.
This is forcing banks to compete purely
on their services, meaning customisation
based on an understanding of the client
and the local regulatory environment.
The new tax amnesty in Indonesia is a
good example, he adds.
SOLID BACKING
Although Falcon Private Bank can
promote its agility due to its size and
structure, Avianto recognises the value
of being ultimately owned by a sover-
eign wealth fund.
Clients have more faith in us for being
owned by IPIC, as the sovereign wealth
fund of Abu Dhabi, which is still rela-
tively secure, he says.
In addition to the financial stability that
IPIC provides, it is a supportive parent,
as Falcon Private Bank looks to grow in
Asia and maintain its emphasis on being
entrepreneurial.
Falcon Private Banks
three-pronged value
proposition
Swiss heritage
A Swiss-made experience
backed by 50 years of
advisory and investment
competence to its clients
The Swiss heritage caters
to HNW individuals,
entrepreneurs and wealthy
families in Asia
People
A genuine entrepreneurial
spirit and strong flexibility
with clients interest at
the centre
An experienced
management team in Zurich
to build on a track record
of service excellence and
flexibility throughout the
international franchise
Much greater importance
on relationship quality
than quantity, with each
RM in Asia only managing a
select group of clientele to
ensure personal dedication
and highly-customised
financial solutions
Sustainable growth
Organic expansion and
strategic focus on select
and emerging markets
(Switzerland, Eastern
Europe, GCC and South-
east Asia
A solution-driven approach
breeds core offerings in
Asia of portfolio and asset
management, advisory and
client lending
From a regional hub in
Singapore, growth plans
are focused on Indonesia,
Malaysia and Thailand
EVENT HIGHLIGHTS - ASIAN WEALTH MANAGEMENT FORUM 2016 - HONG KONG - FEBRUARY

Redefining business and

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

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

32 WEALTH MANAGEMENT IN ASIA 2016

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

Eleanor Wan Eli Bitan Eric Lu Freeman Tsang Gaurav Kumar

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

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 33

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

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

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

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

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

34 WEALTH MANAGEMENT IN ASIA 2016

 Your Access to
Emerging Markets Opportunities
Zurich | London | Abu Dhabi | Dubai | Singapore
FEATURE ARTICLE
Will private banking in Asia
thrive or wither?
As consolidation gathers pace and polarisiation within this segment continues in the face
of rising costs and thin margins, how should private banks adapt to thrive?
range of products, services
Some of the recent global AUM figures
for private banks highlights the extent
of the challenges that many of these
institutions face.
Research released by Scorpio Partner-
ship in mid-July 2016, for example,
highlighted the challenges that the
worlds biggest firms face in achieving
growth. Most institutions showed a
36 WEALTH MANAGEMENT IN ASIA 2016
International banks tend
to offer access to a wider
and expertise that UHNW
clients are more likely to
benefit from.
BERNARD RENNELL
HSBC Private Bank
notable slowdown in AUM and a
squeeze on operating margins with
market conditions and hesitant clients
also suggesting tough times ahead.
Against this backdrop, UBS kept its place
at the top of the Scorpio Partnership
global ranking of the 25 largest wealth
managers, with more than USD1.73 tril-
lion in AUM, followed by Bank of America
Merrill Lynch which, at USD1.44 trillion,
was marginally ahead of Morgan Stanley.
There is then a big gap to Credit Suisse
in fourth place with USD687 billion in
AUM, followed (in this order) by RBC,
Citi, JP Morgan, Goldman Sachs, BNP
Paribas and Deutsche Bank to round out
the top 10.
Even the average rise in net new asset
growth of 33% on last years figures
could not compensate for the lower
values of client assets, the study found.
Asian private banking, on the whole,
also reflects the difficulties in making
the model work. Plus, Recent exits/
sanctions in the Asian region Barclays,
BSI, Societe Generale, to name just a
few show that the landscape is getting
more competitive.
Private banks are also realising that
although wealth in Asia is growing as
advertised, accessing this wealth is not
as easy as they think.
The best of both worlds

Personal attention, customized

advice, tailor-made portfolios

Independent asset manager

operating without any
conflict of interest

European and Asian expertise

HP Wealth Management (S) Pte Ltd

137 Telok Ayer Street #08-05

Singapore 068 602

Tel. + 65 6603 9790

www.hpwm.sg

Urs Brutsch
Assets are with Managing Partner & Founder
custodian of your choice
Michael Foo
CIO & Partner

Stephane Schmid
Partner

A subsidiary of Horus Partners Wealth Management Group SA, Geneva

FEATURE ARTICLE

ment providers to increase their share

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

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

KEY PERFORMANCE INDICATORS FOR THE GLOBAL WEALTH MANAGEMENT INDUSTRY

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

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

38 WEALTH MANAGEMENT IN ASIA 2016

 LETS SIMPLIFY THINGS.

Personal Wealth Management for the New Millennium

www.caidaowealth.com
FEATURE ARTICLE

dealer-oriented services; having quali-

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

There will be further industry econo-

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

This also shows the importance of what

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

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

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

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

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

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

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

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

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

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

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

manager at SEB Private Banking in Sin-

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

In line with this, clients are now looking

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

It is less transaction focused and more

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

40 WEALTH MANAGEMENT IN ASIA 2016

FEATURE ARTICLE
Clients also increasingly expect to play
a more active role in managing their
portfolios. As a result, clear and full
accountability in advisory services and
execution is important.
Standardised product offerings are no
longer sufficient to compete, says
Chen. Clients expect banks to be able
to provide wealth solutions beyond the
investment portfolio, for example, M&A
advisory, corporate finance and other
investment banking solutions. They also
expect transparency in fees, potential
returns on investments as well as tai-
lored advice.
Private banks should also rise to the
independent asset management (IAM)
challenge. According to Thusitha de
Silva, director at Cerulli Associates, they
can provide opportunities for opening
up alternative revenue streams. Instead
of looking at IAMs as a threat, private
banks should cooperate to form an
ecosystem where [everyone] can mutu-
ally benefit, he explains. We see this
happening to some extent in Singapore.
More generally, in a falling fee environ-
ment and as investors become more
savvy, he says private banks should also
42 WEALTH MANAGEMENT IN ASIA 2016
There will be further
industry economies of
scale via consolidation.
ALVIN MA
EFG Bank
be searching for new ideas to diversify
their client base, tap potential in un-
tapped markets, enhance accessibility
to services through digital tools, focus
on value-added advice and, at the same
time, have a strong risk management
framework for clients as well as product
due diligence.
Further, beyond access to the latest
products or new ideas, ever-more im-
portant to clients is receiving relevant
guidance and timely advice. They ap-
preciate that we can help them achieve
their objectives with a holistic and
Following the tide of
digital banking, private
banks have to build up
digital platforms for
communication, execution
and client servicing.
ALAN LUK
Hang Seng Bank
long-term plan, explains Brogle. Trust
is also key. Many clients have multiple
private banking relationships.
However, she adds, we are seeing a
gradual shift to consolidating their
assets with fewer relationships. They
prefer to go with banks they can trust
and who offer them the best value
proposition to suit their needs.
Asian wealth managers also need to
differentiate between the needs of the
newer millionaires and those who have
held their wealth for longer periods.
China is where most new millionaires are
found; whereas other countries will com-
paratively have more second- or third-
generation wealth. The latter will be open
to discretionary services, while the former
should be approached with advisory so-
lutions first, says Van de Walle.
In addition, adds Michael Blake, chief
executive officer, private banking, Asia
at UBP, there is growing internation-
alisation of Chinese wealth.
The business has reached greater ma-
turity a decade on, he explains, and
Chinese families are much more open
Swaen Capital Pte.Ltd.
No 8 Eu Tong Sen Street
#19-89 The Central
Singapore 059818
Tel: (65) 3109 1932
Email: clientservice@swaencapital.com
FEATURE ARTICLE
to traditional wealth management ser-
vices than they were before. The other
big change is a greater openness to
diversification and a desire for an inter-
national footprint that wasnt relevant
to a lot of people before.
INVESTING IN INFRASTRUCTURE
Other than a comprehensive suite of
products and range of solutions, having
the right infrastructure and people has
hence become essential for private
banks to succeed.
At Bank of Singapore, for example,
Van de Walle says technology has
become important in the quest for
operational efficiency, to be able
manage costs, mitigate risks and give
more value to clients. We are invest-
ing in cybersecurity, data manage-
ment, data analytics and surveillance.
For advisory, we are investing in port-
folio analytics so that we can advise
clients in a timelier manner, with more
details in terms of performance at-
tribution and risk management.
The goal, he explains, is to enable
private bankers to provide data for
clients who want it, anytime, anywhere
and on any device.
According to Chen, fintech will change
the way private banks do business.
They are in competition with non-
banks in offering multi-channel and
digital models which offer transparency
and speed in execution, she explains.
The mobility of services and informa-
tion will change clients behaviour to
become more self-directed, and the
relationship managers relevance in an
advisory role will be challenged.
Aggress Alan Luk, head of private
banking and trust services at Hang Seng
Bank: Following the tide of digital
44 WEALTH MANAGEMENT IN ASIA 2016
Chinese families are
much more open to
traditional wealth
management services
than they were before.
MICHAEL BLAKE
UBP
banking, private banks have to build up
digital platforms for communication,
execution and client servicing.
Yet having this technology and infra-
structure is not the end-goal in itself.
The rapid advancement of financial
technology has prompted numerous
discussions about whether the machine
can replace the banker, says Van de
Walle. My answer to this question is,
until the machine can sense a human
beings exuberance or fears, not yet.
Indeed, understanding clients needs
will always remain paramount to the
business of private banking. Getting
to really know a client and understand-
ing their subtle needs is something
technology cannot do, he adds. I
believe humans require humans to in-
teract with in the field of investments.
As a result, recruiting the right talent
continues to be the key for growth for
all private banks.
Indeed, explains Chen, intelligent,
technical and finance savvy advisers
will be imperative as markets become
more complicated.
CONSISTENCY AND CULTURE
Regardless of size and style of offering,
to Ronald Lee, co-head of private wealth
management at Goldman Sachs in Asia
ex-Japan, says it is impossible to over-
estimate the value of having a consis-
tent strategy. Another factor that leads
to success is being true to your culture.
He added that it is key for firms to have
a differentiated offering, given that
clients in Asia are bombarded for choice.
This is perhaps even more important in
an environment where there are clearly
more challenges ahead.
These include more competition from
non-financial companies that are pro-
viding alternatives to private banking
services, such as IAMs.
Against this backdrop, private banks
have to figure out their strategies and
positioning, says de Silva, as more
sophisticated aspects of wealth man-
agement like asset selection, alloca-
tion and rebalancing of portfolios
become automated and available to
a wider wealth spectrum of investors
at lower cost.
 WEALTH PLANNING

You know where to go.

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

Nordea Bank S.A, Singapore Branch is part of Nordea Group, the leading financial services group in the Nordic and Baltic Sea regions. Some products and services may, due to local regulations, not
be available to individuals resident in certain countries and their availability may depend, among other things, on the investment risk profile of persons in receipt of this publication or on any legislation
to which they are subject. Nothing in this publication should be construed as an offer, or the solicitation of an offer, to purchase, subscribe to or sell any investment or product, or to engage in any other
transaction or provide any kind of financial or banking service in any jurisdiction where Nordea Bank S.A., Singapore Branch or any of its affiliates do not have the necessary license. Published by
Nordea Bank S.A., R.C.S. Luxembourg No. B 14.157 on behalf of Nordea Bank S.A. Singapore Branch, 138 Market Street, #09-03 CapitaGreen, Singapore 048946. www.nordeaprivatebanking.com
subject to the supervision of the Monetary Authority of Singapore (www.mas.gov.sg).
EXPERT INSIGHTS
Why private banks will
live or die on innovation
BNP Paribas Wealth Management has carved out billionaires as a strategic growth
segment, says Mignonne Cheng, explaining that this is an industry where being
innovative and providing real solutions will be the difference between success and failure.
Despite the many challenges facing
private banks in Asia, recent signs
suggest this is an industry that continues
to thrive.
A quick look at the latest World Wealth
Report from CapGemini, for example,
support this. It shows the pace and
volume of growth, with Asia Pacific ex-
ceeding North America for the first time.
The spotlight on compliance and gov-
ernance is a crucial factor too. The
high bar for capital requirement, the
increased transparency and greater
scrutiny from regulators, and the
prudent approach of private banks to
business management, will provide
clients with a stronger sense of safety
and trust, says Mignonne Cheng,
chairman and chief executive officer
for BNP Paribas Wealth Management
in Asia Pacific.
Yet at the same time, Chengs bright
outlook for private banking in the region
46 WEALTH MANAGEMENT IN ASIA 2016
is balanced with the fact she also knows
the status quo faces imminent change.
I believe consolidation of the industry
is likely to continue, as private banks
need to achieve scale and efficiency,
she explains.
And as someone who has been active in
the regions financial markets for well
over three decades, she is well-placed
to judge the likely evolution in the look-
and-feel of the marketplace.
STAYING AHEAD
The way for private banks to ensure
success amid todays challenging envi- MIGNONNE CHENG
BNP Paribas Wealth Management
ronment will be to work hard at innova-
tion. This is in order to maintain rele-
vance and better serve clients
ever-changing needs, says Cheng.
In particular, she explains, when touch, highly-tailored, holistic yet
dealing with UHNW families, there is trustworthy personal services of hand-
no other type of offering which can picked, rigorously-selected and
provide the same combination of high- trained private bankers.

Identifying the next
entrepreneur
Another sign of the innovative
nature of BNP Paribas Wealth
Management was its 2016
BNP Paribas Global
Entrepreneur Report.
The survey revealed the
emergence of a new generation
of entrepreneurs under 35
years old.
Dubbed the Millennipreneurs,
these are business starters from
Generation Y, born between
1980 and 1995, also known
as Millennials.
Their approach to business, in
terms of their ambitions, results
and leadership style, differs
from that of other generations.
For example, they create
more companies, with larger
headcounts and higher
target profits.
They are also generally
interested in the new economy,
but are equally active in many
traditional sectors including
retail and professional services
such as law and accounting.
The report was based on a
survey conducted by Scorpio
Partnership, analysing the
behaviour of roughly 2,600
HNW and UHNW entrepreneurs
across 18 markets in Asia,
North America and Europe, with
aggregate wealth of over
USD17 billion.
Private bankers, as the last bastion of
trust, must also maintain an enhanced
awareness of their clients interest and
protection, explains Cheng.
They must consistently present the
right ideas to clients, seriously taking
into account the relevant risk profiles
of those clients.
SERVING THE MEGA WEALTHY
IN ASIA
This is perhaps most relevant for the
ultra wealthy, which is an increasingly
important target segment for BNP
Paribas Wealth Management.
In line with this, the bank is rolling out
a new initiative, Mega Wealth, to focus
on the wealthiest individuals.
This follows on from the success that
the private bank has found over the last
few years in on-boarding billionaire
clients. Indeed, it has reached a penetra-
tion rate of 17% in Asia, and close to
50% in Hong Kong.
This client segment calls for a holistic
banking approach, integrating invest-
ment banking and wealth management
solutions, says Cheng.
The billionaire segment is our strategic growth lever.
BNP Paribas Wealth Management is gearing
up its value proposition to this segment,
in order to remain as the preferred partner to this
increasingly-important population of clients.
For example, this demands specific
credit solutions as well as private invest-
ment opportunities as two of the key
drivers of the initiative. The billionaire
segment is our strategic growth lever,
adds Cheng.
Supporting wealthy
women
As part of its continued
approach to clear segmentation,
for the second year, BNP
Paribas Wealth Management
brought together (in July 2016)
around 30 women who lead
international fast-growing
businesses in 12 countries
across Europe, the US, the
Middle East and Asia, from
which there has been strong
participation both times.
This exclusive Women
Entrepreneur Programme
aimed to provide participants
with a programme specifically
geared to the real issues facing
entrepreneurs, along with the
opportunity to network and
discuss their views on growth,
innovation and leadership.
The customised training
programme was designed by
Stanford University.
BNP Paribas Wealth Management is
gearing up its value proposition to this
segment, in order to remain as the pre-
ferred partner to this increasingly-
important population of clients, she
explains.
WEALTH MANAGEMENT IN ASIA 2016 47
EXPERT INSIGHTS

Maybank keeps focus on

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

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

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

newer, smaller location. he explains.

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

48 WEALTH MANAGEMENT IN ASIA 2016

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

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

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

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

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

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

Website: http://www.ttg.com.hk/
Email: info@ttg.com.hk
Tel: +(852) 2869 0801 Fax: +(852) 2523 4610
EXPERT INSIGHTS
TAKING ADVANTAGE
While on one hand the timing for expan-
sion might not seem ideal given the
wider market environment, there will
always be challenges and questions over
the right time.
The Asian private banking industry, for
example, is characterised by high costs
in terms of regulation and the general
running of the business.
Indeed, this has been a factor over the
past 12 to 24 months in many European
private banks, in particular, reviewing
the extent and scope of their operations
in Asia.
The private wealth industry has to be
very careful not to let costs escalate to
the point where they cannot sustain or provide
the required level of service or solutions.
The private wealth industry has to be
very careful not to let costs escalate to
the point where they cannot sustain or
provide the required level of service or
solutions, says Lee.
He is also aware of the need to be more
creative in how and where he looks for
new talent to bring on board.
And he sees a big opportunity to hire
corporate and investment bankers into
a private banking role.
There is a lot of re-tooling and training
needed to do this, but this shows that
there are potentially other areas to tap.
50 WEALTH MANAGEMENT IN ASIA 2016
PERKS OF BEING FRESH
Starting a private wealth proposition
from scratch has also enabled Lee to
benefit from the advantage of not having
to deal with a lot of the legacy systems
and processes which weigh down some
of his peers.
He also applies this type of thinking to
implementing his plans for aiming to do
more digitally.
Yet it is still early days. So, for the time
being, he says he is looking to leverage
on the other parts of the Maybank
group, such as the Kim Eng securities
venture and the retail bank.
Ultimately, he wants to continue to
focus for the time being on those client
leads which are what Lee calls warm.
The conversion rate so far has been
around 65%.
In another two to three years time, he
wants to have between 6,000 to 7,000
private wealth clients the rationale
being, that if each of them has, on
average, between USD2 million and
USD5 million with Maybank, then Lee
can look to roughly USD20 billion in
AUM. This is what he believes is the
minimum critical mass to work with in
todays market.
Getting the ball rolling
The birth of the private wealth
component of the Community
Financial Services (CFS) business
at Maybank, essentially meant
the creation of a new unit.
The bank realised the potential
to access a ready-made
customer pool through a more
dedicated offering. This could
also help it generate new income
streams and meet growing
demand from customers for a
broader service.
In Malaysia, for example,
Maybank has more than 12
million customers, and is the
largest bank with No.1 overall
market share in consumer loans,
retail deposits, unit trusts, loans,
retail fixed deposits and CASA.
The group also has a presence in
all 10 ASEAN countries.
Lee was then hired to take
charge of the private wealth
business and harvest what
the bank saw as a segment
which was rightfully already
its own. And it took a logical
step by basing the team out of
Singapore. This enables it to
service a combination of local
clients as well as use its offshore
desk to cater to clients based
overseas but who want to bank
in Singapore.
The view was that in the
medium term it could be a
source of liquidity, and in the
longer term, one of profitability.
Even though it was decided to
position the private wealth arm
within the consumer bank, the
strong collaborative culture in
the group ensured it is closely
linked to the corporate and
investment banking divisions.
FIRM PROFILE
How HSBC is pursuing its
desired private banking model
HSBC Private Bank took some bold decisions a few years ago to redefine its risk appetite.
With a clearer sense of the type of business it wanted to do, and with whom, this mandate
had allowed Sandeep Sharma, its head of South-east Asia, the opportunity to position the
business for growth.
The first half of 2016 has been a tough
time for all private banks.
The generally-unfavourable investment
environment due to the volatility and
uncertainty has resulted in lower bro-
kerage and trading activities, worldwide.
This has highlighted the importance of
business models built on more in-depth,
needs-based conversations with clients,
stemming from a deeper understanding
of their needs and goals.
For HSBC Private Bank, this is exactly
the direction it has been heading.
We have defined our strategy as being
the preferred private bank for clients
of the wider group, says Sandeep
Sharma, head of global private banking,
South-east Asia at HSBC Private Bank.
This includes servicing its commercial
banking customers, to meet their per-
sonal wealth needs.
52 WEALTH MANAGEMENT IN ASIA 2016
Everything we have done in recent
years is based on pursuing that vision,
explains Sharma.
AHEAD OF THE CURVE
The strategy review that the bank did a
few years ago was important in enabling
it to define its risk appetite.
For example, it defined the markets in
which it wants to grow, resulting in a
consolidation leading to it operating
today in key growth markets where the
bank has a well-established HSBC
Group presence.
It also combed through its client book SANDEEP SHARMA
to ensure that it banks with only the HSBC Private Bank
right kind of clients, where they are com-
mitted to being compliant with its tax
transparency requirements and efforts
to combat financial crime risk.
private banking industry will become
In Sharmas view, this was a forward- uniform. Ultimately, a banks platform
thinking move. Over the next five years, and proposition will define its success,
I think the risk appetite for the whole not only its ability to arbitrage risk.
 Hong Kong

BVI
Singapore

Asian Focus,
Global Solutions

Asias Leading Trust and Corporate Services Firm

Singapore Hong Kong BVI

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

www.heritagetg.com
FIRM PROFILE
In terms of segmentation, although
HSBC Private Banks minimum invest-
ible assets for new client is USD5
million, given its focus is on serving the
private wealth needs of HSBCs com-
mercial banking clients, it has intro-
duced a Private Wealth Entrepreneur
(PWE) programme.
PWE is an incubator proposition offered
to HSBC Commercial Banking clients
who are on course to building busi-
nesses and, as such, expected to create
wealth in the coming years. Essentially,
these clients get to enjoy HSBCs private
banking solutions and services even if
they might not meet the minimum in-
vestible assets.
From Sharmas perspective, the upshot
of this re-positioning has created capac-
ity for the team to grow its business in
South-east Asia, by effectively tapping
into the rising affluence in ASEAN.
For example, in the 2016 Boston Con-
sulting Global Wealth report, Asia
Pacific (ex Japan) is expected to hold
a projected USD60 trillion of wealth
in 2020.
It is also likely to surpass Western
Europe as the second wealthiest region
in 2017. The report also highlighted that
Asia Pacific (ex Japan) is projected to
hold 27% of global wealth in 2020 and
its growth is largely driven through
creation of new wealth.
THE BANK OF CHOICE
The HSBC Private Bank mission is to
leverage its existing client base as part
of the broader Group.
This is based on the viewpoint that more
and more clients are looking to work
with one bank for all their corporate and
private banking needs.
54 WEALTH MANAGEMENT IN ASIA 2016
We see numerous cases where clients
have a requirement for their business
at short notice. If they have an existing
relationship with the private banking
division, it gives more confidence to
the commercial banking team to turn
around a solution very quickly, ex-
plains Sharma.
This works the other way round too.
For the banks commercial banking
clients, given that much is known about
them and their business, it is much
easier for the private banking business
to consider the individual as a client by
already having background on their
business and how theyve accumulated
their wealth. Clients prefer to deal with
banks which know all aspects of their
business and their family, he adds.
ADDING CAPACITY
Sharma is certainly not complacent.
We now need to add capacity.
There are various approaches that the
bank is taking. One of them is to create
greater efficiency and improve produc-
tivity by ensuring its employees have
the necessary training and resources
to reach his or her potential.
The bank is also selectively recruiting,
especially for seasoned relationship
managers (RMs), product specialists
and middle-office personnel to better
tap into potential opportunities that
lie within its commercial, corporate and
retail banking divisions.We have a lot
of untapped potential internally, explains
Sharma. Last year, net new money glob-
ally was largely driven by internal col-
laboration. I dont think we are even close
to mining half of these untapped internal
opportunities.
As Asias wealth grows so will the
demand for the transfer of inter-gen-
HSBCs Private Wealth
Entrepreneurs Proposition
This was introduced globally
in 2014 to provide access for
existing commercial banking
clients to private wealth
solutions and advisory.
It is offered to HSBC Corporate
and Business Bankings most
valued and high-potential clients
that are on the path to creating
their personal wealth through
their businesses.
The bank adopted a team-
based service model, whereby
a dedicated team comprises an
RM, relationship executive and
wealth adviser, to provide these
clients with wealth advisory and
investments solutions.
erational wealth, he adds. Given that
HSBC has one of the largest corporate
banking portfolios globally, we will
benefit greatly if we are able to hone
in on our collaboration framework with
other group businesses and offer Asia
business owners with a comprehensive
suite of private wealth solutions.
Yet size is less important compared
with client satisfaction and the speed
of providing relevant solutions.
It also needs to be about more than just
bringing in people in order to just bulk
up the numbers. Sharma is looking
instead for RMs who believe in the
banks risk appetite and why it has
changed. It doesnt want to populate
its private banking business with indi-
viduals still of the mind-set where they
believe they need to be everything to
every client.
 Integrating your
business objective
with ours
We believe that your business success is our success. We
work with you through every phase of your business and
care for your results as a trusted partner and adviser as
though we are a part of your business.

International & Domestic Tax

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

20 YEARS IN PRACTICE
SINGAPORE | HONGKONG | iyerpractice.com
EVENT HIGHLIGHTS - INDEPENDENT WEALTH MANAGEMENT FORUM 2016 - MARCH
Independent firms can grab more
AUM, but growth hurdles remain
Sentiment among participants at Hubbis annual get-together for the independent wealth
community in Singapore in March showed the optimism for this industry segment to
become more prominent but only if it can engender enough client trust in the model
and lure more competent advisers from private banks.
Increasing awareness among HNW and
UHNW clients of the added benefits of
an independent adviser especially
during market distress is a key factor
driving optimism among practitioners
that this segment can control more
client assets and wield more influence
amid an increasingly polarising land-
scape within Asian wealth management.
Independent asset managers (IAMs) and
multi-family offices (MFOs) stand to
benefit from a mix of dynamics playing
out at the moment: growing client wari-
ness and skepticism about the service
and performance they get from their
private banks; a search by clients within
the current financial market turbulence
for models offering disruptive innova-
tion combined with greater flexibility
via a more tailored and relevant service;
a desire for genuine independent guid-
ance to manage market volatility and
56 WEALTH MANAGEMENT IN ASIA 2016
uncertainty; and the growing appeal of
access to alternatives not present within
Thank you to our sponsors
many bank offerings.
Asia Cornerstone
At present, less than 5% of private Leonteq Securities
wealth AUM in Asia is overseen or Pershing
Henley & Partners
managed by independent firms. But in
Heritage Trust Group
3 years time, two-thirds of speakers
IRESS
and delegates from IAMs, MFOs, Principal Global Investors
other independent firms, and some Allocated Bullion Solutions
private bankers predicted that AXA
between 10% and 20% of this AUM will EFA Group
Expersoft Systems
be with firms such as IAMs and MFOs.
J O Hambro Capital
Management
The main opportunities for these firms Pictet
were considered to be: capitalising on Swiss Asia
their flexibility; capturing clients unhappy Iyer Practice Advisers
with the service and performance from Thomson Reuters
Tikehau Investment
private banks; hiring private bankers and
Management
advisers disgruntled with higher compli-
VP Bank
ance scrutiny; consolidated and com-
prehensive and unconflicted service;
and flexible product range.
Yet, the hard work is by no means over.
And a number of hurdles remain. The
top five challenges included: the compli-
ance burden and keeping up with
change; acquiring clients and convinc-
ing them its worth paying a fee; being
able to attract enough talent (pay, com-
mitment, prospects, etc); bank plat-
forms DDC process; and raising suffi-
cient AUM for economic viability.
Angelo Venardos Anthonia Hui Federico Donato Filippo Fabbris Liam Collins
Heritage Trust Group AL Wealth Partners FFA Asia Oclaner Asset Management PwC

Rashmi Lodha Stirling R Larkin Khing Go Leonardo Drago Olivier Destandau

Amicorp Larkin Group Marc Faber Group AL Wealth Partners EightStone

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 57

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

It is good to see this forum is growing

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

58 WEALTH MANAGEMENT IN ASIA 2016

 INTERNATIONAL ASSETS
TAX EFFICIENT STRUCTURING

Photo archideaphoto - Fotolia.com

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

HONG KONG
SINGAPORE
MONACO
BVI
Contact: Peter Brigham
Email : p.brigham@rosemont.hk
www.rosemont-int.com
FIRM PROFILE
Focusing on what youre good at
As the fifth generation of the founders of Bordier & Cie, Evrard Bordier has a unique
perspective. And he is looking beyond shorter-term industry pressures to build a genuine
relationship-driven offering that dispels the myth that scale is critical for survival.
Evrard Bordier straddles two overlap-
ping worlds: on one hand, he runs a
private bank, trying to give his clients
the best service he can; on the other,
he is the fifth-generation of a success-
ful family business.
He balances the two as managing
partner of Bordier & Cie a 170-plus
year old independent, international
private bank.
This also gives him a perspective where
he can be pioneering in terms of devis-
ing a new strategy to stay relevant and
profitable as a boutique player in
todays environment.
We have gone past the point in this
industry where it is viable to run a small
business, says Bordier. It is no longer
enough for the middle and back office
to keep pace with the scale of opera-
tions. Banks today need enough infra-
structure to build the equivalent of a
20-storey building, regardless of size.
60 WEALTH MANAGEMENT IN ASIA 2016
ADAPTING TO THE MARKET
The first half of 2016 has been transfor-
mative for Bordier & Cie in many ways.
From a reputational and regulatory
adherence point of view, the private
bank has a clean bill of health, and this
is credited to the robustness of its op-
erational infrastructure.
Yet Bordier acknowledges the need to
regularly review the banks overall busi-
ness strategy, especially against the
backdrop of the regulatory, margin and
other pressures he shares with his peers.
This is always a potential consideration,
but what motivates me is the responsi- EVRARD BORDIER
bility I feel to my ancestors to build the Bordier & Cie
best business we can, and one which will
stand the test of time, he explains.
He is also in quite a unique position
insofar as he is able to look beyond the His relatively small scale also alleviates
short-term pressures of revenue targets the need to rely on hiring hoards of new
that might influence the strategy of bankers. Instead, he has the potential
many publicly-held institutions. to be opportunistic.
FIRM PROFILE
Plus, it is arguably too difficult to extract
the most successful relationship manag-
ers today, anyway.
They tend to be financially-tied to their
institutions, plus banks themselves have
become a lot more effective at retaining
client assets, even when their top
bankers leave.
The Bordier & Cie approach, therefore,
is to have more of a business develop-
ment team. We try to go systemati-
cally through a particular country, one
at a time. We are redefining how we
approach the market, he says.
We dont need to be good at everything, but only in one
or two specific areas which clients will come to us for.
DELIVERING VALUE
Going against the trend of standardi-
sation, Bordier says he wants to
provide a more tailored set of solu-
tions and services.
We want to be known in the market as
the best boutique bank, but with an of-
fering which is genuinely different, he
adds. We dont need to be good at ev-
erything, but only in one or two specific
areas which clients will come to us for.
However, this must involve more than
just marketing talk, and in its place be
genuinely transformative in terms of
the banks approach to how it adds value
to its clients.
Our relatively small size also means we
are able to cater to clients specific needs
62 WEALTH MANAGEMENT IN ASIA 2016
that go beyond just managing their port-
folios, adds Bordier. We take pride in
executing a uniquely tailored touchpoint
strategy for each of our clients to bring
the Bordier experience to life.
These strategic brand touchpoints adapt
to clients individual needs and lifestyle
preferences. Enhancing the ambit of
our client servicing is an essential
element to deepening our clients trust
in us, he explains.
In line with this, the firm is building its
repertoire of services that anticipate
the need for a more involved wealth
management approach. We think this
is something we can continue to excel
in as long as we play to our boutique
strengths, says Bordier.
In his mind, this needs to go beyond
simply talking about protecting, preserv-
ing and passing wealth on to the next
generation. Clients hear this from every
private bank, and nobody stands out.
As a result, he says clients often get
badly serviced, regardless of which bank
they have an account with.
By contrast, Bordier is proud that the
bank has retained what it calls its human
dimension. This starts by having a frank
and more realistic conversation with a
client about why they even want a bank
account in the first place.
Profit by partnerships
In trying to do things differently
to its competitors, and at the
same time play to the banks
strengths, Bordier believes in
partnerships as a key way to
secure new client assets and
grow profits in Asia, and without
raising fixed costs.
This is important to being able
to weather the expected trend
towards more onshore wealth
management going forward.
This poses a challenge to
boutiques like us, says Bordier.
Our model will never be geared
up towards having licences in
local markets.
So to capture onshore revenue
while remaining offshore, he
sees alliances as the main
avenue. The bank can charge for
sharing specialist knowledge
and training with institutions
which are building their private
banking offering. In return, it
hopes to be introduced to clients
who wish to bank in Singapore.
In finding the right model, as every bank
tries to pool its qualities, Bordier has
opted for the relationship-based ap-
proach, not a performance one. We are
taking the right decision in moving this
way, and charging a fee for that.
Likewise, the firm looks for clients who
fit its business model and philosophy.
Those who are willing to pay a premium
for proficient private banking are aware
of what our advisory fee entails, says
Bordier. Our ideal client values the work
we do for them and is willing to pay what
we are worth for doing it.
FIRM PROFILE
Bank Vontobel eyes Asia with
offering of global access
Bank Vontobel is bullish on private banking in Asia despite the intense competition in
the region which has compressed margins. Georg Schubiger says the firms boutique
strategy allows a unique offering to HNW clients.
Being focused and targeted is a good
thing in the Asian private banking in-
dustry today.
In an increasingly-tough environment
to even try to be all-things-to-all-peo-
ple, downsizing, mergers, acquisitions
and exits have started to happen more
and more frequently.
But there is always scope for banks to
develop businesses where they offer
clients something they really need.
For Bank Vontobel, it is clear that the
firm looks for differentiation rather than
scale. We have a boutique strategy
that focuses on clients who want to
diversify part of their assets internation-
ally across jurisdictions, asset classes
and currencies, says Georg Schubiger,
member of the group executive board
and head of private banking globally.
With a very lean set-up in Asia to offer
these services, the firm has taken the
64 WEALTH MANAGEMENT IN ASIA 2016
decision to basically operate as a wealth
adviser to clients in the region, and book
their assets in Switzerland.
Such a narrow focus, it is becoming more
and more relevant due to a combination
of market developments, as well as what
the bank believes entrepreneurs and
wealthy families are increasingly looking
for, explains Schubiger.
GROWTH AMBITION
As of 30 June 2016, Vontobel as a group
grew its net profit by 8% to CHF105.7
million based on strong growth in new
money of 7%, enabling advised client
assets to reach a new level of CHF179.3 GEORG SCHUBIGER
billion (USD151.8 billion). Bank Vontobel
More specifically, in its wealth manage-
ment division, it was able to increase its
advised client assets to a new record
level of CHF43.3 billion. This was due However, investments in the recruit-
to organic growth and the acquisition of ment of additional client advisers, the
Finter Bank thus achieving above- number of whom increased by 18% over
average growth compared with its peers. the last 12 months had an impact on
FIRM PROFILE
the overall positive result. At CHF34.2
million, pre-tax profit in wealth manage-
ment was higher than it was in the
previous year.
Yet the strong growth in the wealth and
asset management businesses over the
last year resulted in significantly higher net
fee and commission income, representing
66% of Vontobels operating income.
In Asia, plans are afoot to increase the
impact of the region to the banks
Our ideal RM is somebody who understands the
investment world from a global diversified standpoint.
bottom-line. For example, it has a
publicly-stated aim to place a focus on
emerging markets in Asia Pacific, to
strive to at least double its current busi-
ness volume in the region by 2020.
In line with this vision, the target for
AUM in Asia (in wealth management)
is to grow it by at least double over the
course of the next four years. Key to
this for Bank Vontobel is emphasising
its boutique strategy, which seeks to
avoid having cost-intensive local
booking centres.
RELEVANT SOLUTIONS
As this family-owned firm continues to
try to distinguish its solutions for HNW
clients, it puts value in being able to
benefit from its investment banking and
asset management arms.
In the case of investment banking, an
important focus is the Deritrade plat-
66 WEALTH MANAGEMENT IN ASIA 2016
form, where structured products of
various providers are traded; these are
also offered to private clients.
In terms of asset management, mean-
while, some of Vontobels equity funds
have posted above-average perfor-
mance in recent years under US fund
manager Rajiv Jain.
The bank can also offer a globally-di-
versified, tailor-made portfolio to clients
with USD3 million in AUM and up.
In line with this, Schubiger says Bank
Vontobel is more focused on bringing
on board advisers and wealth managers
who understand the clients they serve.
Our ideal relationship manager (RM) is
somebody who understands the invest-
ment world from a global diversified
standpoint, he explains. He or she
needs to have a broader view on the one
hand, but also understand how entre-
preneurs think. This enables them to get
a tailor-made service that takes into
consideration the entrepreneurs needs
in wealth planning and preservation.
DIGITAL DIMENSION
Using technology to reach across borders
easier and quicker is a further important
component of Schubigers strategy.
Although the bank doesnt believe that
a digital interface can replace the face-
to-face interaction with an RM, technol-
ogy has allowed it to export its ser-
Asian footprint expanding
While many Swiss private banks
run their Asian operations from
Singapore, Bank Vontobel has
chosen Hong Kong in which
to base its roughly 20-strong
private banking unit.
In early 2016, the firm boosted
its firepower on the relationship
management side, selectively
bringing in individuals with
the experience required to
implement Schubigers strategy.
For example, it hired Christine
Chen and Joannes Ho in March
and April respectively, both
from CTBC Bank, as senior
relationship managers in
newly-created roles.
As of June 2016, a new team
of experienced private banking
advisers has been in place in
Zurich, hired specifically to cater
to wealthy clients who
are domiciled in Australia.
vices and products from Switzerland to
Vontobels focus markets world-wide.
Also, in late 2015, it launched a secure
mobile private banking app. This pro-
vides HNW clients in China and Hong
Kong with around-the-clock access to
their portfolio and wealth management
services using smartphone and tablet
devices. Plus, it enables them to trade
and speak live to their RM through
encrypted instant messaging.
While Schubiger acknowledges the
importance of Bank Vontobel being at
the forefront of the digital revolution,
however, it must also distinguish what
will translate into an industry standard,
and what will fall by the wayside.
 BRITISH AND MALAYAN TRUSTEES LIMITED

Fiduciary Services for Families &

Financial Institutions since 1924

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

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

Mapping out the future for

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

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

68 WEALTH MANAGEMENT IN ASIA 2016

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

Arthur Wu Bassam Salem Bruno de Pampelonne Evrard Bordier Febby Avianto

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

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 69

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

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

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

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

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

70 WEALTH MANAGEMENT IN ASIA 2016

 SEALED WITH
TRUST

A HERITAGE
OF TRUST

At Asiaciti Trust, we understand the importance of delivering reliable, discreet, personalised

service. Place your trust in our 44 year record of adding long term value to clients wealth
preservation strategies. We are committed to serving the best interests of our clients, protecting
their assets and building a legacy for their families. Asiaciti Trust, a heritage of trust.

Trustee & Fiduciary Services International Tax Planning Wealth Protection Estate & Succession Planning Fund Administration International Company Services

Asiaciti Trust Singapore Pte Ltd

163 Penang Road, #02-03 Winsland House II, Singapore 238463
Tel: (65) 6533 2611 Fax: (65) 6305 0180 Email: Singapore@asiacititrust.com

Cook Islands Dubai Hong Kong London Nevis New Zealand Panama Samoa Singapore
www.asiacititrust.com
EXPERT INSIGHTS
A need to be niche
To survive one of the most challenging periods private banking has ever faced, a more
focused and defined proposition is essential, says Brian Shegar of Emirates NBD.
A common concern among senior ex-
ecutives in wealth management is the
gloomy outlook for the industry in Asia.
They see it as one populated by increas-
ing challenges from the many regula-
tory obligations and compliance expec-
tations, in turn requiring significant
investments in people and systems.
With rising overheads from these and
efforts to tackle other business risks,
private banks need to rapidly find a way
to weather the storm.
According to Brian Shegar, head of Asia
Pacific for Emirates NBD, the right
proposition for many institutions
without existing scale or size in this
space is to focus on what they can do
best for their clients.
A niche strategy works best, he ex-
plains. Private banks shouldnt try to
do everything, or cover all markets.
They need to focus on their compara-
tive advantage.
72 WEALTH MANAGEMENT IN ASIA 2016
FACING UP TO CHANGE
Pressure is coming from multiple
sources. Clients, too, have become more
and more demanding. They expect finer
pricing and lower transaction costs,
says Shegar. These challenges are not
to be under-estimated.
Plus, a few clients have been able to
successfully sue their private banks, so
this places yet more emphasis for senior
management on risk management and
operational efficiency.
In terms of the competitive environ-
ment, Shegar is also wary of what he
calls the irreversible trend of fintechs. BRIAN SHEGAR
Some institutions are trying to meet Emirates NBD
this challenge through collaboration and
acquisition of fintechs. The banks which
are slow to adapt to this phenomena
could be bypassed in due course.
the private wealth management space
Despite the need that will always exist also suffering a certain amount of dis-
for bespoke, tailor-made private banking intermediation especially given the
services, he foresees the potential for threats that the banking industry is
EXPERT INSIGHTS
facing from robo-advisers and other
digital advice platforms.
SUSTAINABILITY IN QUESTION
Change is clearly underway within the
private banking industry in Asia.
Many banks have rationalised their busi-
nesses, either down-sizing in some loca-
tions, or pulling out of certain markets
altogether, or even selling their busi-
nesses entirely.
It was inevitable that a shake-up in this
industry would happen sooner rather
than later, says Shegar.
The cost-income dynamics have
become unattractive for many banks
not just their fixed costs, but also the
impact of getting caught out by making
mistakes, he explains.
The cost-income dynamics have become
unattractive for many banks not just
their fixed costs, but also the impact of
getting caught out by making mistakes.
As a result, to do well, he says manage-
ment must have a granular focus on
costs and revenues.
But the exit of some of the best-known
brands from private banking in Asia in
the last few years, has raised questions
about how any of the smaller players
can make it work.
In Shegars view, this plays to the
strengths of regional banks with the size
74 WEALTH MANAGEMENT IN ASIA 2016
and commitment to continue to build
out their wealth management offerings.
A CLEAR STRATEGY
From Shegars perspective, this all works
to the benefits of an institutions like
Emirates NBD.
We have a differentiated strategy in
Asia, which gives us a niche so that we
dont have to compete with other
private banks, he explains.
More specifically, the bank services the
growing pool of money that gets in-
vested offshore from the GCC.
While this has traditionally gone to
Switzerland, or London, particularly for
real estate investments, the bank is
increasingly seeing Singapore become
positioned as an attractive offshore
investment centre for GCC clients. This
is underpinned by Singapores world-
class infrastructure and capabilities for
execution and advice across all asset
classes under the well-respected super-
visory regime of the MAS.
The banks relationship managers in
Dubai also play an important role, he
adds. They try to help clients learn about
opportunities to service offshore
wealth, but still keeping it with the bank.
This is an evolution of Emirates NBDs
vision from the time of the opening of
its Singapore branch in late 2010. As
part of its strategy to play a pivotal role
in facilitating and catalysing trade and
investment flows between Singapore
and the Middle East, the bank aims to be
a gateway for providing private banking
services to Middle Eastern HNWIs
seeking to invest in Asia, and conversely
for Asian investors seeking investment
opportunities in the Middle East.
The Singapore branch also leverages
on the banks niche competence in
Shariah-compliant private banking and
asset management.
ADAPTING THE ADVICE
The challenge of making money in
todays environment requires banks to
focus on how they can better harvest
their clients to deepen and broaden
these relationships. For example, Asian
families are looking to further diversify,
protect and grow their wealth.
But with all jurisdictions under scrutiny,
some of the structures used in the past
are no longer viable. Plus, the potential
universe of clients in Asia is more limited
than before; any individuals which banks
now deem as questionable in terms of
source of wealth are untouchable.
There is a lot of Chinese wealth, but
the challenge would be meeting the
compliance requirements banks face
today in the onboarding process and
managing this money, says Shegar.
In general, wealthy Asian families also
need to understand the rising demands
of global regulators and the impact of
current and prospective regulatory
reporting requirements such as FATCA,
CRS, etc, he adds.
Planning for your
future together

With roots dating to 1828, Willis Towers Watson is a leading global

advisory, broking and solutions company that helps clients around
the world turn risk into a path for growth.

Our Global Wealth Solutions team are here to learn everything about
our clients current situation and the goals they have set for themselves.
We believe in applying proven and practical experiences, backed by
current market analytics and consumer insight to deliver bespoke
insurance solutions, so that their financial goals are not only met
but ensure their legacy continues.

We have representatives across the globe, so why not get in touch

to see how we can help you plan for a brighter future?

Hong Kong +852 2524 8176 North America +1 (305) 373 8460
Singapore +65 6512 9888 Switzerland +41 44 804 20 60

willistowerswatson.com
FIRM PROFILE
Steady growth with an eye to
the millennials
Vincent Chui of Morgan Stanley sees the challenges facing private banking as an
opportunity to selectively acquire talent and grow the platform to give it the right scale
and positioning especially with the next crop of Asians wealthy in mind.
Perhaps one of the more prudent ways
to approach the current private
banking environment is to view 2016
as a transitional year for industry
players to develop a rational view about
sizing and aspirations.
Being realistic is certainly a take-away
for Vincent Chui, managing director and
head of Asia institutional equity distri-
bution and private wealth management
at Morgan Stanley.
Private banking, notwithstanding its
secular growth, has been affected by
the very challenging investment and
low/negative interest rate environ-
ment, he says.
It impacts both the flow and fees busi-
ness, hence it is unrealistic for banks to
manage their business using 2015 rev-
enues as a baseline.
Whereas a few banks continue to seek
to add headcount, patience is prob-
76 WEALTH MANAGEMENT IN ASIA 2016
ably likely to pay off given that cyclical
headwinds will stay strong for a while,
adds Chui.
At the same time, it is hard to deny the
importance of scale. But it needs to
come via growth in the right way. Just
bringing in additional clients isnt neces-
sarily going to be most effective, cer-
tainly in comparison with additional
revenue. You can sign up as many
clients as you want, but ultimately in
this environment, most of them will
probably be cautious, explains Chui.
Where there is a big opportunity and
one of the drivers for him to position- VINCENT CHUI
ing the private wealth proposition in Morgan Stanley
this direction is to put in place the
people, processes and infrastructure
to attract and service the regions
wealthiest millennials.
manager. In Asia, its wealth manage-
TRADITIONAL STRENGTHS ment business adopts a very differenti-
With AUM of around USD2 trillion, ated approach, leveraging on its synergy
Morgan Stanley is the biggest US wealth with the firms top-ranked institutional
FIRM PROFILE
securities and investment banking fran-
chise and connectivity.
Private clients benefit from that sig-
nificantly in terms of investment ideas,
research and products, he adds.
On the flipside, the bank has deliber-
ately chosen not to be aggressive in
terms of lending on a stand-alone basis.
Saying that, it does use lending as a tool
to try to help its clients achieve their
goals in terms of hedging or investment,
as part of a more holistic approach.
As with its peers, the bank has found the
investment conversation with clients to
be a more challenging one over the past
12 months, and especially in 2016.
The risk-reward is different this year
versus the last two years, so any product
that gives you low volatility and reason-
able risk-adjusted returns is worth
looking at, explains Chui.
As a result, cross-asset product which
generates a reasonable yield, such as
4% to 5%, is in demand, as long as there
is a demonstrable track record and
limited drawdown. Cash-equivalent
products like money market funds and
certificates of deposit are also highly-
sought after.
This is where it is essential to take a longer
term view, he adds. These types of prod-
ucts are not very profitable for either the
asset management company or distribu-
tor, but to me its part of the service, and
at a time when clients need advisers to
help them take care of the problem of
having too much cash.
AN EYE ON WHATS NEXT
Where Chui does believe the bank can
also make a mark, is in advising the next
generation of Asias HNW and UHNW
78 WEALTH MANAGEMENT IN ASIA 2016
investors. And he knows that wooing
these individuals requires the firm to
adapt its approach.
More specifically, this involves bringing
on board relationship managers (RMs)
who are more aligned in their thinking.
Plus, they need to talk to these clients
about a wider set of solutions to meet
a broader variety of needs and goals.
The reality is, this next generation of
potential clients is not going to spend
all their time thinking about invest-
ments, explains Chui.
Instead, they are much more likely to
seek investment opportunity in a tech
start-up, conscious of their investments
environmental impact, and having more
Our model focuses on delivering top-quartile revenue
per head, hence the importance of bringing in and
retaining experienced RMs and product talent.
work-life balance. And the mechanisms
for delivering advice are different too.
A younger generation of RMs is there-
fore required to meet these needs, start-
ing with advisers developing the right
connectivity and better understand ing
of how these clients think.
Then, when this new generation takes
over or starts to share responsibility
with the first generation, we are already
speaking their language, adds Chui.
This is a challenge for the industry as a
whole, not just for Morgan Stanley.
The key thing, however, is to make a start
along this path by investing in and sup-
porting younger RMs.
Chui believes that the bank has an im-
portant advantage in the current set-up
in which he operates: with a crop of
high-quality and well-experienced RMs
who, on average, have 10 years-plus at
Morgan Stanley.
This is in line with the strategy that he
and his fellow senior management have
on productivity.
Our model focuses on delivering top
quartile revenue per head, hence the
importance of bringing in and retaining
experienced RMs and product talent,
he explains.
Whereas Morgan Stanleys Asia wealth
business is estimated to be managing as
much as USD60 billion, it is notable that
its team of a hundred RMs is small
among banks with similar AUM.
This is a crowded industry but if we
segment appropriately and execute well
with the right talent, it is a very good
business, adds Chui.
WHEN YOU WANT
THE BEST POSSIBLE
HEALTHCARE...
Our international health plans provide you with access
to over 1.2 million medical providers around the world
and come with a range of Medical Concierge Services
including 24/7 healthline, doctors referral, global
emergency assistance and evacuation.
We can also include preventive care such as health
checks, vaccination, dental and optical cover.
So whether at home or abroad, well be here with
premium health cover that you and your family can rely on.

FIND OUT MORE AT

BUPAGLOBAL.COM

ENQUIRY:
+852 2531 8560 globalplanhk@bupa.com
The plans are insured by Bupa (Asia) Limited and administered by Bupa Global. Bupa Global is a trading name adopted by Bupa (Asia) Limited in relation to its portfolio
of International Private Medical Insurance products and services. Bupa (Asia) Limited. is authorised and regulated by the Hong Kong Insurance Authority.
FIRM PROFILE
Investec strives to set new
advisory tone in Hong Kong
A focus on service-led, discretionary investment portfolios for a targeted group of clients
should enable Investec Wealth & Investment to articulate why and how it has something of
value to offer. This is the strategy Catherine Kirchmann is spearheading.
As the new kid on the block in Asian
private wealth management, Investec
Wealth & Investment has a clear strat-
egy that it believes will enable it to
weather one of the most challenging
landscapes in recent memory.
In addition to volatile financial markets,
a number of players in the industry are
also exiting this space, given the various
pressures from regulation, margin com-
pression and competition.
Yet the Investec Group didnt rush its
decision to open its new business in Asia.
As an organisation, it tends to leverage
where it has existing infrastructure, so
had comfort from its asset management
presence in the region dating back to
the late 1990s.
Plus, Catherine Kirchmann says the firm
has a very focused strategy in line with
the wider Investec Groups plans to
expand the division internationally.
80 WEALTH MANAGEMENT IN ASIA 2016
More specifically, says Kirchmann, divi-
sional director and responsible for In-
vestecs Wealth & Investment business
in Hong Kong, the goal is to offer
bespoke investment management ser-
vices to affluent Chinese and expatriates
in Hong Kong.
She is well-placed with her background
to oversee this. For instance, her exper-
tise lies in providing discretionary and
advisory investment services to profes-
sional investors, including HNW indi-
viduals, charities, trusts, companies and
clients of financial advisers. The focus
is very much on service rather than
product. We dont believe in putting CATHERINE KIRCHMANN
clients in pre-determined boxes or pro- Investec Wealth & Investment
moting off the shelf solutions.
SETTING THE TONE
Many of the firms clients in the UK and
Europe, as well as in South Africa, who Now it needs to be transferred to Asia
are in some cases loyal for over 20 something Kirchmann is confident
years, will testify to the firms client- about. With our strong track record,
centric approach. tailored and flexible approach to manag-
FIRM PROFILE
ing portfolios, and the access our clients
have to experienced and skilled invest-
ment managers, we are well-suited to
the unique needs of the Chinese and
expatriate markets in Hong Kong.
In particular, the people clients speak
to are the investment managers, so can
give much more specific information
about the portfolio. This also avoids the
all-too-common disconnect in some
other firms which happens between the
client and investment team sitting in the
background without really understand-
ing the clients investment objectives
and needs.
The evolving demographics in Hong
Kong also offer Investec reason for op-
timism. Not only are there growing af-
fluent and HNW populations, but they
are also getting younger.
As wealth passes down from first to
second generation, and from second to
third generation, people take longer-
term views in terms of wealth manage-
ment, says Kirchmann.
Meanwhile, the firm is also bringing a
less-trodden fee structure to Asia.
It charges clients an all-in management
fee. This is important in a market where
people are so focused on commission
and brokerage, adds Kirchmann. But
we believe that fees should be as trans-
parent as possible.
Ultimately, she predicts investors in Asia
will become more demanding when it
comes to the quality of advice.
When people are focusing on what
they are paying in fees, they want to
get something for their money, she
explains, to the extent that they want
their investments properly managed
82 WEALTH MANAGEMENT IN ASIA 2016
and they want to speak to individuals
who can have an in-depth conversation
about markets, asset allocation and
portfolio construction.
So while there will still be a large number
of wealthy individuals who will opt for
an advisory model, she sees there being
a growing opportunity for the discre-
tionary approach.
MEASURED GROWTH
For the time being, the focus for Kirch-
mann is Hong Kong, although she says
that she wouldnt rule out expanding
into other markets in Asia further down
the track.
We have only just begun here, she says.
We got the go-ahead from the SFC in
November 2015, but we officially
launched the business in April 2016. We
have started to gain some good momen-
tum, taking on a number of new clients.
One of the inevitable challenges she
shares with her peers is finding the right
people to join the team a potential
stunt to growth.
But the shortage is a slightly more dif-
ficult one to fill in Investecs case.
We are not just relationship managers,
explains Kirchmann.
We look for people who have got the
depth of experience in investment
markets, she adds, because what does
differentiate us from many of our com-
petitors nowadays is the fact that the
person you are speaking to is the person
managing your portfolio, not just
handing it back to a team or putting it
in a model portfolio.
In fact, the outflow of some private
wealth management firms from Asia is
Dedicated investment
process
To support its value proposition,
Investec has invested heavily
in a dedicated central research
function for its Wealth &
Investment business.
This consists of an experienced
team of analysts covering a
wide range of equities, fixed
income and collective investment
opportunities.
The research team is fully
independent of the wider
Investec Group, but benefits
from a collaboration of thoughts
and processes.
The process it follows is a
disciplined and consistent
one, with the sole purpose
of supporting the divisions
investment managers in
three core areas: asset
allocation, equity strategy
and collective funds
At this point in time, the Hong
Kong division offers international
and diversified portfolios.
When it comes to developed
markets, Investec Wealth &
Investment provides single-line
stocks and bonds, whereas in
developing markets, it uses
mutual funds, but within an
open architecture platform.
We are best-of-breed rather
than best-of-brand, explains
Kirchmann.
a positive development in her eyes. We
see an opportunity in this because
there are some very good people in
these organisations.
Enjoy your moment
in the Sun
We all dream of financial freedom and security. And weve
been helping our customers achieve this since 1890.
Across the seven markets in Asia where we operate,
we are ready to help you and your family achieve your
financial goals.
No matter where you are in your life journey, wake up to
a brighter day with Sun Life.

Visit us at sunlife.com

Lifes brighter under the sun

EVENT HIGHLIGHTS - WEALTH THINK 2016 - JUNE
Rethinking business models in
Asian wealth management
Speaking at Wealth THINK 2016 in Hong Kong, leading practitioners within Asian
wealth management explored some of the key themes shaping the look-and-feel for the
industry going forward as organisations rethink business models and re-define their
value propositions.
In a tough year for the wealth manage-
ment industry, chief executives and
other banking leaders are reconsidering
their business models, along with the
strategic choices they need to make, to
remain relevant in Asia.
At the same time, they are looking at
how they can take advantage of the
opportunities relating to China, includ-
ing the offshoring and onshoring of
Chinese wealth.
In line with this, we designed and
hosted our first Hong Kong-based
summit, in June 2016, for leaders from
Asia and globally.
For private banks, in particular, they
need to determine how to build a sus-
tainable platform for the future. In ad-
dition to having to increase scale, they
84 WEALTH MANAGEMENT IN ASIA 2016
need to be able to deal with the cost
and regulatory pressures they face.
Yet there is competition also coming
from different segments and types of
organisations within the wealth man-
agement industry.
In terms of China, many practitioners
believe that this market will be the
driver for the industry over the coming
decade, yet it is also a slowly-develop-
ing one.
A lot of conversations at the moment
among industry leaders revolve around
efficiency and enabling relationship
managers (RMs) to do more.
This involves digital capabilities in order
to help them to generate revenue op-
portunities rather than spending their
Thank you to our
exclusive sponsor
Thomson Reuters
time on more administrative tasks, or
doing research.
This wont change the fact of challeng-
ing market conditions, but it can help
to make these individuals more produc-
tive in the meantime.
Meanwhile, the desire to develop more
needs-based solutions for clients in Asia
is a process which will take time
perhaps another five to 10 years ac-
cording to some estimates.
In practice, in the current environment,
advisers need to focus on clients exist-
ing portfolios, rather than continue to
try to engage clients with new ideas. In
line with this, the banks must also adapt
their incentive structures, to think
longer term.
That will finally drive the change in
thinking needed to lead to a new busi-
ness model for wealth management
in Asia.
Alan Armitage Alan Luk Alvin Ma Bassam Salem Bobby Bok
Standard Life (Asia) Limited Hang Seng Bank EFG Bank Citi Private Bank Thomson Reuters

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

Peter McMillan Janet Chong Jonathan Ha Joseph Tam Jung Ho Rhee

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 85

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

Xiaofeng Zhong Alexandre Viale Henry Fu Peter McMillan Philippe Legrand

Amundi EY Thomson Reuters Thomson Reuters London and Capital Asia

86 WEALTH MANAGEMENT IN ASIA 2016

 Lower cost
Operational efficiency
Low complexity
Market penetration
Increased revenue
Minimised risk

50%
time reduction
1/3
reduction in
99.9%
straight through
to make a proposal operating expenses processing
(BCV) (Schroders) (Swissquote)

temenos.com @Temenos +Temenos Temenos

temenos.com
WEALTH MANAGEMENT IN ASIA 2016 87
CO-PUBLISHED ARTICLE

Regulatory change management for

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

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

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

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

88 WEALTH MANAGEMENT IN ASIA 2016

Source: MAS and HKMA Suitability Requirements on a timeline
the clear recommended actions
presented via a unified dashboard
Devise a periodic portfolio moni-
toring mechanism to ensure that
the clients portfolios are moni-
tored to detect unusual portfolio
performance, risk mismatch, con-
centration risks etc in order to
address suitability risk in a proac-
tive and timely manner
The majority of the large banks in the
region have a good understanding on
the principles of a successful suitability
framework. However, they seem to be
constrained with the challenges that IT
Source: Key steps in implementing a robust suitability framework
change management process and IT
infrastructure present.
This takes us towards concept of digi-
talisation and organisation agility where
the industry needs to identify efficient
ways of conducting business which
extends towards the space of regula-
tory and compliance topics.
THE RULE ENGINE SOLUTION:
STRATEGIC PERSPECTIVE
Traditionally banks have been big part
of their change budget to implement
the regulatory requirements (especially
suitability) and the corresponding
control processes to ensure compliance.
In spite of these large investments, most
of the private banking businesses even
today face formidable challenges based
on two aspects.
First, there are still a lot of administra-
tive overheads that the RMs and the
clients face due to ineffective ways of
implementing regulations that many
times ignore the business context of
private banking. This results in frus-
trated RMs, unhappy clients and poor-
ly-implemented control processes that
are heavily-scrutinised by regulators.
Secondly, decentralised IT implementa-
tions spanning across multiple core
WEALTH MANAGEMENT IN ASIA 2016 89
CO-PUBLISHED ARTICLE
banking components are too cumber-
some and costly to maintain. This results
in a less agile IT infrastructure that pre-
vents scalability of regulatory implemen-
tations across geographies or channels.
A central rule engine to develop and
maintain the rules will not only allow
ease of maintenance and future scal-
ability but also enable central control
and management of regulatory rules
and internal controls.
As such, the rule engine is designed only
to maintain the business logic relevant
to regulatory checks and envelopes
around the existing core banking
systems. This architecture facilitates
aggregation of relevant client, product
and portfolio information before the
business logic can be executed.
Such an implementation would enable
other digital channels and different
booking centres to connect to the rule
engine and start leveraging the cen-
trally developed regulatory rules.
Source: Central rule engine that facilitates ease of implementation and scalability across channels and booking centres
90 WEALTH MANAGEMENT IN ASIA 2016
This significantly brings down the cost
and time to market for new channel or
new booking centre integration.
The central maintenance of rules
become paramount as regulators across
different jurisdictions are coming in with
aligned practices. Even in cases of BCBS
239 and CRS (FATCA/AEI) require-
ments, the rule engine allows central
pooling of data and managing output
in a bespoke way. A regulatory change
needs to be implemented only in one
place and standard practices are avail-
able across different channels and
booking centres.
There are already established technology
products in the market that allow such
change agility that the banks could lever-
age. One of the products even offers
visually-customisable capabilities where
a business user can directly adapt many
configurations (for example, product
scope) and simple business logic which
makes the change even more efficient
and controllable directly by business.
Given the rapid increase in clients
demand for digital channels that are
accessible across the globe, there comes
a strong need to explore strategic ways
of implementing regulations across dif-
ferent jurisdictions.
Banks that head down this path will
definitely have an edge over the others
in gaining strategic market advantage.
The advantage and agility is even more
needed for the mid-sized private banks
in order to be able increase their effi-
ciency of conducting business by adopt-
ing digitalisation in relevant regulatory
and compliance topics.
With our many years of experiences in
shaping the topics on regulatory and
compliance, Synpulse has developed
and showcased specialised skills in this
area. Backed by both business and tech-
nology solution expertise, Synpulse is
well-positioned to offer its support to
clients in streamlining their regulatory
implementations in an effective and
meaningful way.
 From Prospecting to Onboarding and Servicing

Ensured & automated Risk and Compliance

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

Getting your Digital Bank ready

EXPERT INSIGHTS

How BEA is eyeing China for

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

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

We have been trying to refer clients within our

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

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

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

92 WEALTH MANAGEMENT IN ASIA 2016

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

We have been trying to refer clients

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

WEALTH MANAGEMENT IN ASIA 2016 93

EVENT HIGHLIGHTS - MIDDLE EAST WEALTH MANAGEMENT FORUM 2016 - FEBRUARY
Enhancing capability, capacity
and pipeline in the Middle East
Our inaugural event for the local wealth management industry in the Middle East,
hosted in Dubai in January 2016, highlighted key ways that the industry needs to
develop to move to the next level.
There is little doubt about the poten-
tial for wealth management and
private banking in the Middle East.
Statistics from various industry reports
highlight growth especially the fact
that a large proportion is from newly-
created wealth.
At the same time, Islamic finance has
proven its resilience against economic
headwinds is on a constant growth path.
Dubai, in particular, is also well-posi-
tioned to tap frontier markets around
the region.
Yet practitioners at the event high-
lighted that there is still a lot to do to
develop the regions and wealth man-
agement industry.
At a client service level, a big focus
must be delivering the right advice
94 WEALTH MANAGEMENT IN ASIA 2016
from people capable and competent
to do so. This will also help to remove
confusion between what is retail/af-
fluent banking versus private banking,
said speakers.
From diversification to wealth struc-
turing to client education to higher
standards of professionalism, there-
fore, organisations need to position
their businesses in line with the op-
portunities that exist, and define clear
value propositions. This also includes
reducing the dependence on oil and its
price fluctuations, which has an impact
on the fiscal situation of the various
GCC countries.
At a business level, finding the right
model that is suited to the most lucra-
tive client segments not just today,
but more importantly tomorrow
Thank you to our sponsors
Emirates NBD
Allocated Bullion Solutions
Amicorp Group
Comarch
FinIQ
Jersey Finance
Miles Software
Principal Global Investors
Profile Software
Old Mutual International
Thomson Reuters
remains a challenge. And ensuring the
right types of clients are on-boarded is
key to maintaining a compliant and
viable proposition.
Further, there is a lot more to be done
within local financial institutions to
position their wealth management of-
ferings as more strategic within the
wider group. This includes investing
sufficiently in the technology, platforms
and overall infrastructure.
At a regional level, meanwhile, there is
a need for regulators to be more joined
up, to provide clarity on cross-border
practices/activities and remove reliance
on tolerated practices.
Ahmad Chahidi Akash Anand Alastair Glover Andrew Mortimer Andrew Prince
Emirates NBD Private Banking Profile Software Wragge Lawrence Graham & Co Barclays Acuma

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

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 95

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

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

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

There isnt such an event that exists in the

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

Sandeep Lalwani Nayeem Khan

Miles Software Solutions Qatar First Bank

96 WEALTH MANAGEMENT IN ASIA 2016

 One sign-on, one client view, one solution
for Private Wealth Management

Client Relationship Advice Creation

Management and Execution

Portfolio Multi- device

Management Adviser Interface
and Client Access

Order Compliance and

Management Business Management

IRESS web-based Private Wealth Management solution seamlessly integrates the advice,
order execution, portfolio and client management tools you need to deliver your private wealth
service and an exceptional experience to your clients. Its ONE solution with multiple components
critical to your business. Its ONE sign-on, ONE client view and ONE interface enabling multiple
aspects of your client service. Its the ONE solution to multiple business challenges.

For more information: call +65 6672 6288 or email: enquiries@iress.com.sg

IRESS provides connectivity, trading, wealth management and market data solutions
Offices in: Australia, Canada, Hong Kong, New Zealand, Singapore, South Africa, United Kingdom. www.iress.com
FIRM PROFILE
Driving an all-round Indian
proposition for high-end clients
Edelweiss Global Wealth Management has shunned the oft-trodden route in India of pushing
product, trying instead to provide real solutions to targeted groups of HNW and UHNW
individuals. Anshu Kapoor explains the benefits this is bringing to the firm and its clients.
A growing number of wealth manage-
ment players in India especially the
foreign private banks are seeing mixed
results (at best) within their businesses
as the cost, regulatory and competitive
challenges have mounted.
But in what is an increasingly polarising
industry as a result, Edelweiss believes
it is bucking the trend.
For example, explains Anshu Kapoor,
the firms head of global wealth man-
agement, 2015 was a good year overall
for the firm across both wealth and
asset management.
Today, AUM across the two businesses
stands at the equivalent of around
USD9 billion, split roughly evenly.
We have reached critical mass now,
says Kapoor. I think we are number
three today, by any measure, in the
Indian market for serving both HNI and
UHNI clients.
98 WEALTH MANAGEMENT IN ASIA 2016
CLIENT FOCUS PAYS OFF
The firms strategy has been simple: to
be completely focused on its clients.
We dont look at it from an output
perspective; we think much more from
an input perspective, explains Kapoor.
Carefully selecting its client segments
to target is a key component of the
Edelweiss approach. For example, on
the UHNI side, it exclusively caters to
new-generation and next-generation
entrepreneurs, rather than servicing any
old wealth.
The firm also has a group which caters
to family offices and what it refers to ANSHU KAPOOR
as institutional clients. Within the family Edelweiss
office client base, it further divides the
market into evolving and evolved.
An additional business line provides
financing in relation to employee stock lending money against the shares that
ownership plans (ESOPs), which the staff own (or will own in the future), plus
firm sees as a large and growing cate- hedging the exposure and managing
gory. This involves a combination of the concentration.
A lot of other wealth managers only do
investment management, explains
Kapoor. Within our client segments,
we are focused on their needs, so we
have built our value proposition and
teams accordingly.
For instance, in the family office group,
clients get serviced by a mix of former
traders, investment bankers and insti-
tutional salespeople. This creates a
different kind of team, which is able to
deliver the solutions that clients need,
he adds, whether this is capital, advi-
sory, investment, leverage or tax struc-
turing and planning.
Perhaps the most tangible example of
the client focus that Kapoor is keen to
highlight is the fact that the firm invites
clients to some its own sales meetings.
There are two clients on our real estate
advisory board, he says. They help us
select real estate projects to be offered
to other clients.
THE RIGHT PACKAGING
A challenge for any wealth management
firm in India stems from the market
continuing to be characterised as rela-
tively short on product, yet long on
product pushing.
So standing out requires a different ap-
proach one which is more about
packaging a solution.
We help our clients to spot opportuni-
ties and trends, and be protected from
risks, explains Kapoor.
With a vigilant regulator which tries to
prevent any kind of over-complication
or complexity in the product offering
for investors, Edelweiss approach is to
agree an asset allocation with a client
and then be smart and nimble in creat-
ing opportunities.
For example, on the real estate side, the
firm co-partners with clients in dis-
tressed deals, as well as buying inven-
tory and underwriting for commercial
and pre-leased properties.
At the same time, Kapoor says the firm
is very focused on building up its invest-
ment platform, especially since this is
not something which can be easily
replicated. The rationale is, that in ad-
dition to be able to provide products
via the platform such as structured
investments, this also gives the firm
certain capabilities to service the client.
FINDING THE RIGHT TALENT
Despite the opportunities and market
potential, one of the drags on growth
in Indian wealth management continues
to be the availability of talent.
Yet Kapoor says Edelweiss wont com-
promise. We have an internal policy
that we only hire what we consider to
be A-raters.
Such an individual needs to pass a series
of tests. This starts with product, then
includes an MBA-like analytical test and
a psychometric evaluation. Beyond its
focus on the quality of intake, the firm
then trains and grooms these people
over time.
The reward for those who get through
the door is an environment of zero
politics and opportunity for growth.
We give our people the canvas to paint
on, says Kapoor. To us it is not impor-
tant what someone has done before; it
is what they want to do in life which is
more important.
Reflecting the ownership and incenti-
visation structure of the firm, its em-
ployees and founders own a combined
55% of Edelweiss.
Becoming digitally-enabled
Acknowledging the importance
of digital, Edelweiss has forged a
partnership with IBM to build a
digital infrastructure.
On the wealth management
side, this involves some big
investments, says Kapoor.
Salesforce is an example of
whats currently being
implemented in terms of
customer relationship
management.
In addition, to stave off the threat
from robo-advisors, the firm is in
the process of building a simple
online tool which its clients can
use to invest.
This highlights more broadly the
role that Kapoor sees technology
playing as part of the interface
with clients ranging from
digitising account opening to
transaction processing.
KEEPING IT LOCAL
Notable about Indias wealth manage-
ment landscape over the past 12 to 18
months has been the fact that some of
the foreign players have been unable
to grow their operations.
Yet addressing some of the key chal-
lenges in terms of capacity and capabil-
ity, and being able to scale the business,
starts by ensuring that it caters to the
needs of the local market.
India is an onshore-only market, very
much like the US, explains Kapoor. So
no player, whether foreign or local, can
work on an imported wealth manage-
ment model.
WEALTH MANAGEMENT IN ASIA 2016 99
EXPERT INSIGHTS

The components of a successful

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

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

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

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

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

100 WEALTH MANAGEMENT IN ASIA 2016

finance, but you also need a very solid
technology platform, as well as a good
equity brokerage set-up and research.
With this in mind, Bhagat attributes the
struggle of many wealth management
firms in India to the ability of getting
the three components of products,
platform and people right.
As time goes along it will only become
difficult because investment required
in these three facets will only be higher
and retention ratios on assets will only
be declining.
The advisory model is challenged by the commercial
reality of the business.
NEW PROSPECTS
The fact that many older entrepreneurs
in India have exited businesses has
created a pool of money that remains
available for investment. We also have
professionals who are selling stock
options and land, the proceeds of which
can be collectively described as new
money, says Bhagat.
IIFL Private Wealth Management has
found it easier to go after this type of
business. Old money typically went
with established wealth management
brands, he explains. Even if you did
break through, the client would possibly
start with 5% of their portfolio and test
you over 12 months to 24 months
before scaling up their portfolio.
So while the firm does business with
established wealthy families, it couldnt
have moved the money that it manages
today from other advisers because he
believes that it would have taken way
too long to do so.
EVOLVING THE CONCEPT OF ADVICE
Bhagat describes the introduction of
advisory guidelines in India as a major
step forward in the development of the
countrys wealth management sector.
This has the power to consolidate, to
look at all holdings under one umbrella
and deal with multiple advisers through
the custodian account as opposed to
individual segregated depository ac-
counts with multiple brokers.
Such reforms, driven by the Securities
and Exchange Board of India (SEBI),
have moved the country much closer
to global regulations in terms of disclo-
sures of fees.
In line with this, Bhagat suggests the
majority of the larger firms are going to
struggle to move to advisory mandates
because the fee structure doesnt
support their cost base. He adds that
IIFL Private Wealth Management is
exploring internally whether it could
potentially make such a move.
The advisory model is challenged by
the commercial reality of the business,
because typically in India, clients have
been averse to paying fees, he explains.
Digital demands
There is little doubt that while
digital technology will improve
adviser effectiveness along with
the client experience, user-
led dashboards will change as
platforms evolve and new ones are
developed. In turn, this will make a
big impact in terms of aggregation
of data.
The outlook for robo-advisers,
meanwhile, is less rosy among
HNW clients. Dealing mainly with
very simple products and ETFs,
Bhagat says that robo-advisers
have generally performed poorly
compared with actively managed
funds. Over the last 10 years,
active managers have consistently
beaten the index by a big margin.
Plus, given the way the regulations are,
an advisers ability to earn any kind of
commission is effectively zero.
In the interim, Bhagat says flow is more
important than transaction fee income.
We are not worried about earning a
specific fee on a transaction, he con-
firms. We are more interested in being
able to capture the flow of the transac-
tion for the client. Given all the tax
benefits in India for mutual funds, about
50% of our clients portfolio will always
be in these products, so we need to be
sharper in this business to get access
to the remainder of their portfolios.
The firms retention rates are healthy,
he concludes. We are possibly a little
less expensive in commoditised prod-
ucts and a little more expensive in ex-
clusive products, but we get the exclu-
sive products because we are sharper
in the commoditised space.
WEALTH MANAGEMENT IN ASIA 2016 101
EVENT HIGHLIGHTS - THAILAND WEALTH MANAGEMENT FORUM 2016 - MAY
Thai potential heralds new dawn
for wealth management offerings
Discussions at our 5th annual event in Bangkok for the local wealth management
industry highlighted renewed belief in the opportunities for the countrys banks, insurers,
asset managers and independent advisers.
The potential for open architecture
platforms to evolve and facilitate a more
holistic wealth management offering is
gathering momentum in Thailand.
In a declining interest rate environment,
clients are starting to look at new prod-
ucts to diversify portfolios. They are
moving from a risk-averse mind-set
where they focus on savings via depos-
its, money market funds and fixed
income towards equities, mutual
funds and some alternatives. More
broadly, with the growing wealth, the
scope for banks and advisory firms to
penetrate more clients with a wider
array of investment products, insurance
solutions and other services is more of
a reality than ever before.
These were some take-aways from this
event attended by 275 senior indi-
102 WEALTH MANAGEMENT IN ASIA 2016
viduals from the leading private banks,
retail banks, investment advisers,
Thank you to our sponsors
brokers, insurers and asset managers.
BNY Mellon
Ultimately, clients are starting to want Intellect Design Arena
more choice. This is coupled with a more Allocated Bullion Solutions
Henderson Global Investors
conducive and supportive regulatory
Henley & Partners
environment in the country, offering
Heritage Trust Group
the traditionally risk-averse investors IRESS
greater scope to invest more offshore. Labuan IBFC
Pafilia
But the logistics to make this happen and Vermilion Software
Allianz Global Investors
take root will take time. There is still much
ASK Group
to be done locally to raise advisory capa-
AXA
bilities, the quality of the product offer- BVI House Asia
ings and consistency in standards. There Charles River
is also a pressing need to enhance Commerzbank
systems, training and processes. Enhanced Investment
Products
Franklin Templeton
More specifically, although local banks
Investments
continue to have a lot of influence in J O Hambro Capital
terms of distribution, as they move from Management
Morningstar
Rosemont
Swiss Life
Swiss Asia
Iyer Practice Advisers
Thomson Reuters
UTI International
captive to open architecture, they will
need to find innovative ways to develop
more of the capabilities themselves.
Adisorn Sermchaiwong Charnwut Roongsangmanoon Don Charnsupharindr Evan Gallagher John Robson
CIMB MFC Asset Management Citi ASK Capital Management, Singapore Quantifeed

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

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 103

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

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

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

104 WEALTH MANAGEMENT IN ASIA 2016

When Flexibility
Meets Agility

Take the liberty to focus on your strategy.

Be quick and agile in serving your clients best.

The Avaloq group is an international leader in integrated and comprehensive

solutions for wealth management, universal and retail banks. Avaloq is the only
independent provider for the financial industry to both develop and operate its
own software. Our BPO centres use the Avaloq Banking Suite to gain valuable
insights that keep our solution at the forefront of technology.

We enable you to shorten your time to market, to remain flexible and agile and
we allow you to choose the operating model that best suits your strategy. Learn
more about Avaloq on www.avaloq.com

essential for banking

EXPERT INSIGHTS
Kasikornbank shows way to
service HNW Thais
When Jirawat Supornpaibul joined Kasikornbank (KBank) in early 2013, his mandate
was clear: build the best onshore private bank in Thailand. Already, he seems to be well
on his way to achieving this.
It is hard to see how KBank could have
grown its private banking business any
faster than it has to date.
Jirawat Supornpaibuls strategy to scale
this division under his leadership began
simply by inviting the banks privilege
customers to upgrade their account
status to private banking.
Underscoring his initial progress in just
three years, his business has amassed
over 9,000 HNW clients and more than
USD19 billion in overall assets.
Added to this achievement is the part-
nership it has forged with Lombard
Odier in terms of family wealth manage-
ment services, to widen its product of-
fering and add a global perspective for
KBanks Thai client base.
Yet Supornpaibul is a realist who knows
that the job is still far from complete.
He is now focused on building KBanks
investment advisory platform to appeal
106 WEALTH MANAGEMENT IN ASIA 2016
to Thailands growing number of HNW
individuals in a more significant way.
Of the USD19 billion within the private
bank, 60% is still in deposits and only
40% is under our advice. So we cannot
really say yet that all of this is AUM,
he explains.
The challenge he faces, therefore, is to
find ways to increase the take-up of
funds and other investment services
among the HNW amid an effort to nudge
them along the path to a more advisory-
type relationship with the bank.
BUILDING BLOCKS
Supornpaibuls plan is to build the JIRAWAT SUPORNPAIBUL
private banking proposition around Kasikornbank
three pillars: quality of advice, quality
of product, and quality of service.
With existing offerings ranging from
stock trading to security deposits, he However, he knows he needs to steer
says the bank is well-placed to cater to clear of servicing the typical short-term
most of the financial needs of HNW trading mind-set of local investors.
clients in Thailand. Instead, he is exclusively focused on
EXPERT INSIGHTS
helping customers to take a longer-term
view on their investments.
We are more focused on creating long-
term wealth, he adds.
This strategy has an added cost advan-
tage; it allows KBank to have fewer
relationship managers (RMs) in total.
For example, it only has 50 RMs, with
each looking after around 200 clients.
The number of clients for each RM
might seem high, but since they dont
do short-term trading [for their clients],
they do not need to be glued to a monitor
the whole day, explains Supornpaibul.
They can go out and meet clients and
work with their portfolio.
The approach of streamlining staff
extends to the advisory offering too. For
example, the bank has one financial
adviser for every five RMs.
Here again, Supornpaibul rationalises
this ratio because his RMs are also
equipped to construct investment port-
folios for their clients.
At the same time, he believes open ar-
chitecture is the way to go. This also
includes feeder funds for investors who
are looking for more diversification by
investing in overseas markets.
ACCESSING OLD MONEY
The centre-piece of the private banking
strategy, meanwhile, is being built
around KBanks ability to straddle both
capital markets and non-capital mar-
kets-related demands of wealthy Thais.
In particular, Supornpaibul says that
offering more than just investments is
key to wooing HNW clients in Thailand,
given that so much wealth is tied up in
real assets such as property and land.
108 WEALTH MANAGEMENT IN ASIA 2016
Every one of my clients has lots of land,
which is why we are expanding our non-
capital market services, he says.
Our wealthiest clients have the chance
to speak to Goldman Sachs, UBS,
Morgan Stanley, Credit Suisse or others
when it comes to capital markets, so we
cannot compete on offshore products.
So KBank is instead tapping on its wide,
local network and knowledge base when
it comes to the property market to gain
a foot in the door with this client
segment. We have a broad network of
people who want to buy and sell, and
also we are the financiers of many prop-
erty projects, he explains. As we have
the expertise, this is an area where we
can compete.
For example, he adds, a lot of these types
of clients acquire acres upon acres of
land, but after a while it becomes costly
for them keep those assets without
generating any return from them,
because they just add to the tax burden.
These people have expertise only in
collecting land, not developing it. They
also do not know how to sell it.
The specific opportunity Supornpaibul
sees is in advising these clients on the
holding structure for their land so that
it minimises their tax burden.
He believes that providing a proper
service to clients in this area will deepen
their relationship with the bank and
could, in turn, make them potential cus-
tomers for capital market solutions as
well, in the long run.
We look at the whole picture, he ex-
plains. And at this point we dont mind
if we are not charging a fee for our
advice. We want to build trust. Once we
Planning for the future
There are several emerging
areas of interest for KBank.
These include family office
services, tax planning and
creating family constitutions.
Private equity will also be
important going forward.
In Thailand, for example, this
part of the market is still
relatively disorganised, so
Supornpaibul wants to start to
build a network of people who
are looking to put their money
into start-ups.
Unlocking more of the potential
for private banking in Thailand
also calls for changes from the
regulator. In particular, says
Supornpaibul, there is a
growing need to meet the
requirements of the land-
owning HNW clients.
Estate trusts are the big topic
for discussion in Thailand.
People are looking for asset-
holding solutions that can
keep their assets for many
generations.
At the same time, he adds, the
regulators shouldnt shield local
wealth managers from overseas
competition.
I love to be in an open
competition, I dont want to be
protected. If you are protected
from international markets, you
cannot improve your capability.
help a small client who has his money
tied up in land to get some of the pro-
ceeds back, this individual could become
a big client.
allocated
bullion
solutions
LIQUIDIT Y & TECHNOLOGY
EXPERT INSIGHTS
Bringing a broader and deeper
offering to Thailand
With the local stock market flat and interest rates low, a new approach is needed to
service the investment and other financial needs of Thai investors all along the wealth
spectrum. Don Charnsupharindr of Citibank is trying to drive such change.
Wealth management in Thailand is
changing. At the top of the wealth
pyramid, there is a small number of ultra-
wealthy, with a growing number of indi-
viduals in the HNW segment. Following
in their footsteps is an-expanding group
of mass affluent customers.
Inevitably, each of these groups is
looking for a different kind of help in
terms of investment opportunities and
wealth-related needs.
Don Charnsupharindr, head of retail
banking for Citibank in Thailand, has
been doing some hard thinking about
how to service these different sorts of
customers in todays more challenging
and volatile environment.
In the past few years, there has been
a lot of development in the wealth space
in Thailand, he says.
The big question, is which clients want
to start to delve more into mutual funds?
110 WEALTH MANAGEMENT IN ASIA 2016
A TARGETED APPROACH
With three retail banking branches in
the country, the Citi offering has to be
carefully tailored to the banks cus-
tomer base. This means focusing on the
Citi Priority and Citigold segments.
Launched in 2016, Citi Priority focuses
on clients with THB1 million
(USD26,000) to THB3 million to invest.
Citigold, meanwhile, looks at clients
with at least USD100,000 equivalent.
The banks approach in Thailand over
the past three years to drive a longer-
term mind-set in investing has been to
offer its clients a global allocation-type DON CHARNSUPHARINDR
Citi
of advice.
During this period, Citi has seen clients
show more interest in investing in
Foreign Investment Funds (FIFs).
work with companies such as Allianz,
These are a version of the foreign funds JP Morgan and BlackRock. They bring
that get wrapped by local fund houses. in the offshore fund and then wrap it
For example, Citi has Thai partners who in the form of a local fund, in line with
 Empowering
client service
professionals
Vermilion Software is the leading
global provider of client reporting and
communications software and services
to the asset management industry.

WINNER
Back & Middle
Office Provider
of the Year

Our award-winning product, Vermilion

Reporting Suite, is designed to deliver
accurate, flexible and scalable client
reporting and communications.
The success of our product is deeply
embedded in our key differentiator:
exceptional domain knowledge and
deep understanding of the asset
management arena.
London
Vermilion Reporting Suite
Boston Transforming traditional client reporting
Singapore into a tangible return on investment

Sydney www.vermilionsoftware.com
EXPERT INSIGHTS
what local regulations allow. Citi has
also recently launched direct investment
into some offshore funds.
Falling interest rates have also played
their part in creating more opportuni-
ties, awareness and interest in new
types of investment products as part of
a wealth management strategy.
Just five years ago, one could easily
see time deposits in the range of 3% to
4%, observes Charnsupharindr, but
today its hard to get anything beyond
the 1.5% to 2% range. Times are even
harder in the securities market. The
bond yield curve is around the 1.5%
plus or minus range, he adds.
Citi as a global bank will play a role in terms of
being that alternative choice for Thai clients.
He sees this as creating opportunities
too: I think it encourages clients to think
about how to manage [their wealth] in
a more open-minded manner and not
constrain their strategies to what they
have traditionally been used to.
While Citi does not compete on a
branch basis with local players, its
network, digital platform and the es-
tablished card business it has, do
provide other opportunities too.
Our card business has a much broader
presence in the Thai market, explains
Charnsupharindr.
We then try to understand the client
base and identify those individuals who
112 WEALTH MANAGEMENT IN ASIA 2016
have the potential to become Citigold
clients, he adds.
PROACTIVE REGULATION
Regulation also has its part to play in
helping the market to develop.
For example, explains Charnsupharindr,
the governments deposit protection
scheme has previously set out that all
bank deposits are fully protected, al-
though the authorities are gradually
reducing this level. In the future, the
limit will be reduced, to THB1 million.
Charnsupharindr thinks this change will
encourage more people to start thinking
about how they diversify their invest-
ments, in turn potentially expanding the
relationship they have with banks.
From this perspective, Citi as a global
bank will play a role in terms of being
that alternative choice for Thai clients,
he explains, as well as having the broad
product range for our clients to select
from, especially bringing in offshore
products that are really our strength for
both our regional and global wealth
management platforms.
In general, the Thai government, in con-
junction with the Bank of Thailand and
the securities regulator, seems to have
come a long way in terms of measures
to create a more competitive landscape
that will eventually benefit the con-
Three challenges to Thai
success in wealth
First, getting the
infrastructure right to give
clients more flexibility and
choice around what they
invest and with whom.
Secondly, education
internally to ensure advisers
have the right mind-set,
and externally for clients to
think longer term.
Thirdly, planning for the
future which is largely
guesswork when looking
10 years into the future,
but includes making wealth
management mobile and
enabling clients to review
their portfolio and interact
with advisers anywhere,
any time.
sumer. I think this is absolutely the right
direction, adds Charnsupharindr.
Yet despite a more open market and the
new freedoms it offers Thai investors,
there is little doubt that they have a
preference for investments in Thai baht.
As a result, the feeder funds as well as
local funds will continue to be at the
core of the wealth management busi-
ness for banks like Citi.
For clients who are more sophisticated
and looking to have some exposure in
other currencies or to other products,
meanwhile, they have the option of
additional choices and alternatives. We
see it as something that complements
and further develops the wealth man-
agement industry in Thailand, says
Charnsupharindr.
Proven. Trusted. Client Driven.

We can help you transform your business, improve efficiencies and maximise opportunities.
As the leading business-to-business provider of global financial solutions to advisers,
asset managers, brokers, family offices and wealth managers, Pershings outsourcing
capabilities include:
Global clearing, custody and settlement
Investments
Execution
Technology

With 23 offices worldwide, Pershing has a 75-year history of serving institutional and retail
financial organisations. We are a part of BNY Mellon, recognised for delivering innovative
solutions that help firms around the world succeed and grow.

We are Pershing. Personally InvestedTM

Mark Nelligan
+65 6432-0216
mark.nelligan@pershing.com

2016 Pershing LLC. This advertisement is distributed by Pershing Securities Singapore Pte Ltd, which is a capital markets
services licenced entity regulated by the Monetary Authority of Singapore. It is an affiliate of Pershing LLC member FINRA, NYSE,
SIPC, a wholly owned subsidiary of The Bank of New York Mellon Corporation (BNY Mellon). Trademark(s) belong to their respective
owners. For professional use only.
EXPERT INSIGHTS

Thai insurers jump on

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

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

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

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

114 WEALTH MANAGEMENT IN ASIA 2016

tanotoke, senior executive vice presi-
dent at Thai Life.
DIVERSIFICATION LOOMING
Yet Thai Lifes rationale to broaden its
distribution is certainly a sound one.
The low interest rate environment plus
the ever-reducing disparity between
rates in developed and developing coun-
tries is impacting the appeal of savings
products among the emerging affluent
in Thailand. This is driving interest
among customers away from the tradi-
tional fixed income offerings towards
products such as unit-linked policies.
Anybody who has a proper touch-point with the
customer can play that role, which means that an
insurance company today might be a wealth
management company in the future.
Chantanotoke says this shift is also
taking place as customers become more
aware of what they want to invest in and
how they want to diversify their risk.
For example, he explains, they are
looking for something more attractive,
which varies the yield and enhances
their opportunity to gain more.
This also highlights the importance for
insurance companies of helping to drive
more of a needs-based conversation
with customers.
According to Chantanotoke, a number
of the leading local retail banks are now
more focused on segment marketing;
they are trying to make sure their front-
line staff are better educated about
insurance and can discuss the options
with customers based on goals and
objectives not just commission.
OPEN ARCHITECTURE
Against this backdrop, Thai Life is in the
process of partnering with a local bank
to design a platform for customers to
register all their insurance and asset
management products, whoever they
bought them from.
While still a work in progress, Chan-
tanotoke says the platform will enable
insurance agents to track their clients
overall exposure to all asset classes, in
turn helping them provide more tailored
and relevant advice.
The partnership can also be extended
to the product offering, he adds, creat-
ing an open architecture for banks and
insurance companies.
Such an approach to insurance is where
he says the industry should head, bring-
ing benefits to all parties.
At the end of the day, the distribution
channels need to become more open
architecture, in selling more investment
and financial products, and not only
their own products anymore, explains
Chantanotoke.
For example, the banks and other finan-
cial companies can provide clients with
a variety choices of products, including
combining investment funds together
with insurance solutions.
And insurance providers and asset man-
agement companies alike can therefore
then reach more customers through a
single channel.
MORE TOUCH POINTS
Growth is on the agenda for Thai Life
Partnership Solutions, meanwhile, to
expand the number of firms it ties up
with, says Chantanotoke.
It wants to broaden its partnerships
from banks to non-banking institutions,
including retailers, consumer finance
companies and telecoms, furthering its
customer reach in the process.
Going digital is another priority.
The firm is aiming to use new tools in
order to go directly to customers, as
part of efforts to increase the number
of touch points beyond agencies and
existing partners.
And Chantanotoke says he expects this
will start to become more of a reality
as insurance companies make a greater
foray into wealth management.
Anybody who has a proper touch-point
with the customer can play that role,
which means that an insurance company
today might be a wealth management
company in the future, he explains.
This is something we are looking at
and expect to happen; it is just a matter
of time, he adds.
WEALTH MANAGEMENT IN ASIA 2016 115
FIRM PROFILE

Kasikorn Asset Managements

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

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

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

KAsset has kept a keen eye on service,

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

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

116 WEALTH MANAGEMENT IN ASIA 2016

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

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

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

Instead, there is an ongoing review

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

Instead, there is an ongoing review process

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

In the future there may be some other

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

WEALTH MANAGEMENT IN ASIA 2016 117

FIRM PROFILE
A novel approach to wealth
advice in Thailand
MBMG Group has carved a niche within the countrys wealth management industry an
independent offering combining investments, insurance, corporate solutions and family
office services. And it charges for the quality of its advice.
The real need for wealth management
in modern-day Thailand can probably
be traced back to the Asian financial
crisis of 1997. Until that point, the cur-
rency, the Thai baht, had been pegged
to the US dollar, exchange control
regulations constrained capital flows,
and strict rules inhibited foreign owner-
ship of Thai investments and assets.
Nearly two decades later, the initial
need to manage the currency has given
way to a broader requirement for invest-
ment advice, insurance solutions and
other services to meet the needs of
emerging affluent as well as individuals
further up the wealth pyramid.
Whats more, the inbound and out-
bound flow of funds has been signifi-
cantly liberalised and many qualifying
Thai assets have been opened to wider
overseas ownership.
In line with this, the product range in
the local financial markets has gradu-
118 WEALTH MANAGEMENT IN ASIA 2016
ally evolved and expanded albeit at a
slower pace than many investors and
practitioners have wanted.
Despite a wide number of internation-
al investment assets and opportunities
being made available in various guises
in Thailand, investors can still only get
a much narrower range of options than
they can in jurisdictions like Singapore
or Hong Kong.
This is where Paul Gambles believes
that the value proposition of MBMG
Group really becomes clear. And, in
particular, its investments-focused divi-
sion, MBMG Investment Advisory. As PAUL GAMBLES
co-founder of the group, and managing MBMG Group
director of the investment advisory arm,
Gambles has spearheaded the delivery
in the Thai market of fee-based global
advisory services to both locals and
expats alike. customers starting to get more sophis-
ticated and interested in venturing
The rationale has been the following: offshore, this approach can add invest-
with wealth continuing to grow and ments which are relevant and inter-
national to their portfolios. It is very
difficult to get global investment and
wealth management advice in Thailand,
explains Gambles, who also serves as
chief investment officer.
While a lot of firms do a good job of
offering local products, there is defi-
nitely a shortage of international knowl-
edge, so we tend to focus on bringing
all of this together, consolidating what
people do with their local and interna-
tional exposures combined, he adds.
VALUE OF A FEE-BASED
MODEL
MBMG Investment Advisorys business
model is quite different from how the
banks and other traditional players in
the local wealth management industry
We get paid a fee, so the better the job
our advisers do, the higher the chance they have
of getting an ongoing fee.
operate. But Gambles says that he con-
siders this to be an important learning
curve for the market.
With the fees that the firm charges its
clients based on the advice it gives to
them, it places the focus and emphasis
of each adviser on the suitability of what
they are offering to their clients, to meet
their needs.
We get paid a fee to do this, says
Gambles, so the better the job our
advisers do, the higher the chance they
have of getting an ongoing fee.
In pursuing this approach, Gambles is
confident about how his firm has been
performing in terms of delivering com-
petitive and cost-effective products to
clients. ETFs are one example of many.
COMPETITION DRIVING BETTER
SERVICE
This type of competition and alternative
for providing wealth management
advice is also exactly what Gambles
thinks the local market needs.
This is in order to create greater interest
and attract more quality to the industry.
In general, there seems to be little incen-
tive for most Thai retail banks to focus
on private banking services, given their
successes in the various retail segments.
As a result, there are few organisations
around to provide real investment
advice of the type that MBMG Invest-
ment Advisory offers.
At the same time, there is a need for
more people and products to continu-
ally educate the wider market about the
scope of global opportunities.
GROWING PIE
Gambles also says he has seen growth
in the number of wealthy families in the
20 years he has lived in Thailand in-
creasing from a handful of those which
Doing the right thing
by clients
MBMG Group has been focused
on providing relevant advice
to its clients in Thailand since
opening its doors in 1995.
It has developed into a provider
of investment advice, corporate
solutions, insurance and family
office services. And it has
expanded from its initial focus
only on expats to now working
with many local clients.
Its advisory arm, MBMG
Investment Advisory, is
registered with and licensed by
the Securities and Exchange
Commission of Thailand,
providing investment advisory
services and as a derivatives
adviser.
Among its advisory services
are: financial and investment
planning; investment funds;
retirement funds; currency
markets; trusts; wills &
foundations; insurance; and
tax planning.
control most of the wealth in the
country, to several hundred.
In the meantime, he explains, more
and more wealthy foreigners have
decided to move to Thailand, or they
might have chosen to buy a second
home in the country.
These two groups are examples of the
expanding demand for more effective
and cost-efficient ways to manage
wealth in the HNW and family office
space, adds Gambles.
WEALTH MANAGEMENT IN ASIA 2016 119
EVENT HIGHLIGHTS - PHILIPPINES WEALTH MANAGEMENT FORUM 2016 - MAY
A need for more investment and
conviction in the Philippines
The country faces a variety of hurdles to develop its wealth management industry.
Overcoming risk-aversion to turn more savings into investments, expanding the product
range, and developing more advisory capability are all key ways to breed investor
confidence and engagement.
Wealth management in the Philippines
continues to be characterised by savers
rather than investors. Inevitably, this
is a consequence of the availability of
mostly simple products. Innovation
remains relatively stifled.
With three different regulators respon-
sible for oversight for banking, asset
management and insurance, there is no
level playing field to provide products
and services in an efficient way.
The win-win, it seems, will come when
advisers offer needs-based selling via
open architecture platforms, and when
investors become a bit less risk-averse
via investments and insurance solutions
as a way to build and protect wealth.
However, to ensure any initiatives have
meaning and will have an impact, the
120 WEALTH MANAGEMENT IN ASIA 2016
regulator needs to step in to help en-
courage a more structured and com-
Thank you to our sponsors
prehensive approach to investor educa-
tion and professional development. Miles Software Solutions
AG Delta
At the same time, banks need to evolve Henley & Partners
Allocated Bullion Solutions
their offerings and models to really dif-
Asiaciti Trust
ferentiate themselves, as fees and
ASK Group
products are still too similar. Part of this AXA
relates to developing digital tools and Commerzbank
driving a more relevant customer en- Franklin Templeton
gagement; this is the focus for most Investments
J O Hambro Capital
banks for the time being. It is also
Management
critical as they look to make themselves
Legg Mason
more relevant for the millennials, plus Swiss Life
to create a more long-lasting impression Swiss Asia
on clients today. Thomson Reuters
Priorities for the development of wealth
management in the Philippines include:
educating investors as early in their investing; enhancing the competency
lives as possible to be more aware of of bankers and other advisers / agents
through more formal training and as-
sessment; broadening the investment
options via a greater array of investment
products; and enabling more access to
invest overseas.
These were among the key talking points
at our 2nd annual event in Manila, where
250 senior individuals attended across
the top retail banks, trust banks, securi-
ties firms, insurance companies and local
asset management firms.
Aaron Mullins April Tan Carlos Jalandoni Clement Lee Dhawal Kamath
Asiaciti Trust COL Financial Bank of the Philippine Islands Legg Mason Miles Software Solutions

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

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 121

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

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

122 WEALTH MANAGEMENT IN ASIA 2016

Numerix Oneview Distribution for Investment Products
An Agile Private Banking and Wealth Management Price Discovery
and Order Execution Platform

Numerix Oneview Distribution enables real-time price discovery and order execution for structured
products, from vanillas to most exotics. Powered by Numerixs extensive expertise as the leading
provider of analytics and solutions, Oneview Distribution delivers a robust, industry proven solution
for structured products pricing and execution.
ONEVIEW DISTRIBUTION
WORKFLOW BEFORE

With Oneview Distribution

ONEVIEW DISTRIBUTION

relationship managers
WORKFLOW AFTER

gain direct connection to

counterparties, eliminate
time consuming back and
forth, and gain competitive
advantage with the ability to
make educated investment
decisions in real time.

Put time back on your side and gain competitive advantage in

our quickly moving markets with Numerix Oneview Distribution.
www.numerix.com/oneview-distribution
EXPERT INSIGHTS
Changing the Philippines
investment mind-set
Robert B Ramos of the Union Bank of the Philippines explains why investor education
and formal training for front-line bankers can make a wealth management offering more
compelling. This will change how the countrys emerging affluent think about investing.
When it comes to the concept of wealth
management in the Philippines, most
investors still seem set in their old ways.
With the mentality of savers, they
prefer to hold most of their liquid assets
in time-tested fixed deposits, rather
than investing in mutual funds that offer
the promise of higher returns and also
more diversification.
A major appeal of time deposits is the
2.5% fixed return on offer. Yet while
high enough to beat inflation, what they
earn is significantly lower than the
average 8% from equities on the local
stock exchange.
As a result, it is difficult to see how most
of these individuals can achieve their
long-term financial objectives.
There is much greater comfort with
time deposits, explains Robert B
Ramos, first vice president and trust
officer within the trust and investment
services group at the Union Bank of the
124 WEALTH MANAGEMENT IN ASIA 2016
Philippines. People dont talk about
investments based on their current
objectives, their time horizon, or their
needs. What they do know is that equi-
ties are volatile.
Tied to this mind-set is also a preference
for holding investment assets in the
form of a trust.
Though these are widely-accepted
structures in the Philippines, they make
the process much more cumbersome.
A trust is a complex structure, adds
Ramos. It integrates the US asset man-
agement and custody businesses into ROBERT B RAMOS
Union Bank of the Philippines
one service. It serves its purpose here
but we need to learn from what is hap-
pening in other countries.
EDUCATION TO PAY OFF
Being able to deepen the understanding Only then, says Ramos, will they be able
among investors generally of the value to objectively evaluate the risks as well
of wealth management relies on proper as returns trade-offs associated with
education about products. investing without getting disheart-
ened by short-term influences, such as
market volatility.
In line with investor education, advisers
too need to increase and widen their
knowledge, he adds.
The common approach in the Philip-
pines at the moment not dissimilar to
what happens in many Asian markets
is to sell products which are front-of-
mind. And in the Philippines, this tends
to mean a time deposit. If we try to
provide more in-depth training to advis-
ers to enable them to understand what
might be suitable for a client, it will allow
them to offer different products and
services that will fit the needs of these
clients, explains Ramos.
Often, clients pick one bank over another
based on just one criterion: location.
But prioritising financial education for
investors rather than advisers may result
in a bigger bang for the buck.
It will, says Ramos, deter advisers from
taking the easy road by trying to recom-
mend products for a client without first
taking the time to understand what is
suitable for them.
The win-win will come when advisers
embark on the road towards needs-
based selling at the same time as inves-
tors look beyond short-term gains
towards building long-term wealth.
Meanwhile, to ensure that any initia-
tives can have the most impact, the
regulator is likely to need to step in to
make it compulsory. At present, with
bank staff able to take or leave these
courses, few advisers lack formal cer-
tification and training.
STANDING OUT
Beyond the quality of their advisers, a
big challenge for banks in the Philip-
pines is to differentiate themselves, as
fees and products are broadly similar.
Often, clients pick one bank over
another based on just one criterion:
location. Clients go to a bank thats
nearest to them, explains Ramos.
The surest way to make an impression
on the client, therefore, is to enhance
the customer experience. This comes
back to the importance of quality of
advice. Products are standard, so you
cant really be exotic in your offering.
So you have to compete on experience.
Those banks which are able to offer a
broad array of products and services
under one roof will also have a greater
chance of success. But to achieve this,
institutions need to change the way
they sell products, to integrate various
aspects of the wealth management
process into a single function.
If you create alliances that allow you
to do different investments through one
account, you are in a better position to
succeed, says Ramos. Wealthier clients
are short on time, so they want a one-
stop shop.
Building the right wealth
proposition for the
Philippines
Union Bank has identified its
target customer segment as
the emerging mass affluent
meaning individuals with between
USD80,000 and USD500,000 in
investible assets.
The appeal of these individuals is
clear, says Ramos.
They have the potential to
generate more business as they
grow in wealth and stature; they
can also serve as a good source of
referrals for the bank.
In contrast, the relatively few
HNW and UHNW individuals
in the Philippines present less
potential for many local bankers;
these clients like to place some
of their assets in more mature
markets such as Singapore and
Hong Kong.
It is also perhaps more realistic for
local banks to target the affluent
segment given the limited amount
of product innovation.
While there are different types
of fixed income and equity funds
to offer short-, medium- and long-
term investment choices,
the strategies adopted by different
funds are more or less similar,
if not identical, says Ramos.
There is a need to bring in
more variety.
One way of adding variety to the
product mix is to have an open
architecture model, where banks
can sell funds from other providers,
says Ramos.
Union Bank is adopting this
approach, he reveals, but this is at
an early stage.
WEALTH MANAGEMENT IN ASIA 2016 125
EXPERT INSIGHTS

Catering to a more global outlook

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

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

The Philippines is a growing economy, which means

the existing market will become more affluent.

NANJO BERBA
Philam Asset Management, Inc.

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

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

126 WEALTH MANAGEMENT IN ASIA 2016

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

This strategy has proven effective, says

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

WEALTH MANAGEMENT IN ASIA 2016 127

EVENT HIGHLIGHTS - MALAYSIAN WEALTH MANAGEMENT FORUM 2016 - JULY
Finding the way forward in
Malaysian wealth management
Perhaps most pressing in the country is the need to overhaul the business model, in
large part to kick-start the revenue engine by increasing the penetration of wealth
management products and services as long as this is more focused on the right type
of (longer term) revenue.
Hubbis 6th annual event in Kuala
Lumpur for the Malaysian wealth man-
agement community, in mid-July, came
at a time when the industry is facing
one of its toughest-ever years. Markets
are clearly tough for everyone, and chal-
lenges are mounting across all aspects
of the service and product offering.
There is little doubt that the dynamics,
regulatory intent and demographics are
all on Malaysias side when it comes to
developing a healthy and sustainable
wealth management market. The ques-
tion-mark is over the pace it is moving.
There are several key ways in which
Malaysian wealth management can
move to the next level. First, there is a
need to embrace change, given the
inevitable emergence of fintech, the
next generation of investors, new com-
128 WEALTH MANAGEMENT IN ASIA 2016
petitors and regulatory reform, among
various changes underway. Secondly,
players must focus on building the right
culture; this needs to come via innova-
tion and human capital. But this is not
just about product innovation; rather,
new ways to engage consumers and
leverage relationships. Thirdly, it must
be easier for clients to do business, by
giving them multiple points of contact
through greater collaboration. Tied to
this is the need for clearer and more
targeted communication for clients.
Fourthly, there should be more investor
education and awareness generally,
with all industry stakeholders required
to play a role in ensuring this.
Asset managers, meanwhile, need to
extend their global offering to the local
market, providing professional money
management in non-retail structures.
Thank you to our sponsors
Allocated Bullion Solutions
Intellect Design Arena
Henley & Partners
Heritage Trust Group
IRESS
Sun Life Malaysia
Vermilion Software
Franklin Templeton
Investments
Mercer
Morningstar
Rosemont
Swiss Asia
Temenos
Iyer Practice Advisers
Thomson Reuters
Solution-based versus product-based
offerings will also enable stronger
manufacturer-gatekeeper relationships.
For Islamic wealth management, in par-
ticular, there is an opportunity for the
Islamic banks to also focus on HNW
business in addition to the retail market.
In insurance, providers can play a much
bigger role in the wealth management
sector if they can embed advice into dis-
tribution and offer more protection.
Ai Mei Chan Alex Tan Alvin Lee Alvin Tan Anthony J. Harper
Affin Hwang Asset Management AmInvest Maybank Standard Financial Adviser Managed Accounts Partners

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

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 129

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

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

130 WEALTH MANAGEMENT IN ASIA 2016

IMPORTANT: XIE Shares CLSA GARY ETF and XIE Shares FTSE Chimerica ETF (each a Sub-Fund) are sub-funds of XIE Shares Trust II, which is an umbrella unit trust established under Hong Kong
law. The Sub-Funds are exchange traded funds that provide investment returns, before fees and expenses, closely correspond to the performance of respective underlying indices (each an Index).
Investments involve risks, including the loss of principal. Investors are advised to consider their own investment objectives and circumstances in determining the suitability of an investment in the Sub-
Funds described in this document. An investment in the Sub-Funds may not be suitable for everyone. If you are in any doubt, you should consult your own independent professional advisors.
Key risks of the Sub-Funds
The Sub-Fund is not actively managed, therefore when there is a decline in the Index, the Sub-Fund will also decrease in value.
The Sub-Fund is an investment fund. There is no guarantee of the repayment of principal. Therefore your investment in the Sub-Fund may suffer losses.
As the price of the units in a Sub-Fund (the Unit) is driven by market factors, such Units may trade at a substantial premium/discount to the Sub-Funds net asset value.
Changes in the net asset value of a Sub-Fund may deviate from the performance of the Index due to factors such as fees and expenses, any adoption of a representative sampling strategy, liquidity of the
market, foreign exchange costs and changes to the regulatory policies.
If the index provider terminates the index license agreement or the Index or otherwise does not allow the Sub-Fund to use the Index, and there is no successor index or if its funds size falls below HKD100
million, the Sub-Fund may be terminated and investors may suffer a loss.
You should read the prospectus of the Sub-Fund for further details, including their features and risks. Your investment decisions should not be based solely on this document.

Simplifying Investing in
Emerging Markets
Stock Code: 3102.HK
XIE Shares CLSA GARY ETF
Stock Code: 3161.HK
XIE Shares FTSE Chimerica ETF

Enhanced Investment Products Limited (EIP) was established in 2002. We are a Hong Kong-based investment management firm focused on the Asia-Pacific
region. In 2014, CLSA Hong Kong Holdings Limited (CLSA) acquired 49% of the XIE Shares Hong Kong ETF platform. Under the new partnership, EIP can widen
its distribution network with the involvement of CLSA and the broker network of CLSAs Parent, CITIC Securities.
Telephone: 852-2110 8600 | Fax: 852-21198089 | info@xieshares.com | www.xieshares.com
Disclaimer: This document is prepared and issued by Enhanced Investment Products Limited (EIP). XIE Shares Trust II and its sub-funds (Index Funds) are authorized by the Hong Kong Securities
and Futures Commission (SFC). SFC authorization is not a recommendation or endorsement of the Index Funds and it does not guarantee the commercial merits of the scheme and its performance.
This document has not been reviewed by the SFC and does not constitute an offer, recommendation or solicitation to buy or sell any security or enter into any other transaction. Its contents must not be
reproduced, distributed or transmitted to any person in any jurisdiction where it is unlawful to do so under the laws of such jurisdiction. Past performance is not indicative of future performance or returns.
This document contains general information only. You must not rely on this document as any such advice or any offer, recommendation or solicitation to buy or sell any security or to implement any invest-
ment strategy. This document is also subject to the terms and conditions for XIE Shares' website (which are fully set out at http://www.xieshares.com/www/terms_conditions.html?lang=en) as if this docu-
ment is part of the content of XIE Shares' website. Index Providers Disclaimers:XIE Shares CLSA GARY ETF (the Fund) is not in any way sponsored, endorsed, sold or promoted by CLSA Limited in
its capacity as Index Provider and CLSA Limited will not make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Index and/or the
figure at which the said Index stands at any particular time on any particular day or otherwise. In addition, CLSA Limited makes no representation or warranty, express or implied, to the owners of the Fund
or any member of the public regarding the advisability of investing in securities generally or in the Fund particularly or the ability of the Index to track general market performance. CLSA Limited does not
guarantee the accuracy and/or the completeness of the Index or any data included therein. The Index is compiled and calculated by S&P Opco, LLC. However, neither CLSA Limited nor S&P Opco, LLC
shall be liable (whether in negligence or otherwise) to any person for any error, omission or interruption in the Index and neither CLSA Limited nor S&P Opco, LLC shall be under any obligation to advise
any person of any error, omission or interruption therein. CLSA Limited makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose
or use with respect to the Index or any data included therein. Without limiting any of the foregoing, in no event shall CLSA Limited have any liability for any special, punitive, indirect, or consequential
damages (including lost profits), even if notified of the possibility of such damages. CLSA Limited is not responsible for and has not participated in the determination of the prices and amount of the Fund or
the timing of the issuance or sale of the Fund or in the determination or calculation of the equation by which the Fund may be converted into cash or other redemption mechanics. CLSA Limited has no
obligation or liability in connection with the administration, marketing or trading of the Fund. Inclusion of a security within the Index is not a recommendation by CLSA Limited to buy, sell, or hold such
security, nor is it investment advice.
All rights in the FTSE China N Shares All Cap Capped Net Tax Index (the "Index") vest in FTSE International Limited ("FTSE"). "FTSE " is a trade mark of the London Stock Exchange Group companies
and is used by FTSE under licence. XIE Shares FTSE Chimerica ETF (the "Sub-Fund") has been developed solely by Enhanced Investment Products Limited. The Index is calculated by FTSE or its agent.
FTSE and its licensors are not connected to and do not sponsor, advise, recommend, endorse or promote the Sub-Fund and do not accept any liability whatsoever to any person arising out of (a) the use
of, reliance on or any error in the Index or (b) investment in or operation of the Sub-Fund. FTSE makes no claim, prediction, warranty or representation either as to the results to be obtained from the Sub-
Fund or the suitability of the Index for the purpose to which it is being put by Enhanced Investment Products Limited. 2015 Enhanced Investment Products Limited. All rights reserved. "XIE Shares" and
"" names and logos are registered trademarks of Enhanced Investment Products Limited.
FIRM PROFILE
A wealth of opportunity for
RHB Bank
The Malaysian bank has its sights on building a wealth management offering for the
South-east Asian region that U Chen Hock believes can more-than-adequately compete
head-on with any of its peers.
Its never too late, it seems, for banks in
Asia to realise that they need to do more
with the generally vast number of afflu-
ent customers on their books.
Having under-penetrated and therefore
under-serviced this segment until now,
RHB Bank is confident about what it can
do for these individuals. We think there
is a lot of room for us to play more to
our strengths and build these out over
time to meet the needs of this segment,
says U Chen Hock, RHBs head of group
retail banking.
CLEAR SEGMENTATION
What RHB means when it defines its
affluent segment are individuals with
a minimum AUM of RM200,000
(USD49,000), or those customers with
a home property valued at more than
RM1 million, or people with a salary or
income of at least RM20,000.
From the banks existing base of affluent
customers, it knows that anyone who
132 WEALTH MANAGEMENT IN ASIA 2016
falls into one or more of these categories
has a much broader range of financial
needs that can be serviced.
We therefore see a lot of opportunity
to do more with them, says U.
In practice, these customers have money
put aside for investments and are gener-
ally looking for wealth management
products, including unit trusts, dual-
currency instruments, insurance solu-
tions, structured products, FX trades
and other types of deposits. And RHB
doesnt want to miss out.
On the Islamic side of the offering, U says U CHEN HOCK
the bank is very much in line with the RHB Bank
aspiration of the central bank to grow
the Shariah-compliant share of the busi-
ness to 40% by 2020; it currently repre-
sents around 24.1% of all assets.
return from their investments, explains
We want to help these affluent custom- U. This involves how they diversify their
ers make their money work harder for assets, to give them more choice in
them, so that we generate a much better terms of asset classes.

Re-launch
In line with its business strategy,
RHB is undergoing a re-launch of
its premier proposition, meaning
its top segment of wealth.
This involves a refresh of the
brand some elements of which
will reinforce the way it reaches
out to these customers; others
will provide added value, such as
a new premier card that comes
with exclusive benefits.
PLAYING TO ITS STRENGTHS
To date in Malaysia, foreign banks have
enjoyed a significantly higher penetra-
tion of products such as funds than their
local counterparts.
U has been watching this closely as he
looks to make the RHB offering more
compelling than average, especially
since many customers are multi-banked.
This involves developing a greater un-
derstanding in the first place of what its
customers are actually looking for, and
then using these insights to build its
capability to match that.
What RHB can also bring to the table
is our regional expertise, says U.
This plays to the appetite of many of
Malaysias wealthy and aspiring wealthy
to diversify outside of the country.
We have a regional asset management
business out of Singapore, giving us
access to more products than some of
the domestic players in Malaysia, and
we can help clients manage their cross-
border investments, he explains. This
is where we are trying to differentiate.
The overall customer experience, driven
by the service, is another key way that
U believes the bank can stand out.
To be able to achieve all this, he knows
there is an urgency around developing
talent to support the areas of growth
he has earmarked. We have always
been very strong in the mass segment,
for example, but not as much in the mass
affluent and affluent segments. So,
naturally, if we want to swing our focus,
strategy-wise, to these two segments,
we have to make sure we have the kind
of talent to manage these customers.
INVESTING IN THE VISION
While still in its early days, U says the
RHB wealth management proposition
is built on some solid foundations.
We have put in a lot of effort over the
last 12 to 18 months in creating the key
pillars to support the people, processes,
products and technology, to help us to
deliver the services that meet the
demands of this segment, as well as
satisfy the expectations in terms of cus-
tomer experience, he explains.
At the same time, to ensure the sustain-
ability of the model as well as client re-
lationships, RHB is looking to create
more fee-based income streams.
Much of this will be driven by the in-
vestment on the IT front, starting with
enhancing our loan origination system,
plus implementing a new CRM system
along with a portfolio management tool.
We are also going to invest in a brand
new digital platform to provide us with
the kind of flexibility to develop apps as
frequently as possible, adds U.
This should also set the bank up well to
service the next generation. We are our digital strategy to meet the needs of
recalibrating the way we deal with these
RHBs priorities
Over the next few years, U says
the bank has its sights set on
three key objectives.
First, is to continue with its
current strategy to manage its
business by priority segments,
especially its affluent and mass
affluent customer groups, given
that it is yet to fully tap into the
opportunities these both present.
Secondly, is to focus on building
out its digital capabilities.
And thirdly, is to ensure it has the
right type of people to win and
service the business it wants to,
by growing, training and retaining
its talent pool.
clients, he says. This means engaging
millennials with tools to reach out to
them in more relevant ways, for example
via mobile apps, to make banking con-
venient. This also caters to their prefer-
ence to transact online.
In line with this, the bank launched its
RHB Now Mobile Banking Application
in May 2016 to offer customers simple,
fast and seamless banking experiences
using smartphones.
It also includes a first-in-the-market
feature that enables customers to send
money to family members, friends and
any individual using mobile numbers,
email or Facebook, without the need for
a bank account number. Recipients can
then accept the transacted amount
through an RHB account or any other
Malaysian bank account. This is part of
the new generation, adds U.
WEALTH MANAGEMENT IN ASIA 2016 133
EXPERT INSIGHTS

Can Malaysia create a real

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

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

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

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

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

ROBERT FOO
There is definitely more acknowledgement about a MyFP Services

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

because we have been talking about it for years.

model really caught the attention of

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

134 WEALTH MANAGEMENT IN ASIA 2016

It has provided some guidelines for
the insurance industry, for instance,
by introducing a scorecard system and
enabling product providers to place
non-commissioned products either
online or through bank branches.
This means instead of buying insurance
products through tied agents, therefore
incurring commissions, individual cus-
tomers now have more flexibility.
Meanwhile, the Employees Provident
Fund (EPF) is trying to build its own fi-
nancial planning arm, to employ advisers
within its payroll to give advice to people
on how to invest their EPF money.
When the public is more educated, then they
will start to demand it, as they can see the
various options and things that are
happening all over the world.
RELUCTANT TO CHANGE
Reforms have not happened in any
notable way at the moment, mainly
due to the fact that the market is made
up of a few dominant institutions and
their tied distributors, with a lack of
competition to change the status quo,
explains Foo.
Further, it is unrealistic to expect any-
thing far-reaching in terms of an en-
tirely new approach from the banks
and the dominant institutional product
manufacturers in this area.
This will most likely only come about
when the public demands it, or when
there is pressure from the regulator,
explains Foo.
What needs to happen is more com-
petition, whether in the form of local
or overseas institutions, adds Foo.
Then there will be more emphasis by
the regulators in terms of advice.
He points to the examples set by the
regulators in markets like the UK and
the US, which has been intent on
driving changes in the industry.
Where there is more activity from the
Malaysian regulators more recently is
in the fintech space, as the authorities
want the financial services industry
to be prepared for the threat from
potential disruptors.
A CREDIBILITY ISSUE
It is also not very practical to rely on
the various industry groups and rep-
resentative associations across the
country to lead the necessary changes,
based on what Foo describes as a
conflict of interest issue.
While the Financial Planning Associa-
tion of Malaysia (FPAM) might seem
a natural vehicle to drive reforms, Foo
says that many of the incumbent in-
dustry representives dominate the
FPAM Boards policy making body, so
he expects little change from FPAM.
The Association of Financial Advisors
(AFA), meanwhile, claims to represent
the intermediaries and stand between
the customers and the product provid-
ing institutions.
There might be a credibility issue
here, explains Foo, because AFA
was started by long-time life insur-
ance agents. So their perspective
could be more skewed towards life
insurance than the whole financial
planning profession.
At the same time, however, he ex-
plains that some of these advisers are
starting to see the importance of in-
dependent advice.
TAKING A BOTTOM-UP
APPROACH
If a top-down approach seems to be
unlikely for the time being in Malay-
sian wealth management, a bottom-up
effort based on educating the public
seems to be more feasible.
Indeed, there is a pressing need for
practitioners at all types of institutions
to help investors understand and ap-
preciate what choices are available to
them to buy.
And this is not just from a Malaysian
perspective; they should be looking
at opportunities globally.
When the public is more educated,
then they will start to demand it, as
they can see the various options and
things that are happening all over the
world, explains Foo.
Then I think the regulators will prob-
ably move a bit faster.
WEALTH MANAGEMENT IN ASIA 2016 135
FEATURE ARTICLE

Re-igniting the revenue engine

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

Amid stagnant transaction volumes and

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

This can be done in various ways both

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

136 WEALTH MANAGEMENT IN ASIA 2016

 A UNIQUE VIEW
ON GLOBAL
INVESTING
In todays market, finding the best opportunities
takes a truly global perspective. Ours comes from
over 600 investment professionals on the ground
across more than 25 countries. Put our expertise
to work for you via our wide range of global funds.
Find out more at
franklintempleton.com.sg

This advertisement is for information only and does not constitute investment advice or a recommendation and was prepared without regard
to the specific objectives, financial situation or needs of any particular person who may receive it. The value of investments and the income
from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not an indicator nor
a guarantee of future performance.
Copyright 2016 Franklin Templeton Investments. All rights reserved. Issued by Templeton Asset Management Ltd. Registration No. (UEN) 199205211E
FEATURE ARTICLE

in Singapore, says the focus this year

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

At the same time, UBS will soon offer

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

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

138 WEALTH MANAGEMENT IN ASIA 2016

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

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

Best Fixed Income House Best SGD Bond Fund

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

Best Local Currency Bonds

Best Hard Currency Bonds
CM

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

Asset Management Awards

Best Fund Manager, Singapore Best RMB Bonds, Offshore

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

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

Source: Citywire, Morningstar,

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

For Stefansson, meanwhile, it is impor-

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

According to Marc Lansonneur, manag-

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

It is easy to price a transaction and

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

WHICH OF THE FOLLOWING SHOULD BE THE MOST IMPORTANT

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

This includes investments which are

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

140 WEALTH MANAGEMENT IN ASIA 2016

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

At Aviva Investors, we believe its time to think

differently. Thats why our entire organisation
is united behind one common goal to deliver
the specific outcomes that matter most to
todays investor. By harnessing the exceptional
breadth and depth of our global resources,
we cut a path through complexity to focus on
the specific outcomes our clients need.

Visit avivainvestors.com
or call +65 6491 0560

investor outcomes

Sustainable Income | Capital Growth | Beating Inflation | Meeting Liabilities

For todays investor

Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited (Aviva Investors). Unless stated
otherwise, any opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from
an investment managed by Aviva Investors nor as advice of any nature. This advertisement is prepared by Aviva Investors Global Services
Limited, registered in England No.1151805. Registered Office: No.1 Poultry, London EC2R 8EJ. Authorised and regulated in the UK by the
Financial Conduct Authority and a member of the Investment Association. It is being circulated by way of an arrangement with
Aviva Investors Asia Pte. Limited for distribution to investment professionals only. Recipients of this advertisement are to contact Aviva
Investors Asia Pte. Limited in respect of any matters arising from, or in connection with, this advertisement. Please note that Aviva Investors
Asia Pte. Limited does not provide any independent research or analysis in the substance or preparation of this advertisement. Aviva
Investors Asia Pte. Limited, a company incorporated under the laws of Singapore with registration number 200813519W, holds a valid
Capital Markets Services Licence to carry out fund management activities issued under the Securities and Futures Act (Singapore Statute
Cap.289) and is an Exempt Financial Adviser for the purposes of the Financial Advisers Act (Singapore Statute Cap.110). Registered Office:
One Raffles Quay, South Tower #27-13, Singapore 048583.
20150811_02
FEATURE ARTICLE
ing market equities some contrarian
trades can offer good opportunities.
An uplift in returns is also possible
through alternatives such as private
equity and real estate, to take advantage
of dislocation in the markets or dis-
counted assets.
To be able to get through this uncer-
tain period, buying some simple put
options can also make sense, as do
hedging strategies.
More broadly, structured solutions
should continue to play an integral role
in client portfolios not really for
speculative purposes, but rather to
protect portfolios and get access to
markets which investors might not oth-
erwise be able to reach.
GOING PASSIVE
There is also increasing scope for Asian
Having a very dynamic risk management strategy in place
is essential; this means that as risk changes, the portfolio
adjusts so that it is still optimal for the investor.
WHAT IS THE MOST IMPORTANT INVESTMENT THAT BANKS NEED
TO MAKE TO ENSURE A MORE SUCCESSFUL DPM OFFERING?
28%
clients to use more passive instruments
in their portfolios.
The region still trails the US and Europe
in this way, given that Asian investors
still believe they can do stock-picking
and out-perform the markets without
too much difficulty.
By contrast, pension funds, for example,
have for a long time had a core alloca-
tion to passive investments.
This is due to the benefits of such instru-
ments: they can help portfolio construc-
tion and management in various ways
such as transition management, liquid-
ity management, managing portfolio risk
and managing portfolio costs.
In reality, it is possible to construct a
very good portfolio with passive invest-
ments so, in fact, this part of the
process is active.
Educaon of RMs
Educaon of clients
MAKING DISCRETIONARY
Building robust portfolios
One of the key ways to build
a robust portfolio for clients is
based on the recognition that
the world is a lot more complex
and volatile than before.
So having a very dynamic risk
management strategy in place is
essential; this means that as risk
changes, the portfolio adjusts
so that it is still optimal for the
investor. This is a big departure
from traditional portfolio
management theory.
For example, a robust portfolio
refers to one that can take
into account current zero
and negative interest rates. It
must also be able to deal with
unexpected potential events,
such as how QE will end.
There are also new approaches
for managers to consider as part
of portfolio construction.
These include factor-based
strategies, to build a more
diversified portfolio which is
not as sensitive to one or two
specific underlying factors.
Another important trend relates
to the importance of cost as
part of the process. This is being
driven by regulation around the
world
Porlio /
OFFERINGS WORK
investment specialists
Todays market landscape also highlights
16% the importance of managed accounts
56% and DPM.

This is because the relationship between

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

142 WEALTH MANAGEMENT IN ASIA 2016

FEATURE ARTICLE

But the most expensive component of

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

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

there must be fiduciary oversight and

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

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

the por olio

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

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

DPM becomes more relevant in chal- DPM becomes more

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

144 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS
Physical gold: are you ready?
A low-yield environment should remind investors of golds role as a safe-haven
investment. But wealth managers and investors should also consider physical gold, says
Seamus Donoghue of Allocated Bullion Solutions.
Gold has always been a favourite asset
class for many Asians, particularly
among the Chinese and Indians, serving
as a safe heaven.
Data from the World Gold Council
shows that since the 1970s, precious
metals have had an average of 63
months worth of bull markets, with an
average cumulative return of 385%.
This compares with 42 months worth
of bear markets, with a negative return
of 44%, says Seamus Donoghue, chief
executive officer of Allocated Bullion
Solutions.
Meanwhile, among many asset classes,
only gold has experienced more than a
15% return in the first quarter of 2016.
The demand for gold as a safe-haven
investment is also growing in China,
for example, happening against the
backdrop of the uncertainties over
146 WEALTH MANAGEMENT IN ASIA 2016
the domestic economy, capital out-
flows and the depreciating currency,
explains Donoghue.
STICKY BUSINESS
Despite these market signals, not many
banks do much business in physical
gold, given its relatively complicated
trading process.
Yet Donoghue believes that these in-
stitutions would find that it pays off in
the long run.
For instance, he says that physical gold
custody has no capital or leverage
impact on the banks; this is because SEAMUS DONOGHUE
Allocated Bullion Solutions
the physical gold does not sit on the
banks balance sheet.
Meanwhile, banks can enjoy a stickier
AUM, adds Donoghue, explaining that
the majority of the gold that gets bought custody fees and high transaction fees.
sits with the banks. What this leads to Plus, it is a differentiated offering to
for the banks, he explains, are recurring show clients.
 Solutions built
on a strong foundation
J.P. Morgan is one of the most established providers
of structured products to the Asian region. Working
closely with financial intermediaries and local
distribution networks, J.P. Morgan meets the needs
of a wide variety of investors in the fast growing
markets of Hong Kong, Singapore, China, South
Korea, Taiwan, Malaysia, and Thailand.

For more information, contact us:

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

jpmorgan.com

J.P. Morgan is a marketing name for investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan
arranging, financial advisory and other investment banking activities are performed by a combination of J.P. Morgan Securities Inc., J.P. Morgan Securities plc
and the appropriately licensed subsidiaries of JPMorgan Chase & Co. in EMEA and Asia-Pacific, and lending, derivatives and other commercial banking
activities are performed by JPMorgan Chase Bank, N.A.
EXPERT INSIGHTS
Giving clients the product
proposition they want
Lavanya Chari of Deutsche Bank Wealth Management is a staunch believer in
working with clients to meet their shorter and longer term needs not fitting
everyone into the same bucket.
With the potential to access the relevant
suite of products from the investment
banking side of its business and various
counterparties across the street,
Deutsche Banks wealth management
business is confident that it has weath-
ered the storm over the last 12 months
better than many of its peers.
We have focused on a few different
things, says Lavanya Chari, head of global
products and solutions at Deutsche Bank
Wealth Management in Asia Pacific. One
is capital markets, which is our bread-
and-butter business. And we have made
a concerted effort to grow the accruals
business, both from a funds perspective
and from a discretionary portfolio man-
agement standpoint.
At the same time, she adds that in terms
of structured products, credit-linked
notes have been a big success story for
the private bank. But the bank has much
more to offer. And going forward, Chari
explains that continuing to try to diver-
148 WEALTH MANAGEMENT IN ASIA 2016
sify the product offering is high on the
agenda. It all stems from an approach
which is about having conversations
with clients to help them meet their
needs whether these are short-term
or long-term in focus.
REFRESHED
The goal for the more forward-looking
private banks is to continuously enhance
the value proposition and suitability
framework for their product offering.
There is no question in Charis mind that
this involves refining the mix.
This is what we are in the process of LAVANYA CHARI
Deutsche Bank Wealth Management
doing, she says. For example, we are
focusing more on discretionary portfo-
lios. We are also making a concerted
effort to expand our alternatives offering
to clients to give them access to oppor-
tunities they otherwise wouldnt get. the street, from which it can develop
bespoke alternatives products. For in-
This is based on the banks relationships stance, it works with managers to create
with pretty much all the fund houses on feeder funds to essentially give clients
Aiming to be the best,
not the biggest.
With capacity-restricted equity funds and experienced
fund managers given intellectual freedom in an
entrepreneurial environment, our accent is on
performance.

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

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

JOHCM (Singapore) Pte Ltd

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

London - Singapore - Boston - New York

J O Hambro Capital Management Limited (JOHCML) is an investment boutique authorised and regulated by the UKs Financial
Conduct Authority. JOHCM (Singapore) Pte Ltd is a wholly-owned subsidiary of JOHCML and regulated by the Monetary Authority
of Singapore (MAS).
EXPERT INSIGHTS
the ability to invest smaller amounts
into funds that would not be accessible
to them otherwise. Private market op-
portunities are also in focus, involving
sourcing opportunities for clients.
A further change is likely to come in
terms of the bank doing more on the
digital front. This is a significant focus
area for us, explains Chari. The way
clients look at their money has changed
because the world has changed, so we
are working on several initiatives to try
and take this business to the next level,
including portfolio analysis plus our
internal straight-through processing to
bring down costs.
More specifically, the bank is building a
tool which looks at a clients portfolio
and the extent to which it deviates from
the model portfolio based on the clients
agreed risk appetite and requirements.
RMs can then discuss this with each
client on a regular basis, to determine
if thats what they want in the short
term, or if they want to move back to
their ideal, or model, portfolio.
THE RIGHT CONVERSATIONS
A lot of the time and energy the bank
is spending to evolve in these ways is
also for the purpose of facilitating more
needs-based conversations between
front-office advisers and their clients.
We need to offer clients more of what
they need, acknowledges Chari. Some
clients will definitely want funds, so
those are the individuals to whom the
bank will offer managed products and
discretionary portfolios, she says.
Then there are other clients, such as the
young entrepreneurs in some countries
in Asia, for instance, who are unlikely to
cede supposed control over their portfo-
150 WEALTH MANAGEMENT IN ASIA 2016
lio to a private bank, so the ability to trade
FX, equities and other products they have
a view on becomes the priority.
Even though the bank might give them
its house views and access to its product
suite, they simply wont relinquish
control. To Chari, this highlights the
stark difference between what happens
in Germany and in Asia. These are the
two extremes, and I have several con-
versations with my counterpart in
Germany where he wants to make his
business more like mine, yet I want to
make mine more like his.
Yet while the goal is to take the best-
in-class from both sides and try to
combine them, the reality is that the
penetration of discretionary mandates
in Asia, for example, will continue to be
limited relative to Germany for the
foreseeable future.
The fundamental difference in attitudes
and needs of Asian clients is exactly why
Chari believes relationship managers
(RMs) must have bespoke conversations
with the client rather than try to
squeeze them into a mind-set which just
doesnt seem to fit.
Many Asian clients want returns. They
do not want returns only in 20 years
time; they want them annually.
As a result, she believes that, in addition
to a long-term portfolio, it is equally the
fiduciary responsibility of the adviser
to try and meet all client needs. It may
not be possible every single year to
achieve the desired returns, based on
market conditions.
And even where there is a short-term
focus by clients for a specific investment
or part of their portfolio, this doesnt or
shouldnt impact the long-term rela-
tionship with the RM.
Our top RMs have known their clients,
and often their families, for 15 years or
longer, and they do will not do anything
that would negatively impact the client,
she explains.
According to Chari, the need for broader
and more open conversations with
clients is also a key way for private banks
to provide more value.
Clearly we speak to them about the
markets and the product offering across
different asset classes, but we also have
conversations with clients around their
personal situations, she says.
This ranges from discussing setting up
trusts, to children getting married, to the
possibility of divorce, to insurance. We
work on every aspect of the clients fi-
nances and business dealings, she adds.
We have a wealth planning team whole
focus is on the clients best interests.
BROADENING THE OFFERING
UHNW clients have been one of
Deutsche Banks key focus areas over
the last several years.
This is driven by its capabilities across
different products and asset classes.
We have every single aspect of the
product suite, across the spectrum,
which very few other banks do, ex-
plains Chari.
In addition, the bank is now targeting
the broader HNW client segment in
Asia. In line with this, the bank is working
now on improving its systems as well as
its processes, to service this larger group
of clients.
 External
Wealth Management
Platform
YOUR KEY TO INDEPENDENCE

Are you a Private Banker?

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

LOOK NO FURTHER, CONTACT

SWISS-ASIA FINANCIAL SERVICES PTE LTD:

INFO@SWISSASIA-GROUP.COM

OR VISIT US AT
WWW.SWISSASIA-GROUP.COM
EXPERT INSIGHTS
How Citi is enhancing its
advisory offering
Paul Hodes explains how Citi is enhancing its advisory offering to clients in the region,
as well as improving the education of staff to drive more needs-based conversations.
A huge amount of work has been under-
way within Citi to raise the level of
advice it provides for its clients, says
Paul Hodes, head of consumer bank,
wealth management in Asia Pacific, in
an interview.
For the banks HNW segment, for
example, they now get in-depth and
analytical tools to review their portfo-
lios. This aims to help them to deepen
their understanding, not only their hold-
ings, but also of the extent of the diver-
sification of their portfolios.
The Citi advisory process has led to
strong sales and earnings, says Hodes,
along with positive client feedback.
Advice can lead relationships in terms
of deepening understanding, and ulti-
mately driving the companys business.
For the banks affluent customer base,
the Citigold Diversification Index (CDI)
is a simple tool to help clients better
understand their portfolios.
152 WEALTH MANAGEMENT IN ASIA 2016
The CDI measures portfolios in terms
of how they are placed versus the rec-
ommended model portfolio and the
underlying holdings, says Hodes.
It also tests potential concentration risk
in terms of the extent to which clients
portfolios are diversified across geog-
raphies and sectors, for instance,
EDUCATING STAFF
To better educate its front-line staff,
Hodes says Citi works exclusively with
the Wharton School of the University
of Pennsylvania, in terms of training.
The goal is to deepen the understanding
of wealth management and relationship PAUL HODES
Citi
managers (RMs).
So when recommending a product, this
should help the RMs understand what
the academic research is behind it.
When we talk about portfolio or RMs need to get into a more sophisti-
manager selection, about diversifica- cated level of conversations with clients
tion, or about risk versus returns, try to to provide ideas to them, and the tools for
think about what they really mean. them will help to educate clients too.
EVENT HIGHLIGHTS - INVESTMENT SOLUTIONS FORUM 2016 - JUNE
Finding investment solutions
for challenging markets
Amid highly-challenging markets, product manufacturers and distributors urgently
need to get clients to use a broader range of portfolio and investment solutions. In
particular, diversification and risk management are critical.
In todays uncertain investment envi-
ronment, listening to clients to under-
stand their needs and present diversi-
fied portfolio solutions to them will
differentiate the winners and losers.
Indeed, against the backdrop of what
seems to be the toughest year for a long
time for wealth managers to make
revenue product manufacturers and
distributors must guide clients to use a
broader range of investments which are
more suitable and relevant.
In line with this, we designed and hosted
our new-format, investment-focused
event in Singapore in June 2016.
This brought together 275 senior indi-
viduals including leading product &
fund gatekeepers from the top interna-
tional and local private banks, retail
154 WEALTH MANAGEMENT IN ASIA 2016
banks, multi-family offices and IFAs, as
well as relationship managers and in-
vestment advisers from the industry.
There are clearly many uncertainties in
todays investment markets. For
example: Brexit discussions, oil prices,
US Fed interest rate hikes, Chinas
growth issues, and more.
As a result, the focus needs to be on
diversification of risk and also the re-
balancing of portfolios.
At the same time, it seems that what-
ever assumptions that investors might
have about the past might not be rel-
evant for the future.
Advisers therefore need to question
their assumptions before building port-
folios for their clients.
Thank you to our sponsors
Franklin Templeton
Investments
iShares
Leonteq Securities
STRATEGY Consulting
Commerzbank
Morningstar
An important consideration when
managing portfolios today is also to
continue to move in the direction of
removing the responsibility for making
investment decisions from the end-
clients to the investment specialists
whether via a discretionary portfo-
lio management (DPM) model or
another format.
Advisers, as part of more outcome-
oriented and needs-based conversa-
tions with cleints, also need to re-align
client expectations in terms of returns
and performance with what the market
is actually offering.
There is, in general, a need to think
longer term which, ultimately, should
mean the longest time period which the
individual client can stomach.
Akshay Prasad Anthony J. Harper Arnaud Tellier Arthur Wu Christophe Aba
Deutsche Bank Wealth Management Managed Accounts Partners BNP Paribas Wealth Management Morningstar JPMorgan Private Bank

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

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

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

Roger Meier Steven Moeller Simon Ip Stanley Sia Tuan Huynh

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

WEALTH MANAGEMENT IN ASIA 2016 155

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

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

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

156 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS
Getting onto a banks funds
distribution platform
Given the dominance of banks in Asia in distributing mutual funds, Stewart Aldcroft
of Citi reveals what asset managers must do to get approved onto a banks platform,
and how to avoid getting kicked off.
Banks have a dominant position in
terms of distribution of funds in Asia.
In Hong Kong, Singapore and Taiwan,
for example, banks represent more than
80% of all mutual funds sales.
According to Stewart Aldcroft, manag-
ing director of Citi Markets & Securities
Services, and a senior advisor in the
Asian fund management industry, fund
houses must adhere to some specific
criteria in line with the distributors
clearly-defined processes to get their
product on the platform.
THE 4Ps
Product is often the most important one,
explains Aldcroft.
Some key features include being de-
nominated in US dollars, although RMB
is increasingly sought after by mainland
investors. Further, UCITS (Luxembourg
or Dublin) is preferred, and an AUM of
USD500 million-plus is ideal.
Performance is also critical, given the
desire among banks for best-of-breed.
Consistency of returns over three and
five years is key, as is having the same
manager for these time periods, follow-
ing a repeatable and definable invest-
ment process. This should create dif-
ferentiated alpha to appeal to the bank.
For pricing, standard funds have a front-
end load but often 5% is fully rebated/
discountable. They also need annual
management fees with trail commission
to create annuity fees for the banks.
When it comes to people, local represen- STEWART ALDCROFT
Citi
tation is necessary, as is responsiveness
in terms of any follow-up on enquiries.
Once on a platform, Aldcroft says funds
must be careful not to get de-selected.
against the benchmark index and peer
This might happen due to: the departure group; corporate risk; capacity constraints;
of the fund/portfolio manager; style drift; and transparency of fund, manager or firm
poor risk controls; under-performance in providing information.
WEALTH MANAGEMENT IN ASIA 2016 157
EXPERT INSIGHTS

Making the switch from

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

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

158 WEALTH MANAGEMENT IN ASIA 2016

Another hurdle for the banks in making
a portfolio, needs-based approach work
is the dependency on having skilled RMs
and portfolio account managers.
This is where some banks have been
found wanting.
RM turnover remains high, so the banks
ability to develop more of a portfolio
service at a cost they can maintain is a
challenge, says Mooney.
AGAINST THE TIDE
None of these factors are deterring
Asias wealth management industry
from trying to effect change.
The pressure to create more sustain-
ability in the advisory model is increas-
ing. This is coming not just from the need
to make the economics of the business
work better, but also from the spotlight
on fee transparency which Mooney
believes is only going to get brighter.
There is definitely more connectivity
among regulators around the cost of an
advice-based conversation, he says,
and there is much more focus by inves-
tors in todays low interest rate, low
return environment on what they are
getting for their money.
He also foresees the next five to 10 years
as going to be arduous.
The cost pressures are not abating
within the industry, with revenues
coming under significant pressure. The
squeeze is certainly on, he explains.
It is those incumbents in the industry
which can migrate to a model where
they will be able to offer the services
that scale, and at a lower cost, which will
win in the long run.
I would imagine that 10 years from now,
everything will be much more transpar-
ent, says Mooney.
In addition, portfolio-wise, services will
essentially be standardised using tech-
nology, and, in some instances, product-
based commissions will have disap-
peared. he adds.
TRUE PARTNERSHIP
In bank distributors trying to move
towards a more sustainable model, fund
houses can help them.
One of the things that BlackRock aims
to do in line with this, is have a genu-
inely differentiated relationship with
its distribution partners.
We dont want to be regarded as just
another product provider, says Mooney.
Three or four years ago, our main rela-
tionship with these firms was mutual
funds based. Today, we have a very differ-
ent relationship as a result of the breadth
of our product and advisory capabilities,
he explains.
For example, BlackRock is making its
ETFs available inside the banks discre-
tionary portfolio teams, plus the firm is
doing much more model portfolio busi-
ness in some cases providing asset
allocation services.
On top of this product proposition, the
value-add comes from the firm helping
with education, training and also, po-
tentially, with distribution.
More specifically, this might involve
conversations about how these dis-
tributors can evolve their business using
various technologies to make it more
focused on portfolio advice.
Looking onshore
For fund houses looking to
capitalise on the opportunities
in Asia, and not get caught up
doing the same as everyone else,
they need to look onshore.
Thats where the growth
potential is, says Mooney. For
international asset managers
with any medium to long-term
ambition in this region, and
which want to build scale, they
cant be a foreign company. They
can be international, but they
cant be foreign.
This means they need to put
down roots in markets where
they see growth. To do this
successfully requires them to
determine how they can make
themselves relevant.
And that wont only be through
selling offshore funds.
As a result, the historical
approach of importing an
offshore fund range from Dublin
or, predominantly, Luxembourg,
into Asia, is no longer enough.
For Mooney, two simple facts say
it all about the potential from
the vast amount of untapped
wealth onshore: an average cash
balance among Asian investors
of four or five times that in
the West, yet a much lower
percentage of their investments
being in managed funds.
Over time, I think we will see
a greater move into managed
investments, mutual funds and
ETFs, he predicts. Thats going
to come from cash and from
wealth accumulation. And just
having offshore funds wont
be enough.
WEALTH MANAGEMENT IN ASIA 2016 159
EXPERT INSIGHTS
Why bank distributors must
re-tune product platforms
Intermediaries in Asia are grappling with how they adapt their product offering and
position investment strategies to end-clients in todays environment. June Wong of
State Street Global Advisors explains the role that fund houses can play.
The influences of challenging invest-
ment markets, relatively low fund
penetration and regulation such as fee
disclosure are driving a much-needed
transformation in product platforms
at private banks in Asia.
Over the past 20 years, the dominant
model of client engagement has been
to use thematic and active strategies,
generally via stand-alone products.
But the limited success that many
banks have had in selling funds cannot
be ignored.
As a result, a growing number of these
distributors are adapting and refining
their approach, including leaning towards
more of a discretionary offering.
More and more intermediaries need
to prepare and re-invent themselves
for todays world, says June Wong,
head of Asia ex-Japan for State Street
Global Advisors (SSGA).
160 WEALTH MANAGEMENT IN ASIA 2016
The old model of engagement cannot
continue. There should be a better way
of serving clients.
To do this in practice involves them
increasingly looking at passive instru-
ments, such as ETFs, smart beta strat-
egies, and outcome-oriented invest-
ment solutions.
A FULL MENU
The move towards a broader and more
holistic product offering is inevitably
a positive development for a firm like
SSGA, given its focus on active and
passive strategies.
JUNE WONG
State Street Global Advisors
On the one hand, it has a comprehen-
sive range of passive and smart beta
strategies, whether in the form of ETFs
or UCITS structures. This is comple-
mented by the more outcome-focused
solutions, explains Wong. options in how it can support distribu-
tors, depending on their preferences.
At the same time, the firms active funds Plus, SSGAs offering is global, so Wong
and alternatives offerings give it more says it can work with intermediary
partners wherever they make their
buying decisions.
Further, it can either act simply as a
provider of individual products and
solutions, or work in a more consulta-
tive way with a bank if they are looking
for advice and guidance on how they
formulate their asset allocation and
populate the product platform.
The old model of engagement cannot continue.
There should be a better way of serving clients.
In line with the stage of development
of the industry, the current discretion-
ary-focused phase requires a good
supply of underlying products to serve
as building blocks.
In todays low-yielding environment,
characterised by volatile markets
where the outlook for individual asset
classes is unpredictable, asset manag-
ers and investors alike have to work
much harder to generate returns in
terms of asset allocation and being
more efficient, says Wong.
PROACTIVE
But the help that fund houses like SSGA
can give distributors goes beyond the
products themselves.
As part of the evolution that private
banks need to go through, asset man-
agement companies need to think
about the types of individuals who they
put in-front of fund gatekeepers.
We need to hire differently in terms
of front-line staff, says Wong.
For example, she says they need to be
more technical, to be able to better
understand the needs of intermediary
partners. Their role must develop
beyond that of just a relationship
manager, so that they can work with
them to create more relevant solutions.
Modern dialogue needs to go beyond
just performance and talking about
different campaigns to launch togeth-
er, she adds.
This is also essential given clients now
have access to more information, and
new ways of sourcing it, via a greater
variety of communication channels.
BETTER SOLUTIONS
Wong believes that more transparency
driven by regulation and a portfolio-led
approach is a good thing for Asia, to
ultimately serve end-clients better.
This will steer the industry towards
more cost-effective solutions, she
explains. But it is all part of an evolu-
tion which will take time.
In particular, she sees this as having an
impact in servicing the growing mass
affluent and emerging HNW segments.
There is genuine growth in Greater
China as well as South-east Asia in
terms of the middle class and mass af-
fluent, adds Wong. They need more
assistance in their investment decisions
and portfolios.
WEALTH MANAGEMENT IN ASIA 2016
New approaches to
investment models
The results of a recent survey
by SSGA, entitled Building
Bridges, highlights how retail
and institutional intermediaries
can access new approaches, such
as Smart Beta and objective- or
needs-based investing, to have
any chance of meeting their long-
term return goals.
Some of the key findings include:
High return expectations
institutional investors are
expecting a 10.9% return
over the next five years and
are pressed to find them
in todays lower-for-longer
environment
Need for change 97% of
respondents expect moderate
to significant change in the
industry. New approaches are
required in todays lower-for-
longer return environment to
meet these objectives.
New investment approaches
investors confronting
performance shortfalls are
re-assessing their overall
investing approach to better
target drivers of performance
and to ultimately adapt to
what is believed to be the
new norm
Historically driven by asset
classes, the survey results show
that many investors are looking
to objective- and factor-based
investing to meet performance
shortfalls.
As a result, the investment
paradigm is shifting from
the top-level asset portfolio
construction perspective to
specific implementation of these
new approaches using the
efficient ETF vehicle.
161
EXPERT INSIGHTS
Driving a needs-based
conversation
Shikha Gaur of Aon Hewitt explains the role of advice in guiding expat clients in
Singapore, and explores how the role of robots in the process must push professionals
to up their game.
For many investors, the investment world
seems daunting and perhaps overwhelm-
ing when they first start to learn about
it. Then, when they consider investing
outside of their comfort zone, perhaps
in a country whose system is unfamiliar,
yet more uncertainty creeps in.
This is exactly the type of anxiety that
Shikha Gaur, executive director of wealth
management at Aon Hewitt, is in the
business to quell. Her clients include
expatriates in Singapore, and its her job
to make sure theyre guided through the
investment process.
So, whats the first step? According to
Gaur, it shouldnt start with anything to
do with an investment. And with her
12-strong team, she focuses on getting
the basics right first a lesson that more
advisers in the market need to heed.
Our conversation doesnt typically begin
with investments, she explains. It starts
with something broader in terms of what
162 WEALTH MANAGEMENT IN ASIA 2016
[the client] is trying to do from a longer
term perspective.
With expats in Singapore, therefore, that
means digging into what has brought
them to move to another country in the
first place. There is then a place for dis-
cussing how investments, in the context
of that individuals financial history, can
help in meeting those goals.
A client doesnt usually have an invest-
ment need, explains Gaur. They have a
purpose that they are trying to [achieve].
ADVICE FIRST
Aon Hewitt, headquartered in London, SHIKHA GAUR
Aon Hewitt
provides HR consulting services, cover-
ing talent, performance, rewards and
retirement solutions.
Specific to the investment business, it
deals both with individuals and corpo- insurance requirements. We are not
rate clients that pay for advice. From pushing a product, urges Gaur. We will
there, it can place funds, manage invest- give clients the advice and they could
ment portfolios, or help with clients walk away and do it themselves.
In this way, the firm has a clear long-term
focus. It can be challenging selling fee-
for-advice over a commission-based
model associated with the sale of product,
which is commonplace in this market.
However, Aon Hewitt is convinced that
the value of advice will start to count
sooner rather than later, despite the
digital disruptors.
One of the reasons for this belief, says
Gaur, is the need for education. This
has become even more important given
the complexity of the industry and
often limited transparency in Asia.
LONGER TERM PLANNING
Working with an expat client base
brings with it specific requirements in
terms of the advice that Gaur and her
team need to offer.
I think [the industry] will rapidly change because, if
[digital is] done correctly, it will create awareness [of the
need for advice] and people will be more savvy.
As citizens of at least one other country
and living in another, she says they have
fairly complicated tax needs. It is critical
that these taxation needs, along with
other financial needs, are captured in
an individuals investment portfolio.
Now, there appears to be an increasing
expectation for companies to provide
more holistic wellness benefits - a com-
bination of health, fitness and insurance
features, to their workforce. This is no
different for the expatriate population
in organisations.
Their other needs are simply dictated
by the times.
We are finding that there is an increas-
ing need [in Singapore] for corporates
to put in retirement plans for their em-
ployees, says Gaur.
As a hot topic, corporates now need to
review any existing schemes they might
have for their employees. They are
looking to provide equitable benefits
for their employees, she explains.
Gaur also believes there is a pressing
need to include women in retirement
discussions. [Women] are out of the
workforce for reasonable amounts of
time due to other commitments, she
says. They typically dont earn as much
as men in similar roles, but they have
longer lifespans.
Research in 2015 conducted by Fidel-
ity Investments, for example, suggests
that women save more money than
men; and some other studies which
have been done point to women being
slightly better at investing than men.
Gaur stresses that retirement education
needs to be universal; even someone
who puts aside 10% to 20% of their
income for retirement assuming they
start this early enough can make a
huge positive impact on their future
down the road.
There is a need to start teaching about
money at a younger age, she says. In
schools, it could be mandatory to have
subjects related to money.
FINTECH IN THE MIX
The reach and accessibility of financial
education is increasing all the time in a
market like Singapore, which has a well-
populated fintech start-up scene.
But when it comes to the broader goal
of providing advice, robots are a bit of
a way from doing the job of firms like
Aon Hewitt at this stage.
Saying this, Gaur does see digital-led
disruption as being a distinct possibil-
ity going forward.
I think [the industry] will rapidly
change because, if done correctly, it
will create awareness [of the need for
advice] and people will be more savvy.
They will know what to look for, and
they will know what to ask for when
looking for the next level of advice.
As a result, professionals in the wealth
management business must make sure
they stay relevant for their customers.
As an industry, we could have mentor-
ing programmes in place, she says.
That means apprenticing up-and-coming
individuals with those who have good,
old-fashioned experience, and factoring
in that a good portion of customers are
in the younger generations.
In terms of making it exciting, I think
it is important to represent the diver-
sity that the industry has, adds Gaur.
In other words, there is a need to
balance out greying bankers with some
younger blood.
WEALTH MANAGEMENT IN ASIA 2016 163
EXPERT INSIGHTS
No room for complacency in
distribution
In the face of volatility stemming from Chinas markets, Brexit and global economic
headwinds, Alison Brown explains how HSBCs funds division is positioning itself for
growth across the entire landscape of wealth management distributors.
Expanding and diversifying its universe
of distributors in Hong Kong and China
has been a key goal for HSBC Global
Asset Management and the strategy
has had an increased focus since Alison
Brown came on board in mid-2015 to
run sales for the wholesale business in
Hong Kong and China.
The aim has been to expand beyond
HSBCs retail banking and wealth man-
agement business albeit this remains
the foundation distributor and integral
to the business. We understand the
benefits of broader distribution via third
parties, explains Brown.
Today, it is about working with more of
a cross-section of firms within retail
banking, with an eye to insurance com-
panies as well as third-party platforms.
Plus, to capitalise on Chinas opening,
developing the cross-border business
is another key goal. Last but not least
is servicing the private banks. We work
164 WEALTH MANAGEMENT IN ASIA 2016
with HSBCs private bank, which is also
important to us, and we are slowly ex-
panding our presence in this segment,
says Brown.
BEING RELEVANT
Despite the access that Browns busi-
ness has to HSBCs retail banking and
wealth management, she knows never
to become complacent.
In line with this, the past 12 months have
been dedicated to servicing the bank in
a way that can add more value to it.
This goes beyond simply rationalising
the product range, which is common- ALISON BROWN
HSBC Global Asset Management
place at the moment among her com-
petitors. The funds also need to be
competitive, and give the distributor
what it and its customers want at a
particular point in time, in order to fill
gaps they have identified. three foreign providers of funds to
service the inbound and outbound flow
China has been an obvious example. of wealth is an important ambition for
For example, becoming one of the top HSBC in the coming years.
We have an established network and
an advantageous position with HSBCs
presence in the retail space in both
Hong Kong and China, and work very
collaboratively with our joint venture
partner HSBC Jintrust in China, says
Brown. This plays to HSBCs strengths
because China has a high awareness
of the banks brand, particularly in the
Pearl River Delta.
This objective was given a boost in
December 2015 when HSBC Global
Asset Management announced its first
Mainland fund in Hong Kong under the
Mutual Recognition of Funds between
the Mainland and Hong Kong. It subse-
quently launched its second fund in late
June 2016.
The first offering, HSBC Jintrust Large
Cap Equity Fund, invests in Mainland
China large-cap blue chips; the second
fund, HSBC Jintrust Dynamic Strategy
Mixed Securities Fund, is a multi-asset
fund which invests in mainland assets
including stocks and bonds through
dynamic asset allocation.
SERVICE UPGRADE
In addition to product development,
Brown and her team have been working
on enhancing key components of the
service offering. These include: speed-
ing up the fund houses response time
to client enquiries, the quality of the
documentation, providing timely and
targeted updates, and giving clients
access to product specialists and port-
folio managers.
These features, combined with the flex-
ibility and willingness to provide alterna-
tive strategies, has created momentum
with third-party distributors especially.
Brown says this is important since there
is a time and a place for different funds
and fund managers, and as the firm
wants to be well-positioned irrespective
of the market environment. If we can
do a decent job in explaining our invest-
ment strategies and positioning our
funds in comparison to competitors, we
have got more chance of being consid-
ered in a portfolio.
For example, HSBCs capabilities on the
fixed income side have enabled the asset
manager to buck the trend of many com-
petitors finding it difficult to attract net
inflow in todays volatile environment.
The flagship HSBC Asian Bond fund cel-
ebrated its 20th birthday in July 2016.
RELATIONSHIP DRIVEN
Brown is very aware of the need to win
over fund gatekeepers as well as rela-
tionship managers within HSBCs target
distributors.
If you have good information and are
positioned well, they understand the
value we can add, she explains.
This requires her to maintain a sharp
focus on continuing to up-skill her sales
people, and ensure that what they give
gatekeepers is relevant and consistent.
It has also been important for Brown
to re-arrange the structure of the sales
team, to ensure that business develop-
ment people are trained in all aspects.
So even if one of them leaves the or-
ganisation, the team structure enables
others to have a clear understanding
of existing relationships with a par-
ticular distributor.
They can, therefore, ensure that gate-
keepers arent subject to being ap-
proached by yet another individual and
then having to start a conversation
from scratch.
The teams objective is to expand dis-
tribution across retail banks, insurance
companies and also on platforms that
are emerging, explains Brown.
We already have the advantage to be
able to leverage HSBCs extensive
network in Hong Kong and China, and
are looking to develop other distribution
channels to maximise our reach to cus-
tomers, she adds.
The firms investment in its recent mar-
keting campaign, Let Dreams Fly, also
helps in Browns distribution of funds
in Hong Kong.
People can understand more who HSBC
is as an asset manager a disciplined,
dependable, international and sustain-
able manager which is committed to
investing clients money with care, and
in line with their needs and expectations.
With an objective to build awareness
of HSBC Global Asset Management,
the campaign positions the firm as
stewards of imagination, where the
asset manager inspires people to
imagine their future and invest to make
it possible whether the future imag-
ined is their own, that of their business
or of their clients.
Our greatest strength is our client
focus: our first objective is to meet our
clients expectations, says Brown.
To do this, return is obviously impor-
tant, but just as important is how we
manage our clients money. We are one
of the few global managers with the
ability to understand and support ambi-
tions of individuals, corporations and
institutions with a full range of financial
services products, services and advice
that encompass todays needs as well
as future plans.
WEALTH MANAGEMENT IN ASIA 2016 165
FEATURE ARTICLE

Changing the rules of the

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

There is broad consensus among practi-

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

166 WEALTH MANAGEMENT IN ASIA 2016


see what the reaction is to
verify whether they are on
ing the single most important change
to make relationship managers (RMs)
less focused on pushing products.
I think we have got to the stage where
we need to start forcing this issue, says
Bacon. To an extent, all industry par-
ticipants have been trying to go down
this route over the last several years
and the results are not compelling in
terms of how much we have transi-
tioned to this mind-set.
He adds that changing the incentive
structure would be the most useful
change. If you incentivise on short-
term objectives you will always have
the mind-set of short-term product
push and instant gratification from a
revenue stand-point, he explains.
You need to say to people that you are
going to change your scorecard to be
about long-term client satisfaction and
asset growth not measured on a
month-to-month basis, but rather on a
year-to-year basis.
Perhaps the industry should look to tie
down RMs for longer periods? If an RM
joins a firm with the idea that they are
going to spend the next 20 years of
they advise their clients. This approach
demands courage on the part of senior
Clients are looking to management, adds Malik Sarwar, global
share their thoughts and head of sales management, group
wealth management at HSBC.
the right track or not. Transactional RMs are not likely to be
happy, but that is fine because it is part
of a strategic plan, he said. Those
clients who feel that they were being
ANTHONIA HUI
pushed products will be happier and if
AL Wealth Partners
the institution is getting more new
money coming in than flowing out, the
formula is working.
Transactional RMs are not likely to be happy, but
that is fine because it is part of a strategic plan.
their professional career there, for MORE EDUCATION
example, rather than focusing on build- Sarwar suggests that the industry has
ing a book, getting their bonus every become too complicated and that client
year and then moving on, that will po- education is paramount. Each asset
tentially have a profound effect on how class goes up and down every year, but
WHAT IS THE MOST IMPORTANT CHANGE TO MAKE THE
CUSTOMERRM INTERACTION BECOME LESS FOCUSED ON
PRODUCT PUSHING?
75%
RMs need to beer understand
client goals and risk appete
Change incenve structures
Diversify the product offering
10%
15%
Source: Hubbis - Asian Wealth Management Forum 2016, Hong Kong
WEALTH MANAGEMENT IN ASIA 2016 167
FEATURE ARTICLE

portant, but I think we have a sub-set

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

18% to sell these soluons

You have to start with RMs being better
Changing fee models educated to sell the solutions; if they
Beer plaorms and are leading the right sort of strategic
infrastructure
conversation you have a better chance
6%
41%
Source: Hubbis - Asian Wealth Management Forum 2016, Hong Kong
[Asset managers] should not focus on short-term
themes and hype but bring good for clients.
if you take a 10-year average return and
risk, clients can relate to that, he says.
If you take some of those things and
explain them to clients without being
condescending, you are building a re-
lationship to make sure that the client
understands how markets behave.
However, to get to the point of creat-
ing better conversations between
advisers and clients, again fee models
need to change.
If they dont, how can senior manage-
ment incentivise or motivate the RM
to have that discussion without having
the pressure that he needs to do some
sort of transaction?
If the client is getting the wrong message
from the RM at the start of the conver-
168 WEALTH MANAGEMENT IN ASIA 2016
Client educaon
sation, the opportunity has been lost,
adds Bacon.
I dont think it starts with the client
necessarily. The client is hugely im-
Transactional RMs are
not likely to be happy
[with changes in incentive
structures], but that is
fine because it is part of a
strategic plan.
MALIKARONNA
JUAN SARWAR
HSBCWealth Management
RBC
of getting the client to be thinking more
long term and more strategically.
TOWARDS NEEDS-BASED
CONVERSATIONS WITH
CLIENTS
The desire to develop more needs-
based solutions for clients in Asia clearly
seems to be a process which will take
time perhaps another five to 10 years
according to some estimates.
It is happening in the US and Europe,
but for Asia it is unlikely to be one thing
that drives change.
Instead, says Harmen Overdijk, manag-
ing partner of Caidao Wealth, it will be
a combination of the regulatory envi-
ronment, the willingness of the banks
and asset managers to embrace a dif-
ferent approach, and the acceptance
among clients.
WITH SO MUCH VOLATILITY AND UNCERTAINTY - WHAT
SHOULD BE THE MAIN TALKING POINT FOR ADVISERS TO
FOCUS ON TODAY?
38%
Performance and track record
Diversifica
on benefits for relationship managers to
to the por olio
13% The service levels offered
by the manager
Ease of explaining the
13% strategy to clients
36%
Source: Hubbis - Asian Wealth Management Forum 2016, Hong Kong
There also needs to be an education positions within the portfolios, advis-
process to initiate discussions about ers need to go back to doing proper
such needs-based solutions. Many portfolio analysis first, position by
clients, for instance, dont really know position, to be able to deliver very
what to expect from their portfolios in targeted advice that is, by definition,
terms of investment returns. needs based.
In practice, in the current environment, Documentation of advice is clearly
advisers need to focus on clients exist- critical, as is the provision of materials
ing portfolios, rather than continue to to help clients fully understand every
try to engage clients with new ideas. investment before it is made, and then
how that investment is likely to perform
Though these might be part of the under the very broad range of circum-
solution for replacing or reinventing stances through the life of the product.
[Banks] need to ensure
that the interest of the
clients, as well as those of
the asset managers and
themselves, are aligned in
this way.
HARMEN OVERDIJK
Caidao Wealth
The development of
digital advice platforms
When it comes to digital advice
platforms, there is big potential
use technology to help them
get quicker access to more
information and more
relevant data than if they
had to do the research
themselves.
In particular, wealth
management institutions are
increasingly focusing on a few
key areas where digital advice
can help them.
This is aimed at supporting
their bankers in having better
communication with their
clients, and giving them more
personalised advice which is
also more consistent.
Probably the most important
benefit is that they can be a
lot more productive in terms of
being able to speak with more
clients, and more frequently, to
give them the right advice at
the right time.
At the same time, the banks must also
adapt their incentive structures, to think
longer term, adds Overdijk.
They need to ensure that the interest
of the clients, as well as those of the
asset managers and themselves, are
aligned in this way, he explains.
That will finally drive the change in
thinking needed to lead to a new busi-
ness model for wealth management
in Asia.
WEALTH MANAGEMENT IN ASIA 2016 169
EXPERT INSIGHTS

Facilitating a more conducive

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

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

will gather steam more throughout he explains.

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

170 WEALTH MANAGEMENT IN ASIA 2016

Talbot says the firms breadth across
assets classes via real estate, fixed
income, equity, multi-asset and alter-
native investments combined with
more than USD427 billion invested on
behalf of its customers, gives it the
size and scale to successfully see out
opportunities that will deliver spe-
cific investor outcomes.
The investment aspirations and con-
cerns that the outcomes try to deliver
on might range from individuals saving
for retirement through to the largest
institutional investors.
On the Aviva Investors website,
Munros message defines the approach:
At Aviva Investors we believe it is time
I can only hope this [focus on advice and
longer-term investing] happens
sooner rather than later.
to think differently. Thats why our
entire organisation is united behind
one common goal: to deliver the spe-
cific investor outcomes that matter
most to todays investor.
MEETING INVESTOR GOALS
The multi-strategy target return funds
Talbot markets out of Singapore targets
cash-plus 5%.
The target income fund, meanwhile, is
focused on cash-plus 4%. The aim is to
achieve these returns with significant-
ly less volatility compared to global
equity markets.
Research the firm has done has shown
that over 20 years, the risk premia in-
vestors can expect from global equities
is around 5%. Our rationale, therefore,
is to try to achieve this via a portfolio
which does that, but with one-third to
one-half the volatility of investing in
global equities, he explains.
This is a key selling point, believes
Talbot, given the combination of
volatile markets over the last 12
months, plus the expectations about
continued uncertainty as a result of
geo-political events like the US elec-
tions, Brexit and others.
Among another key value-add of these
strategies for clients is that, unlike the
dynamic asset allocation approach
which is dependent on being in the right
sector at the right time we believe
that because nobody can predict the
future, our outcome-orientated solu-
tions approach will produce superior
risk-adjusted returns over any type of
business cycle, says Talbot.
NEW MIND-SETS
The more that the market in the region
moves towards more of a longer-term
approach to investment portfolios,
then the greater the likelihood that
the multi-strategy concept will start
to flourish.
A range of outcomes at
Aviva Investors
Sustainable income
low bond yields and high
equity valuations mean
that outcome-focused
approaches could secure
the regular investment
income todays investor is
looking for.
Capital growth
as the risks of a market
correction grow, switching
to investments designed
to provide steady capital
appreciation makes sense.
Beating inflation
despite a recent sharp
fall in inflation rates,
unprecedented monetary
stimulus still poses a threat.
Inflation-proofed funds
continue to represent an
attractive investment.
Meeting liabilities
the natural extension
of an outcome-oriented
investment approach is to
help institutional investors,
such as pension schemes
and insurance companies,
to meet their long-term
liabilities.
And for Talbot, whose main role at
Aviva Investors is externalising the
business and its capabilities via third
parties, he sees a lot of growth poten-
tial in the region.
We manage about USD5 billion in fixed
income out of Singapore at the moment,
and I would like to think this can double,
or more, over the few years, he says.
WEALTH MANAGEMENT IN ASIA 2016 171
EXPERT INSIGHTS
The changing landscape of
overseas property: China factor
The already-large wave of wealthy Chinese buying residential and commercial property
around the world is only expected to gather momentum, despite government measures
to temper demand, says Piers Brunner of Knight Frank.
According to the Knight Frank definition
of upper middle class, there are 63
million Chinese who fit into this catego-
ry. And they are active in the interna-
tional real estate market, despite the
countrys USD50,000 capital control
per person per year.
They are motivated to buy offshore by
factors such as education, immigration,
diversification of portfolios and curren-
cies, and lifestyle changes are all key
drivers for wealthy Chinese to look
outside their own country, explains Piers
Brunner, chief executive officer for
Knight Frank in Greater China.
Plus, the sales process is very much
driven by relationships and education.
FEELING THE IMPACT
The effect of the mass of money finding
its way into certain property markets
has led to rapid price movements in
these locations. For example, says
Brunner, Vancouver was up 24% last
172 WEALTH MANAGEMENT IN ASIA 2016
year, Sydney 11% and Melbourne 11%.
Yet this can also have a social impact, he
adds. For instance, some investors buy
up units and then leave them vacant,
which has a knock-on effect in terms of
rising rental prices in local areas.
At the same time, some governments
have taken action.
For example, the UK, has increased
stamp duty; Australia has reviewed
foreign investment policy, and immigra-
tion barriers are rising.
GATHERING PACE
According to Brunner, this trend is just PIERS BRUNNER
Knight Frank
starting and has a long way to run in
terms of more Chinese money heading
to overseas property markets.
In addition to the US and various
gateway markets, one of the next waves But he also foresees governments
he predicts will be investment into trying to defend their markets against
secondary cities, such as Manchester such price rises, via measures to at
in the UK, or Seattle in the US. least try to temper demand.
WE DONT
JUST OFFER
INVESTMENT
SOLUTIONS,
WE DESIGN
THEM.
At Principal Global Investors, we believe that successful investment solutions are as
unique as the clients we serve. Our multi-boutique asset management structure provides
our clients with a single point of access to custom-designed investment solutions.

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

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

For more information visit www.principalglobal.com

2015 Principal Financial Services, Inc. | AD2560-02

FIRM PROFILE
How Credit Suisse is leading an
Asian asset management charge
With a mandate to capitalise on the opportunity that Asias wealth demographics
presents, Credit Suisse Asset Management plans to leverage its own private banking
strengths across multiple distribution partners and markets, reveals Michael Levin.
Having a clear business strategy should
mean that volatile and unpredictable
markets are, in fact, an opportunity to
provide more value-added services and
investment solutions to clients.
We see a renewed awareness of the
inherent risk in markets, says Michael
Levin, head of asset management for
Credit Suisse in Asia Pacific.
You dont make double-digit returns
without potential downside risk or
volatility, he adds.
This has played out in recent years.
From 2009 to 2013, and then again in
2014, high correlations and strong di-
rectional performance for both equities
and fixed income meant that the more
risk investors took, in general, the more
money they made.
This also meant that passive strategies
performed well relative to active strat-
egies, since there was little value to
174 WEALTH MANAGEMENT IN ASIA 2016
add from the security selection or from
risk management.
There is a shift today, however, with
volatility heightened and lower correla-
tion among securities. In Levins view,
therefore, active management through
fundamental stock and credit selection
as well as risk management will make
the difference in the performance real-
ized by investors. This gives us an op-
portunity to deliver relevant solutions
to clients.
LEVERAGING RELATIONSHIPS FOR
NEW GROWTH
This plays to what Levin says are key MICHAEL LEVIN
Credit Suisse strengths hedge funds, Credit Suisse
real estate and traditional as well as non-
traditional fixed income, such as Asian
corporate bonds and senior loans. And
it explains why the firm is increasingly
focused on broadening its offering and Until about two years ago, the firm had
relationships, both across the region a fairly limited asset management en-
and via different institutions in the gagement in Asia in terms of selling its
wholesale distribution space. funds through third-party private banks.
Third-party distribution is one of our
major initiatives for 2016 and going
forward, and we have invested a tre-
mendous amount in terms of commu-
nication, relationship building, and
making our offering relevant for poten-
tial partners, explains Levin.
At the same time, the firm benefits from
being able to leverage the insights that
it garners from the direct relationships
it has access to via its own wealth man-
agement offering.
While Credit Suisses private bank oper-
ates on an open architecture model, the
advantage mainly comes from the prox-
imity and closer connectivity that the
asset management division has to the
banks relationship managers, as well
as its clients.
We are able to better articulate the
benefits and risks of various invest-
ments, says Levin.
And I feel that the more informed the
view that we share with clients, it makes
them more durable investors, in order
to stay invested through good and bad
periods to get the benefits of a long-
term investment approach, he adds.
Tied to this is the added bonus of being
able to get closer to clients in terms of
communication during periods of stress.
We are in the process of determining
a select group of the best distribution
partners and the products that are most
relevant to their clients, says Levin.
But looking at Asia generally, with
Singapore becoming a leading wealth
centre globally, plus the influx of capital
from Greater China, it is hard to think
of a better opportunity than to take an
institutional asset manager with an
established relationship with its own
private bank and offer investment solu-
tions, products and services to third
parties as well.
ESSENTIAL SUPPORT
Inevitably, getting traction with third-
party private banks is never easy, espe-
cially in such a competitive landscape.
A priority for many of these institutions
is more support, beyond getting the
product approved.
This is especially the case at the outset
of the relationship, when they start to
promote a fund.
At such times, they need a lot of guid-
ance, requiring the fund manager to
present to the banks front-line advisers
as well as portfolio managers, and
answer their questions.
They also need regular communication
on an ongoing basis, as part of the
support they might require for their
end-investors.
Another hurdle is the limitation to
having conversations with Asias
wealthy about funds, given the ongoing
challenge to raise their penetration as
a percentage of AUM overall.
Addressing this, says Levin, requires
conversations to be about investment
solutions that match client needs.
This calls on the client adviser to have
greater awareness of the set of offerings
relevant to the client.
So, I view our first job as being educa-
tion, explains Levin.
It is not about selling products; its
about identifying the right products
that are suitable for the right clients to
deliver an investment solution that
creates a good client experience.
A SOUND SET-UP
Levin certainly doesnt expect growth
in Asia to be plain sailing, especially
given the number of established players
and platforms.
Yet he is spurred by the fact that, in
many cases, existing platforms have too
many products.
Many third-party distributors are ra-
tionalising the products available on
their platform, says Levin.
As they shrink the number of counter-
parties they work with, and the number
of funds they offer to enable a greater
degree of focus on the sales effort, we
have to make a strong and credible case
of the value-add of our products and
solutions to justify replacing someone
on the platform.
As a result, Credit Suisse has been in-
vesting in building up its product spe-
cialist team as well as its pool of local
portfolio managers.
Offering that access in the Asian time
zone is a material differentiator, ex-
plains Levin.
This combines to form a multi-boutique
model which is focused on specialised
investments and relevant expertise,
sitting within a broader governance
framework which is the institutional
infrastructure of Credit Suisse from
the operational, legal, compliance and
regulatory perspectives to navigate
local geographies.
We think this gives us the best of both
worlds, he adds.
WEALTH MANAGEMENT IN ASIA 2016 175
EXPERT INSIGHTS

Facing up to the regulatory

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

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

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

176 WEALTH MANAGEMENT IN ASIA 2016

dent assessment is needed to see if
structures set up 10, 15 or 20 years
ago, for example, are still up-to-date.
The challenges start, for instance,
where clients may have possible tax
information that was not documented
as there was previously no requirement
to do so in a particular jurisdiction.
As a result, filing that taxable informa-
tion becomes impossible, says
Manatschal, because there is no docu-
mentation to back it up.
TAKING A COMMON SENSE
APPROACH
Amid all of these new developments,
Manatschal says it is critical for organ-
isations to adopt a common-sense
approach. And this is unlikely to entail
any easy way out.
The first mistake is to believe that
nothing has changed that you can
simply continue to do now as we did
in the past, he says.
By contrast, changes in regulation and
structuring mean major changes both
in terms of the way in which firms do
business, and how clients approach
their portfolios.
In short, they need to face up to the
new realities of lower returns, higher
risk and greater volatility.
Its this type of philosophy which Swit-
zerland, where Manatschal is based,
has taken to implementing new
changes. While this has created a stir,
he believes that the ultimate result will
be greater longevity and stability for
more organisations. And any business
which gets lost in the transition is a
small price to pay.
TEAM EFFORT
PwCs experience with clients around
the world can only be an advantage
going forward, says Manatschal.
While Russia is his teams focus for now,
he sees this shifting to Asia in time as
well. An entrepreneur in Russia is not
much different from an entrepreneur
in South America or China, he explains.
They all have the same basic ques-
tions and share similar concerns
about their families, their personal
safety and how their business works
within the local rules.
This also serves as a reminder that no
single person cannot tackle these prob-
lems alone; it takes a team.
Thats simply a reality because it is
impossible to have a one-man show and
be an expert in everything, he explains.
For example, many of the structures
previously put in place were unregu-
lated, so now need a lot of attention
given they are coming under the regu-
latory spotlight.
Taking a practical, pragmatic attitude
helps at times like these, adds Manatschal
which means deciding between what
to retain and what to either change or
let go to secure ones future.
His work in Russia has shown him the
importance of avoiding complexity.
Keeping business methods straightfor-
ward not only helps to withstand
change but it is also an advantage when
it is time to submit paperwork for
taxes, he explains.
Yet he believes that for many clients
in Asia, where regulation is still in the
Avoiding common
mistakes
In general, many clients dont
seem to understand the full
magnitude of the potential
problems they face.
One of the common mistakes
many clients make when thinking
about their tax and reporting
situation relates to mind-set.
The first mistake, explains
Manatschal, is they believe
nothing has changed, and that
they can simply act as they did in
the past for example, change
their contracts and structures.
But this doesnt work, as
substantive changes are often
required, including to their
lifestyle.
Or, they might have to accept
that they will pay more tax.
Another mistake he sees is when
people ignore the requirements.
And because they do this, they
are not dealing with the situation
in the way they need to.
One of the consequences
for such clients who arent
committed to being compliant, is
they will find it difficult to find a
reputable service provider willing
to work with them.
works, they may not face the same
amount of restructuring.
But they should, however, still listen
to such advice, to keep in mind to avoid
costly, time-consuming work in the
future.
WEALTH MANAGEMENT IN ASIA 2016 177
EXPERT INSIGHTS
Plugging a gap for long-term
structuring advice
Nigel Rivers has been inspired by a lack of real advice in navigating todays complex
regulatory, asset structuring and succession planning landscape. He expects his new
firm, Capital Solutions, to fill a hole in finding the right solutions for each client.
Despite the economic challenges and
general slowdown globally since 2008,
Asias wealthy have seen continued
growth in their personal wealth. And in
turn, they have increasingly sought
geographic diversification and a wider
array of asset classes.
Yet in the face of these families growing
needs to manage business and per-
sonal wealth, service providers dont
seem to have made as much of this
opportunity as they might have given
that they typically operate in silos.
For instance, explains Nigel Rivers,
founder of newly-formed Capital Solu-
tions, private banks and the new breed
of multi-family offices tend to mainly
focus on bankable AUM. However, most
family wealth resides in less liquid
assets, such as the family business or
in real estate.
When it comes to tax and legal advisers,
while they have increased in number as
178 WEALTH MANAGEMENT IN ASIA 2016
well as quality, the roles they play are
still very transactional. They charge a
fee for a specific service, but have little,
if any, ongoing involvement.
Meanwhile, insurance companies tend
to provide a product offering related to
estate planning, mostly still focused on
universal life.
And independent trust companies often
only provide a relatively limited scope
of services.
As a result, there is a role for an adviser
who is genuinely independent rather
than product specific, but who also has NIGEL RIVERS
Capital Solutions
sufficient knowledge and experience of
all the tools available to families.
Families need someone who can
provide advice and guidance on what
is best for them and their specific CATERING TO REAL NEEDS
profile, he adds, and can ensure this Rivers has his sights on opportunities
is properly implemented in a rational, in both North and South Asia. Out of
consistent and independent way. his office in Hong Kong, he will service
local clients, as well as those from main-
land China and Taiwan. His Singapore
office expects to work with clients from
countries like the Philippines, Indonesia,
Thailand and Malaysia.
He is confident that the independence
of his new firm will mean he can help
clients to identify those professional
services firms which are best-of-breed
technically, and also aligned in the way
they work, to the specific needs of each
client. Its advisory, first and foremost,
he stresses.
This covers a range of services, includ-
ing wealth asset structuring, succession
planning, family business governance,
compliance and reporting, and family
office architecture.
For example, broadly across South-east
Asia, he sees a big difference in terms
of the current wealth owner being older.
As a result, they are more likely to be
at the point where they are transition-
ing the ownership of the family business
and their wealth to the next generation.
You need to be independent to help in these cases....
It requires knowledge and experience of these issues, but
also the ability to offer different solutions for discussion.
In such a situation, the business might
have been built up 40 years ago or more,
and there are often a number of chil-
dren, some of whom work in the busi-
ness, others dont.
Some of the common issues that need
to be addressed, therefore, include how
to transition the business ownership
and decide who should participate in
management, while at the same time
making sure the family gets a fair dis-
tribution of the income the business
makes when the patriarch dies.
Further, the solution must also ensure
that money is fairly distributed to all
family members, regardless of whether
they are in the business or not. You
need to be independent to help in these
cases, says Rivers. It requires knowl-
edge and experience of these issues, but
also the ability to offer different solutions
for discussion, so that the family can
decide what suits them best.
Another reason a truly independent ap-
proach is essential in todays environment
is tied to the complex compliance regime.
For instance, wealthy families want to
invest in assets in other geographies, so
must understand how to do this and be
compliant, given the financial and repu-
tational consequences otherwise.
So if a family wants to buy real estate
in the US, for example, which structure
is appropriate, and what reporting they
must be aware of (in the US and at
home), are essential elements to know.
Helping families avoid making mistakes
during these and other situations is also
a critical role for Rivers new firm to take.
These often happen because families
dont consider the options early enough.
They need to do this before the patri-
arch or matriarch dies, or are no longer
able to make rational decisions, or before
family members get disgruntled and start
fighting, he explains.
NETWORKED MODEL
A big part of the value that someone
like Rivers can provide wealthy families
in Asia is to ensure they can access the
right professionals. They shouldnt rely
just on their private banker for this, nor
even the advisers to their business.
However good their advice has been in
relation to their specific field, there are
special dynamics to creating and man-
aging an infrastructure for legacy
wealth. It is important that the family
gets the best help, he adds.
Instead, it is vital that families are able
to look at the big picture and explore
their options, and ensure they are acting
in the most effective and optimised way.
While we are small, we have the cred-
ibility thats required by the people who
recommend us to their clients in the
first place, says Rivers. Clients are able
to tell the difference between someone
who can genuinely offer advice in a
common sense and independent way.
By getting this type of offering right,
the relationship with the client can also
become a bit stickier. In turn, it will
enable him to charge for his service.
Historically there has been an aversion
in Asia to paying fees for advice. But I
think thats been changing in the last
few years, and I believe people are much
more prepared to do this if they see the
value, he explains.
The fact that there is growth in family
offices around the region, especially in
China, is proof for Rivers of this change
in mind-set towards advisory.
WEALTH MANAGEMENT IN ASIA 2016 179
EVENT HIGHLIGHTS - INDIAN FAMILY WEALTH FORUM 2016 - APRIL

Managing Indian family

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

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

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

HNW individuals and families in India

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

This also means that they favour organ-

isations that use technology for
maximum impact.

180 WEALTH MANAGEMENT IN ASIA 2016

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

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

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 181

FIRM PROFILE
Shedding light on the anatomy
of a family business
Running a family business successfully is not just about lineage, creating a need
for a range of services that Heritage Trust Group is offering to fill some potentially
problematic gaps.
Running a family business is highly-
complex, challenging and emotional.
Getting it right, therefore, depends on
a host of factors that most entrepre-
neurs either dont have time or the ex-
perience to focus on.
This is the opportunity which Heritage
Trust Groups new family office ser-
vices unit has identified. It is an add-on
to the corporate and fiduciary services
offering it provides across Asia and the
BVI, including incorporation, business
services, estate structuring and suc-
cession planning.
Basically, we want to look very holisti-
cally into business families, says Hans
Diederen, head of this new division at
Heritage, to increase the success rate
of business continuity and, at the same
time, family harmony.
A SOLID STARTING POINT
In line with the dynamics of Asian family
businesses, coupled with the overlap-
182 WEALTH MANAGEMENT IN ASIA 2016
ping nature of business and personal
wealth, there is plenty to be done to
align affairs for the future.
In Diederens opinion, family offices are
best equipped to survive if they have a
strong foundation, starting with a shared
understanding about why the family is
in business together in the first place.
This is often under-estimated, he says.
Advisers such as lawyers, accountants
and even philanthropy specialists ap-
proach the family from their specific,
expert angle, but tend to forget that the
family is intra-dependent.
HANS DIEDEREN
A strong foundation, however, pre- Heritage Trust Group
pares the family for when its time for
the baton to be passed to younger
generations. Succession is regarded
as an event, but this only happens once
in a generation, explains Diederen. Given that family values can quickly
Its the process and the timely plan- become intertwined with corporate
ning of the preparation of this process ones, such planning must take both sides
that is most crucial. into account to succeed.
FIRM PROFILE
ANGELO VENARDOS
Heritage Trust Group
Yet in dealing with people who have
worked hard to create a successful
business and at the same time bring up
their family, agreeing on a set of con-
sistent values is easier said than done,
especially with generational differ-
ences to consider.
Angelo Venardos, chief executive officer
of Heritage, recalls a recent example of
this in Indonesia. We met with three
generations of the family over five hours,
discussing all types of matters. At the
end of these conversations, one of the
brothers quietly said that he didnt agree
with the current shareholding.
This type of problem needs to be figured
out earlier, so that all parties involved
can seek the guidance they need.
This really requires a third party with
which the family has a relationship to
sit down patiently and work it through
with them, says Venardos.
A GAP TO FILL
Heritages independent role puts the
firm in a good position to do this, be-
lieves Diederen, as this means it gets to
hear what maybe bankers and financial
advisers dont.
This is especially important amid the
particular challenge that families face
today in light of the characteristics of
the millennials generation.
While every generation differs from the
one before it, millennials have grown up
in a more globalised environment with
rapid technological change.
This generation has studied abroad and
worked around the world, so they are
developing different values, and this can
Its the process and the timely planning of the
preparation of this process that is most crucial.
alienate them a bit more from the pa-
triarchs and matriarchs than has hap-
pened in the past, explains Venardos.
This is one of the ways he and Die-
deren are looking to help: offering
advice for a fee, in addition to other
services and solutions once the needs
have been identified.
Diederens approach is to tailor the
message, depending on which genera-
tion he is speaking with. I think my
major task with the second generation
[of millennials] is to guide and prepare
them to probe their parents with the
right questions to address the succes-
sion planning challenges. This is an issue
he commonly refers to as the elephant
in the room.
But not being prepared can have sig-
nificant consequences. Not having a
basic will, let alone a trust structure
in place, creates huge challenges
which families probably wont find
until they go to the bank, and the bank
says that everything has been frozen,
explains Venardos.
THE FAMILY NICHE
For Heritage, family office services rep-
resent a significant opportunity but
one which will take time to realise as
the firm looks to carve out this niche.
This is due, in part, to the fact that dif-
ferent countries are at different stages
of development and awareness in terms
of the need for more formality around
managing the family business.
But it is an invaluable component of
the advice the firm gives overall. It
accelerates the discussion within the
families to do something to review
what has been in place and, by bringing
the generations closer together, it
forces also the patriarch to not leave
the next generation with any legacy
issues, explains Diederen.
WEALTH MANAGEMENT IN ASIA 2016 183
EXPERT INSIGHTS
Greater transparency raises
privacy and advice red flags
The aftermath of many data leaks of greater tax compliance around the world also
threatens the privacy and confidentiality of the majority of individuals who legitimately
use offshore structures, explains Stephanie Jarrett of Baker & McKenzie.
As politicians scramble to further
tighten the noose around tax evasion
and money laundering through far-
reaching measures like the Common
Reporting Standard (CRS), Automatic
Exchange of Information (AEOI) and
FATCA, this sudden urgency to enforce
compliance, although desirable, may
have gone too far.
And, in their zest to ensure transpar-
ency, lawmakers may be ignoring the
bad side of transparency; or information
going astray.
I think going forward there is going to
be a lot of transparency because of CRS
and FATCA, but this has a good and a
bad side, says Baker & McKenzies
Stephanie Jarrett, a Geneva-based
partner who specialises in trusts, estate
and international tax planning.
The positive aspect is that many people
now realise they must pay their taxes.
184 WEALTH MANAGEMENT IN ASIA 2016
On the flipside, however, regulation has
arguably gone a step too far.
There are legitimate reasons for
wanting confidentiality of information,
adds Jarrett. Some of the transparency
measures are causing considerable
physical danger as well as business
disadvantages to many people.
KEEPING INFORMATION IN THE
RIGHT HANDS
A real threat that has not been the
centre of much attention to date, is the
fact that information could be passed
to people who use it for personal gain
or other questionable purposes. STEPHANIE JARRETT
Baker & McKenzie
For example, politicians might mis-use
data for arm-twisting; criminals, on the
other hand, might be able to access in-
formation and use it to threaten some-
ones physical safety. Further, leakage of At the same time, Jarrett says the prime
sensitive materials to business com- concern of many wealthy clients, regard-
petitors could also be damaging. less of their geography, is the security
of their assets because of geo-political
uncertainty globally.
As a result, while sharing information
with tax authorities is clearly justifiable,
there is a pressing need to ensure it is
kept confidential, and used solely for
tax compliance.
The other major concern for clients,
adds Jarrett, is preserving their wealth
and passing it on to the next generation.
This, too, is becoming more and more
of a challenge given the transparency
which is now required of various struc-
tures, she explains.
While sharing information with tax authorities is clearly
justifiable, there is a pressing need to ensure it is kept
confidential, and used solely for tax compliance.
Consider the following: laws today often
allow a claim on family assets to two
people living together for a certain
amount of time without them being
married.
Other areas of complexity could also
stem from multiple marriages in a
number of different jurisdictions, and
due to any children from those mar-
riages, including issues of illegitimate,
adopted and step-children.
More attention needs to be paid [by
wealth managers] to the overall plan-
ning for the preservation of wealth,
explains Jarrett.
Otherwise, she explains, clients are
more likely to start to face litigation or
tax issues with structures because of
greater transparency.
THE RIGHT ADVICE
The consequences of these regulatory
initiatives are increasingly impacting
the nature of wealth management,
which is slated to undergo a significant
shift going forward.
More specifically, says Jarrett, they will
limit the role for each type of adviser
manager - such as private banks, family
offices, independent asset managers
(IAMs) and lawyers.
For example, she adds, the increasing
risk of litigation has already led to many
private banks shying away from the
concept of actually giving advice.
Another big emerging challenge for
banks, trust companies and IAMs alike,
is how to manage the presentation of
mountains of documentation to clients.
At the end of the day, however, there
is no under-estimating the importance
of (re)establishing a close working rela-
tionship with clients, she advises.
While private bankers typically know
their clients well, when it comes to
offshore structures, she cautions about
the need for them to be discerning.
I think some of the offshore centres,
like Belize, are going to face a hard time
going forward. They risk being shut out
of the banking system if they dont play
the [transparency] game properly.
MAKING WISE CHOICES
Consequently, there is a need to choose
the offshore destination carefully.
This must be based on the tax regime
a client lives under, since this will dictate
whether or not an offshore company is
likely to be a good idea from a tax point
of view.
For a resident in Hong Kong or Singa-
pore, for instance, Jarrett says it makes
sense for them to hold assets outside
of those jurisdictions in an offshore
company; those markets do not con-
sider offshore accounts illegal.
At the same time, it is important not
to tar everybody with the same
brush, since this might lead to some
politicians and others in power to take
hurried decisions.
The solution, therefore, lies in looking for
a middle ground, says Jarrett, rather than
crafting rash laws that can lead to unfore-
seen or undesirable consequences.
A middle road regarding the ownership
of private companies, regarding to
whom information could be transferred
and what safeguards one could have,
needs to be found, she explains.
This can be done, she adds, if the
reasons for using so-called offshore
companies and other structures are
articulated more clearly.
WEALTH MANAGEMENT IN ASIA 2016 185
FEATURE ARTICLE

Making the most of

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

Yet as the China market continues to

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

186 WEALTH MANAGEMENT IN ASIA 2016

This is becoming more of a reality than
in the past.
While Chinas wealthy prefer to take a
predominantly active role in their in-
vestments, there are signs that more of
them are entrusting a larger share of
their wealth to private banks or inde-
pendent asset managers.
At the same time, HNW individuals in
China tend to prefer to hold less in cash
and deposits, and it creates a lot of op-
portunities for wealth managers who
offer professional advisory and invest-
ment services.
Clients in China have become much
more receptive to direct investment
opportunities and advice on alternative,
non-traditional investments such as
hedge funds and private equity, ex-
plains Brogle.
Perhaps most exciting for long-term
opportunities is the fact that in the
recent volatile environment, demand
by HNW Chinese for financial planning
and wealth structuring expertise has
increased. Whereas in the past, their
main investment objectives were to
grow their wealth and improve the
I dont see demand for wealth
planning diminishing instead,
sophistication is evolving
towards structures which are
more secure and transparent.
It is essential to provide
Chinese clients with a full
suite of wealth management
services including estate and
wealth planning, corporate
finance and real estate.
AMANDA CHEN
Nomura
quality of their lifestyle, now they are
more focused on the preservation and
transfer of wealth to the next genera-
tion, adds Brogle.
MORE STRUCTURING NEEDED
There are various drivers for Chinese
clients to engage wealth structuring.
According to Kevin Lee, partner at
Zhong Lun Law Firm, there are also
various concerns for Chinese HNW
clients to address. Key among them is
how to protect wealth. Constantly-
changing policies, uncertainty about the
future of the country, collateral damage
nance, some firms have found that
MARTIN CRAWFORD
Vistra Group
from the current anti-corruption cam-
paign, and potential future PRC estate/
gift tax will potentially subject their
wealth at huge risk, says Lee.
In China, most of our clients understand
the use of a will, but utilisation of other
planning ideas such as pre-nuptial agree-
ments or trusts or foundations are still
in the relatively developmental stage,
he explains. We have been advising
HNW clients on using such estate plan-
ning tools, but adapted to the PRC
context to the extent possible.
Another risk is family business succes-
sion. We see examples of children of
HNW individuals who are not keen to
take on responsibilities of family busi-
nesses, adds Lee. For family gover-
advising PRC clients on creating family
charters and setting up family councils
has been well-received.
Philanthropy is also a concept which is
gaining some traction among PRC
clients, although domestc laws are not
well developed yet in this respect.
When it comes to trusts, most of the
planning done to date has been based
WEALTH MANAGEMENT IN ASIA 2016 187
FEATURE ARTICLE
on offshore models where offshore
trusts own offshore assets.
According to Martin Crawford, chief
executive officer of Vistra Group, tax is
often around 25% of the driver for a lot
of the cross-border structuring out of
China. The rest is done for the pur-
poses of asset planning, family succes-
sion and diversification of wealth.
Clients accept they will pay certain
types of taxes at some point, he ex-
plains. They are just trying to minimise
it legally and use structures which are
more dependable.
Domestic PRC trusts are not being used
in any material way for such planning
yet, says Lee, and clients still face dif-
ficulties to inject onshore assets into
offshore trusts.
But subject to currency controls, there
should be growth in the offshore trust
market at least in the near term pending
the anticipated amendment of the In-
dividual income tax laws and possible
introduction of gift/inheritance tax.
Crawford is also optimistic for the op-
portunity to service Chinas wealthy. I
188 WEALTH MANAGEMENT IN ASIA 2016
dont see demand for wealth planning
diminishing instead, sophistication is
evolving towards structures which are
more secure and transparent.
To play a role as more Chinese wealth
moves offshore in search of protection
and other wealth solutions, Roger Steel,
president, new markets and business
development for Sun Life Financial in
Asia, says there are some key ways to
do this. Product not an issue; as always,
its first and foremost about distribu-
tion, he explains.
In addition, firms need to understand
the onshore market, which is shifting
to protection, and be able to manage
within the changing regulatory and
enforcement environments. Regulation
is driven by macro-economic consider-
ations, not just customer protection.
GATEWAY
Depending on who you talk to will lead
to different answers to the question of
where the gateway of the future will
be in access to Chinas wealth.
Broadly, there is a swing among wealthy
Chinese individuals from offshore to
mid-shore jurisdictions, such as Singa-
Product not an issue;
as always, its first
and foremost about
distribution.
ROGER STEEL
Sun Life Financial
Changing tax laws
One of the biggest issues the
wealth management industry is
likely to be dealing with over the
next couple of years stems from
the changing tax laws in China.
With the new individual
income tax law, it will affect all
the offshore structuring that
clients in China have done to
date. Further, CRS means that
governments from 100 countries
will be reporting to the Chinese
tax authorities the details about
all the bank and other accounts
that Chinese residents have in
those countries.
This will lead to a new era of
tax audits and investigations,
requiring compliance with
the laws, predicts Michael
Olesnicky, partner and senior
adviser at KPMG.
As a result, for advisers with
Mainland China-based clients,
he says it is time to look at their
tax affairs to ensure they will
remain compliant and survive
detection going forward.
pore and Hong Kong.They are looking
for structures which stand the test of
time, explains Crawford.
According to reports, Chinas HNW
growth has resulted in a 47% increase
in the amount of money flowing into
Hong Kong between 2012 and 2014.
Similarly, Singapore saw a 32% increase.
For the time being, it seems, Hong Kong
is certain to continue to be a key centre
for Chinese offshore wealth, alongside
Shanghais growing importance.
Yet Singapore also has an increasingly
role, given that it has become an im-
portant, well-regulated and reputable
wealth hub internationally.
Though not as convenient a base as
Hong Kong, Singapore remains an at-
tractive market for Chinese investors
for its reputation as a stable, peaceful
and affluent country with a vibrant
economy and strong banking sector,
says Jason Lai, founder and chief ex-
ecutive officer, Thirdrock Group.
EDUCATED AND PREPARED
There are various ways that the wealth
management industry as a whole can
make the most of the offshoring of
Chinese wealth.
For many UHNW clients from China,
for instance, they need to be educated
on how wealth should be managed
overseas, properly and professionally,
with optimal results. They also need
to be educated to accept not-too-ag-
gressive returns relative to the yields
they may otherwise receive from the
domestic China market, says Lee.
Further, and more broadly, many clients
from China are not fully aware of the
implications of FATCA and the Common
Reporting Standard (CRS). However,
some of them already feel the inconve-
nience of dealing with banks where their
foreign nationalities might have an
impact such as in cases where they
have become US citizens or a perma-
nent resident.
They may be surprised that their off-
shore assets will be exposed to the
government authorities in China or
adopted new countries, says Lee.
Many practitioners agree that the
most pressing issue going forward is
[Chinese clients] may
be surprised that their
offshore assets will be
exposed to the government
authorities in China or
adopted new countries.
KEVIN LEE
Zhong Lun Law Firm
going to be CRS, other exchange of
information initiatives and money
laundering issues. And for Chinese
clients, while they like the idea of
setting up trusts, many dont really
understand that this involves the
transfer of control to their trustees.
CRS is going to have an impact
because it seems that most Chinese
clients are setting up structures which
are either not compliant with Chinese
tax laws, or will not be compliant as
the tax and reporting laws inevitably
change, says Howard Bilton, chairman
of Sovereign Group.
He sees many wealthy Chinese still
seemingly working on the assumption
that money held offshore in an offshore
structure can be hidden from the tax
authorities. It is going to be increas-
ingly important that any structure set
up by a Chinese client (or any client
anywhere in the world) works because
it is legal and compliant rather than
because relevant tax authorities do not
find out that it exists, he says.
Such clients need professional advice
on how to properly structure wealth
holdings in an increasingly transparent
and compliance-driven world.
At the same time, however, advisers
need to be cautious about exposing
themselves to offences or charges
under relevant CRS or other regimes
by taking too proactive a role in struc-
turing advice.
More broadly, insurance, pensions and
other more sophisticated planning tech-
niques will become increasingly impor-
tant and plain vanilla offshore structures
will be useless.
To be well-positioned in this way, there
are several things that insurers can do
to capture and be successful in the
Chinese market.
According to Steel, these include:
getting an onshore licence; keeping up
with the pace of digital innovation and
online sales; being creative when it
comes to social media promotions, such
as on WeChat; selling through banks
and their brokers, and looking at new
and alternative distribution channels,
for example real estate buyers or soccer
club members.
WEALTH MANAGEMENT IN ASIA 2016 189
FIRM PROFILE
A generational mind-set to
servicing family wealth
Planning for the future requires a sense of the past. Now, more than ever, it also needs
expert knowledge of the constantly-changing regulations. This is the approach that
Shanker Iyer takes in spearheading Iyer Practice Advisers.
There has always been a tension
between tradition and innovation. The
challenge for advisory firms today is
understanding how to deliver a service
that can respond to what clients want
and what regulators demand.
In the past few years, increasing atten-
tion has been paid to what tax really is,
and how it should be paid and where.
But tax should not be the sole or even
primary factor driving family wealth
structures. Advisers should first under-
stand the specific circumstances of the
family, and how to effectively cater for
both the current and future generations.
Only once this is determined, can the
structure (and the tax, regulatory and
fiduciary aspects) be effectively planned.
Shanker Iyer is in a unique position to
appreciate the past and invest in the
future. He is the Founder and Chairman
of Iyer Practice Advisers, a specialist
advisory firm, and has been grooming
190 WEALTH MANAGEMENT IN ASIA 2016
his two sons, Sunil and Sanjay, to see
things in a similar way.
EVOLVING PROPOSITION
Shanker initially qualified as a Chartered
Accountant in London and was a partner
of a leading accounting firm in the UK
for more than 10 years before he came
to Singapore.
The accountancy background is impor-
tant because it provides the fundamen-
tal tools for any business model.
I came to Singapore in the 1980s with
my UK firm, says Shanker, and I went
back to the UK in 1992. But then the UK SHANKER IYER
economy wasnt very good at that time Iyer Practice Advisers
and so we came back to Singapore and
I set up my own practice in 1993.
Initially he ran a traditional accounting
practice. We are chartered accountants But accounting and audit were not the
by qualification and thats been my ex- ways into the future. The audit business
perience, so it continued to be the case in Singapore was expected to decline
for the initial period. because of the impending law abolishing
FIRM PROFILE
SUNIL IYER
Iyer Practice Advisers
audit for many companies in the future,
and so we decided to exit that business.
There was personal and professional
logic in deciding to move into advisory.
We felt professionally that we pre-
ferred to do advisory work, he explains.
Audit was becoming over regulated and
stopped us providing many other ser-
vices to clients which other-wise we
wanted to.
That was the game changer. We divested
our audit business at that time and we
switched our focus to the advisory busi-
ness, says Shanker. We suddenly became
a very different firm in town.
Today, Iyer Practice Advisers is quite
unlike any other accounting practice,
and also quite unlike any traditional
trust company which typically does not
give advice (particularly with regards
to tax).
The trust companies tend to do fidu-
ciary work and most of the accounting
firms are largely audit focused, he adds.
FINDING A NICHE
That evolution has given Iyer Practice
Advisers the unusual position that it
now holds with fruitful relationships
across financial services, including in
the wealth management industry.
We became something in the middle,
explains Shanker.
Accounting firms dont seem to regard
us a competitor, and, in fact, a number
of them consult us on specialist tax
matters which are quite complex and
beyond their normal experience.
The same business model applies to
trust companies. They play a more
volume game and we are more advisory;
thats the way we focus the firm.
That focus is emphatically towards
clients. Many of Iyer Practice Advisers
clients are in the private client space.
They may come through corporate
structures but, behind these companies,
even public listed companies, there are
usually families, entrepreneurs and high
net worth individuals who want a more
personalised service.
They are very demanding in the quality
of work and depth of knowledge that
they require from us, says Sunil Iyer,
director, who oversees private client
services and regulatory compliance.
NEW LANDSCAPE
Knowledge and understanding of trends
are becoming ever-more important in
advisory work. With the changing land-
scape, good advice is imperative to
ensure clients keep up.
The three most impactful developments
in the tax world where advisers must be
up-to-date on their knowledge and
analysis are: Base Erosion and Profit
Shifting (BEPS an OECD project), a
new view of defining where sales and
profits and tax liabilities are declared;
FATCA and the Common Reporting
Standard (CRS), the use of automatic
exchange of tax information(AEOI).
Sanjay Iyer, who leads the firms tax
practice, takes a common sense view of
all these matters.
He thinks BEPS will affect business, but
less with regards to private clients. He
is also sanguine about FATCA. It primar-
ily affects those involved with the US.
CRS, meanwhile, is different and will be
much more widespread, he explains,
because it affects everybody. Whether
all countries that have signed up to CRS
will implement it at the same time will
be interesting to see.
KEEPING IT SIMPLE
In general, Iyer Practice Advisers prefers
to stick to basics.
Businessmen can make multi-million
dollar decisions very quickly, but when
it comes to their personal lives (family
succession planning, wealth planning)
they often take a long time to decide
because they must think of all the things
that can go wrong and which often do.
It can sound like a clich , but I strong-
ly feel there is no one formula that works
for everybody, says Shanker.
Each family is different, the way they
do things is different, and the solutions
are different, so we try case-by-case to
work with them and give our inputs to
their decisions. The final decision is
WEALTH MANAGEMENT IN ASIA 2016 191
FIRM PROFILE

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

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

SANJAY IYER
Iyer Practice Advisers

We want to be focused on our strategy.

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

This doesnt equate to cronyism. I do

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

192 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS
Knocking on Asias onshore
opportunity
Emerging trends in Asia in terms of how and where clients have their wealth managed,
give private banks with the resources and expertise an enticing source of work onshore,
especially in China, says Jonathan Hubbard of UBS Wealth Management.
One of the biggest opportunities that
UBS Wealth Management foresees for
its business in Asia over the next 15 to
20 years is providing onshore wealth
planning services for domestic clients
for certain markets.
As in the past, an increasing amount of
wealth continues to be created at home
rather than overseas.
The vast majority of the growth of
wealth [in Asia] is going to be onshore,
predicts Jonathan Hubbard, head of
wealth planning for UBS Wealth Man-
agement in Asia Pacific.
International banks are unlikely to get
too close to the entrepreneurs busi-
nesses, due to the individuals ties to
their commercial banking provider.
However, the need for services like suc-
cession planning, lifecycle planning and
more is a big enough draw card.
CHINA FOCUS
China clearly presents the biggest
appeal, particularly as it emerges as a
market for such onshore services. And
this trend is only expected to continue
in line with the changing dynamics of
the economy over the next 10 years.
For example, it will start depending
more on domestic consumption rather
than exports, and a lot of wealth will
increasingly be generated from within.
The discussion Hubbard is engaging in
at the moment to gauge the potential in
China is about what can really be done
JONATHAN HUBBARD
today around structures such as a family
UBS Wealth Management
trusts and insurance for succession plan-
ning onshore.
There has been a developing theme
towards this over the last two or three
years, as some of the Chinese trust This highlights the possibility of an estate
companies move away from just being planning business developing in China,
deposit takers, he adds. explains Hubbard.
WEALTH MANAGEMENT IN ASIA 2016 193
FIRM PROFILE
Sun Life embarks on path to tap
the wealth pipeline
With a new chief executive in Hong Kong, Sun Life finds itself at the start of a
strategic journey which will reposition the firm to be able to deliver needs-based,
holistic financial planning.
After 124 years established itself as one
of the leading players in Hong Kongs
insurance and MPF markets, Sun Life
Financial is ready to embark on a new
journey again.
Assuming its new chief executive officer,
Jason Dehni, can achieve all the goals
he has set out, he will have transformed
the business to deliver a broader prop-
osition with a finger in every slice of
the wealth management pie.
Further, Sun Life as an organisation
wants to be best-placed to work with a
wider variety of organisations going
forward, given that the traditional
agency model looks to have run its
course as the distribution channel of
choice in Hong Kong.
The vision reflects an evolution under
way across the region, explains Dehni,
who joined the firm from Manulife in
May 2016. With the next generation of
young and savvy clients demanding
194 WEALTH MANAGEMENT IN ASIA 2016
more from their wealth managers, insur-
ance companies have been rethinking
their business.
It is more than evident than ever to
Dehni that clients no longer want to deal
with multiple advisers.
Our clients want one relationship
manager, not one for their investment,
one for their pension and another for
insurance, he emphasises. The writing
is on the wall in Hong Kong.
At the same time, Asia is now a more
important region for Sun Lifes global
business than ever before. JASON DEHNI
Sun Life Hong Kong
So the push to grow market share in the
region, and match the scale of its busi-
ness globally, gives the new strategic
direction further fuel.
In his role as chief marketing and distri-
REDEFINING THE OFFERING bution officer for Manulife in Asia, he
Dehni is no stranger to the kind of stra- helped transform the end-to-end advi-
tegic shift he envisages in his new role. sory sales model, which included a com-
plete redesign of its recruiting, training,
technology and product offering plat-
form, including wealth management.
He now plans to lean on this experience
to repeat that with Sun Life.
In line with this, his goal is to stretch the
boundaries of the firms offerings to
complement its life insurance and pension
services with a spectrum of wealth plan-
ning and investment expertise.
He can then say with conviction that the
firm can meet the different financial and
protection needs during the different
stages of the clients lives, under one
roof. It is part of our DNA, he adds.
STEP-BY-STEP
These changes, though, are not going to
come about quickly.
This requires a certain mind-set, com-
bined with a lot of training, support,
technology, back office infrastructure,
adding mutual funds to our own plat-
form, governance and, obviously, licens-
ing, explains Dehni. So it is a journey
we will be taking over the years to come.
Top of his agenda to move up the ladder
as a fuller-service wealth manager is to
drive needs-based financial planning as
Sun Lifes core offering.
The firms asset management division
plays an important role too enabling
it to offer a multi-manager platform.
This is a point of differentiation for us,
says Dehni. Our clients value it, the
agents value it, and the market values
it. We want to extend this platform to
our agents and clients.
And for the HNW population, Sun Life
is currently developing a premium uni-
versal life proposition, which is set to
make its debut in the third quarter.
It will be our signature product for
HNWs, explains Dehni. Clients have
a choice, but when they come to a Sun
Life adviser, we are going to offer them
solutions that we believe meet their
financial needs.
But the overall goal goes beyond just
the products individually; it requires
integration so that each solution creates
complementary value to a clients
overall financial plan.
Geographically, Dehnis immediate
focus is to serve the needs of people
across various income spectrums in
Our clients want one relationship manager, not one for
their investment, one for their pension and another for
insurance. The writing is on the wall in Hong Kong.
Hong Kong. Saying this, China will obvi-
ously remain important as the firm
continues to focus on the needs of PRC
clients in Hong Kong.
QUALITY NOT QUANTITY
Yet, while products are inevitably im-
portant, they offer relatively limited
scope for differentiation.
Instead, Dehni is looking to find a niche
for the wealth management offering by
focusing on the quality of advice. And
he wants to create a value proposition
based on trust, advice and delivery of
service, he explains.
His commitment to this involves taking
on board as much client feedback as he
can get, in order to continually ensure
he and his staff provide the desired
consistent experience.
This will also involve reviewing internal
processes and policies to identify areas
for improvement.
However, the biggest challenge he faces
is how to get Asian clients to look
beyond their short-term, tactical ap-
proach towards focusing on longer-term
goals such as retirement planning and
saving for the future.
But he doesnt subscribe to the notion
of expecting clients to change overnight,
without helping them to change.
Instead, Sun Life plans to leverage tech-
nology to give investors a glimpse into
the future.
This mind-set can be changed through
education and by using technology in a
way that it can help them envision their
life after retirement, says Dehni.
Engaging clients through such tools will
encourage them to continue saving.
WEALTH MANAGEMENT IN ASIA 2016 195
EXPERT INSIGHTS
Broadening the insurance focus
on Hong Kongs wealthy
Generali is bringing a range of new life insurance solutions to meet growing appetite
among the citys HNW and affluent populations, explains Thomas Young.
The increasing awareness and open-
ness among affluent HNW individuals
in Hong Kong about the need for pro-
tection in various formats is creating
new opportunities for some of the more
proactive life insurers.
Generali counts itself among them.
It has set up a new life insurance busi-
ness in the market to target these
customers with a product range that
includes a range of traditional life, unit-
linked and universal life (UL) insurance
targeted at the wealthier segments of
the population.
For Thomas Young, in particular, as
head of the firms HNW business, the
new UL offering in Hong Kong is espe-
cially exciting.
This is a new proposition of Generali.
We have never done this before any-
where globally.
196 WEALTH MANAGEMENT IN ASIA 2016
The product itself has been around in
Asia for a long time in Hong Kong, and
has been offered to date by insurance
companies such as AIA, Transamerica
Life Bermuda, Sun Life Financial,
Manulife, HSBC, Met Life, AXA (more
recently) and others. For Generali,
meanwhile, the focus is to build on
relationships with brokers.
COMPETING AT THE TOP END
According to Young, there is a lot more
to doing these products successfully
than just the price.
He is referring to various aspects
around the support and services clients THOMAS YOUNG
get. Everyone is trying to get into the Generali
HNW space because its the least
crowded compared with retail.
Yet standing out amid those insurers
competing in the HNW space is obvi- First, he says the firm currently offers
ously key. And Young believes that most competitive UL product in terms
Generali has a few unique selling points. of price. Secondly, a novel element he
highlights is an underwriting class
which is currently not being offered by
anyone else: an underwriting class for
extremely healthy clients.
We reward customers who are healthy
with lower premium, explains Young, so
we pass the savings to the customers.
At the same time, he cites innovation in
terms of Generali being the first insurer
of its type to offer the product to
Chinese residents of 51 cities in China,
with the same rating as in Hong Kong.
The current challenge that providers face in this
segment... is the fact that clients and potential clients
are focusing on one particular product offering.
Thats just because clients are not aware
of the many different options available.
Indeed, the business out of Hong Kong
services clients from around the region,
dominated by individuals from main-
land China and Taiwan, in addition to
the population in Hong Kong.
A MULTI-DIMENSIONAL
OFFERING
The focus for many of the clients that
Young sees buying UL should start with
a growing understanding of the prod-
ucts large cover.
This enables them to do much more
than just protection.
They can use it for wealth transfer,
legacy planning, estate equalisation
and even key-man protection, he says.
The multi-dimensional nature to UL
is an important aspect of the market
that Young says needs to be better
highlighted to clients.
The current challenge that providers
face in this segment, for example, is
the fact that clients and potential
clients are focusing on one particular
product offering.
I think thats just because clients are
not aware of the many different options
available, he adds.
For example, critical illness is another
area where clients can look at getting
protection on a living benefit cover.
This is where Generalis new offering,
called La Vita, comes into play (see
adjacent box).
The living benefit segment is under-
served at the moment, says Young,
and the annuity gives clients the
option to have a regular income stream
for the future.
He is a strong proponent of the idea of
giving clients more options.
Banks also need to look at how they
can service a clients more comprehen-
sive needs, including the protection
Expanding the Generali
life insurance offering
to HNW
Generalis Sigillo Universal Life
Plan reflects the inspiration
behind the firms solution for its
most valued clients.
It enables them to pass on their
unique heritage and legacy to
future generations.
Key product features include:
lifelong protection, adjustable
death benefit, guaranteed
crediting interest rate lock
options, guaranteed minimum
crediting interest rate, highly-
flexible premium options,
product transparency, easy
access to liquidity, and free
partial withdrawal.
Meanwhile, La Vita Critical
Illness & Savings Plan is designed
to cater for clients different
needs through their life stages
such as planning for retirement
or a childs education with
guaranteed income feature and
multiple risks coverage.
Key product features include:
wealth accumulation with
life and waiver of premiums
protection, comprehensive
coverage for 100 illness
protection until the age of 100,
guaranteed monthly income
options, guaranteed crediting
interest rate lock options,
guaranteed minimum crediting
interest rate, highly-flexible
premium options, product
transparency, and easy access
to liquidity.
side, he explains. And that protection
is much more than just life.
WEALTH MANAGEMENT IN ASIA 2016 197
FIRM PROFILE

Tokio Marine carves life

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

Tokio Marine Life Insurance Singapore This is an incredible accomplishment

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

We see great potential in the J-Business segment,

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

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

198 WEALTH MANAGEMENT IN ASIA 2016

and now attaining a year-on-year
growth of 20%.
According to James Tan, chief executive
officer at TMLS, J-Business is specifi-
cally tailored to the insurance needs of
Japanese corporates, leveraging the
insurers expertise in holistic, compre-
hensive and customised group insur-
ance solutions.
At present, J-Business is the fastest-
growing among TMLS group business
segments and accounts for approxi-
mately 10% of the group insurance
business. Tan, an industry veteran with
decades of experience across Asia,
Middle East and the US, intends to
further develop this niche.
Japanese companies who are venturing into Singapore
need a partner whom they can trust to understand their
business priorities and concerns, and develop solutions
in anticipation of their needs in this new market.
We see great potential in the J-Busi-
ness segment, and our long-term objec-
tive is for TMLS to become the choice
insurer for Japanese companies in Sin-
gapore, he says.
As the pioneer in the J-Business niche,
we are already working with nearly 200
Japanese corporate clients across a wide
range of industry sectors including con-
struction, retail and logistics. In the year
ahead, we will be exploring new avenues
to engage the Japanese business com-
munity in Singapore, leveraging our
first-mover advantage and unique areas
of expertise at TMLS.
THE J-BUSINESS OPPORTUNITY
As at end-2014, nearly half of the Japa-
nese companies in Singapore hosted
regional headquarter functions, accord-
ing to a survey conducted by the Japan
External Trade Organisation (JETRO)
Singapore, a Japanese government-re-
lated organisation promoting external
trade and investment.
The trend of Japanese companies setting
up regional headquarter operations in
Singapore looks set to continue, with
another 30% noted as considering similar
moves in the same survey. It is easy to
understand Singapores appeal to the
many Japanese companies keen on
setting up regional headquarter func-
tions in the country.
The city-state has established a formi-
dable reputation as one of the most
business-friendly countries in the world,
with a comprehensive financial services
infrastructure, strong risk management
ecosystem and pro-business laws.
Its strategic position in the region also
means that Singapore is seen as an ideal
starting point for Japanese companies
looking to gain inroads into the South-
east Asian market, one of the largest in
the world.
As Japanese companies continue to in-
crease their investments in Singapore,
notes Tan, insurance will naturally
emerge as an important consideration
for them.
Japanese companies will be looking for
a partner whom they can trust and work
effectively with, he adds. This poses a
critical gap in the local life insurance
landscape that can only be filled by an
insurer who is already familiar with the
ubiquitous workings of Japanese busi-
nesses, and can adapt their offerings to
anticipate and address the specific
needs of these companies in a new
foreign market.
TMLS UNIQUE POSITIONING
At the heart of its strategy to capture
and grow business relationships with
Japanese companies in Singapore is
TMLS expertise in developing tailored
solutions, along with its heritage as part
of the Tokio Marine Group, one of the
largest insurance groups in the world
and a household name in Japan.
As an insurer and adviser to our clients,
our business at TMLS is founded on trust
and understanding, explains Tan.
Japanese companies who are venturing
into Singapore need a partner whom
they can trust to understand their busi-
ness priorities and concerns, and
develop solutions in anticipation of their
needs in this new market.
Adds Tan: As a Japanese company
which has also embarked on our own
expansion into Singapore, we are
naturally able to understand the intri-
WEALTH MANAGEMENT IN ASIA 2016 199
FIRM PROFILE

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

It speaks volumes about the insurers

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

In Tans eyes, these efforts in sincerity

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

200 WEALTH MANAGEMENT IN ASIA 2016

 2016
SUMMARY

Join us in Singapore later this year

Shaping wealth management

of tomorrow

Tuesday, 20th September 2016

Exclusive sponsor

Invite only 350+ Delegates Thought-leadership Networking

WEALTH-THINK 2015 5
wealth-think.com
EXPERT INSIGHTS
Eyeing healthy profits from a
more mobile China
The rapid growth in Chinas insurance sector is fueling Bupa Globals desire to craft
medical plans tailored to the countrys affluent population. Rainbow Pan reveals the
vision behind the strategy.
According to data from the China Insur-
ance Regulatory Commission (CIRC),
the mainland became the worlds third-
largest insurance market in 2015 with
an annual growth rate of 13.4%. And
from 2010 to 2015, the market saw an
increase in insurance premiums from
RMB1.3 trillion (USD196 billion) to
RMB2.4 trillion.
The Chinese government has also ini-
tiated major reforms to provide cus-
tomers with access to improved
medical services.
Eyeing these trends, Bupa Global aims
to play a big role in the market and
even see potential for its portfolio in
mainland China to overtake that of
Hong Kong within three years in terms
of international private medical cover.
Despite a relatively low base at the
moment in China, Bupa Global has been
investing a lot in Asia and we see this
part of the world as a growth region,
202 WEALTH MANAGEMENT IN ASIA 2016
says Rainbow Pan, the firms general
manager for the Greater China region.
And with more of Chinas wealthier
population becoming not just globally
minded, but also internationally mobile,
there is good reason for optimism.
Further, the firm already works with a
local partner, Alltrust Insurance, which
has over 200 offices across the main-
land, licensed to write medical insurance
business and is the local insurer for
products issued under another agree-
ment Bupa has with Hang Seng Bank.
So after tapping into the key initial op- RAINBOW PAN
Bupa Global
portunities in Beijing, Shanghai, Guang-
zhou and Shenzhen, a host of other
cities are on the radar, adds Pan.
CONSISTENT OFFERING
Pan says she sees first-hand evidence trip to the US West coast. One can see
of the significant rise of international them where ever you go travelling in
mind-set of Chinese nationals during the world these days. So they need
her visits overseas, including a recent good cover just in case. And it doesnt
matter where they go. Thats the op-
portunity I see, she explains.
Service-wise, what Bupa offers in main-
land China is comparable with whats
available in Hong Kong.
For instance, it offers the Bupa Global
Health Plan range, a new product
launched in 2015 as a tiered proposition
with pricing to reflect this structure.
We will be co-branding the Global
Health Plan range with Blue Shield
Global, as part of the next phase of our
partnerships and this will be delivered
in a phased approach, starting in Asia
with Hong Kong, explains Pan.
The coming together of the two names
means consumers who require global
coverage can now have access to the
largest network of health care provid-
ers worldwide.
This combined strength, knowledge
and expertise means customers can be
confident in knowing that they have
access to quality health care when and
where they need it, she adds.
More specifically, this involves a range
of premium policies for the affluent to
HNW audience.
Pan explains that this came about after
some extensive research revealed that
customers prefer something which is
simple and easy to understand.
Within Bupas Global Health Plan
range, a product called Ultimate has
no annual and lifetime limits.
And the level of medical concierge
service is akin to customers having
their own secretary within the insur-
ance company for their medically-re-
lated assistance services.
Patients get informed about the best
doctors available, and if required, Bupa
will confirm the appointment at no
extra charge, says Pan.
Yet all plans still come with annual
health check-ups and medical con-
cierge services, including emergency
assistance and evacuation, repatria-
tion, second opinion and a round-the-
clock helpline.
EXPANDING ITS CHANNELS
IN CHINA
Partnerships are key to the success of
Bupa Globals strategy in China.
Given its target market of wealthy in-
dividuals and families, the firm looks
to intermediaries like private banks
and wealth management firms to help
reach this audience.
Bupa Global has been investing a lot
in Asia and we see this part of
the world as a growth region.
The bancassurance channel is also
proving increasingly popular.
A 10-year exclusive partnership with
Hang Seng Bank began in Hong Kong
in September 2014.
A similar venture got off the ground
in China in September 2015, also with
Hang Seng Bank.
Through this arrangement, a range of
global medical insurance products
and services are made available to
Hang Seng Banks personal and cor-
porate customers.
DEMAND DRIVING TRAJECTORY
One of the main reasons for the growth
in private medical care in mainland
China stems from the desire among the
ever-larger numbers of wealthy for
higher-quality services.
But concerns among these individuals
about the cost of getting access to
this in comparison with state-run
facilities.
The hospitals which are empanelled
by Bupa Global will seek pre-authori-
sation for direct billing of our custom-
ers, explains Pan.
Our care managers, who have a
medical background, will look at the
treatment offered by the doctors, and
then help customers better understand
their medical condition, she adds.
They can then suggest the best pos-
sible alternative treatment, doctors
and/or hospitals related to the cus-
tomers medical conditions in order to
give the policyholder more options,
explains Pan.
WEALTH MANAGEMENT IN ASIA 2016 203
EVENT HIGHLIGHTS - DIGITAL WEALTH - ASIA 2016 - JUNE
Turning digital into reality
Speaking at Hubbis flagship annual Digital Wealth event in Singapore in mid-June 2016,
senior industry practitioners highlighted some of the most pressing considerations and
objectives to ensure institutions get moving in the right direction along their inevitable
digital path.
Financial institutions are re-assessing
their strategies and engagement of all
kinds of technology.
Amid all the hype and talk among banks
about them looking to enhance their
digital propositions and offer clients
more via these channels, they need to
act if they want to address the real
challenges they still face. While the
demand for digital wealth management
is growing among Asian investors,
many traditional players are struggling
to respond.
For those institutions in search of in-
novation and digitisation for their
wealth management business, there-
fore, they need to carefully consider
how they work ever-closer with (the
right) fintechs as the former rely on the
latter for something interesting and new
204 WEALTH MANAGEMENT IN ASIA 2016
to offer to clients to service their wealth
management needs.
Yet disruption in any dramatic way looks
unlikely. So management need to focus
on how to evolve and enhance their
businesses to thrive, not wither, in
todays challenging environment.
This is needed in private banking, for
example, given the move away from
purely face-to-face conversations, to a
landscape where clients can interact
with an individual adviser as well as the
institution through different and mul-
tiple channels. Plus, the trend is heading
in a direction where it will be possible
for customers to transact directly
through the bank.
Plus, while a lot of people get most
excited and focused in relation to front-
Thank you to our sponsors
Allocated Bullion Solutions
Appway
EY
IMTF
Intellect Design Arena
Pershing
IRESS
SIX Financial Information
Vermilion Software
Assentis Technologies
Orbium
Synpulse
Temenos
Thomson Reuters
end solutions, some industry leaders
think the right approach is to start at the
back end especially given regulations
and operations are critical areas of
concern for many senior management.
One of the principal premises of robo-
advisory, meanwhile, has always been to
change the way of thinking about invest-
ing towards being more goals based. This
resonates with many investors. Institu-
tions will increasingly see the advan-
tages of going down this route, to
ensure their end-customers remain
satisfied and can be self-directed.
Adrian Gostick Andrew Koh Andy Feitknecht Charles Wong Dirk P Sibiet
BondIT Asia China Construction Bank Assentis Technologies Priv Holdings ABN AMRO Bank

Dr Lee Ng Eddy Tai Evy Theunis Frank Henze Frank Troise

MetLife Bank of Singapore DBS Leonteq Securities

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 205

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

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

This event has been very important in highlighting and

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

Zoe Niu
Appway

206 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS
A process to digitalisation
Artificial intelligence, machine learning and other digital capabilities make it possible to
connect multiple information sources and systems to come up with solutions and views
to ensure advisers are more productive, says Peter McMillan of Thomson Reuters.
Digital platforms have gathered a lot
of momentum in the US over the past
12 to 36 months, says Peter McMillan,
head of wealth management for
Thomson Reuters in Asia.
This shows the focus on enhancing digital
platforms with the aim of reaching more
customers and provide better advice, to
provide a better user experience.
In Asia, many banks are involved with
accelerators, innovation labs and other
initiatives to try to understand the
fintech arena and enhance platforms
with capabilities that enable them to
better service clients, says McMillan.
Private banks, in particular, are looking
at ways to address the margin, regula-
tory and investment pressures they face.
CREATING DIGITAL PLATFORMS
One of the first steps institutions should
take along this digital journey is to
connect multiple databases, he advises,
explaining that it isnt practical for rela-
tionship managers (RMs) to join the dots
to help them understand what is hap-
pening in the market, how it relates to
their CRM database and the suitability
for their client.
In line with this, creating a smooth com-
munication path is also a key compo-
nent, adds McMillan.
An RM should have multiple ways to
connect with clients, to get the informa-
tion they need, on the device preferred,
and when they want it. Plus, it should
connect to all the other databases if
they need that information. PETER MCMILLAN
Thomson Reuters
This is essential from a suitability per-
spective, for example, explains McMil-
lan, to know what investment product
is pre-qualified.
Ultimately, he says this reduces the time
By extension, this can integrate model RMs spend on research and processing,
portfolios, to assist in comparisons with to free them up to focus on prospecting
client portfolios at different risk levels. and servicing clients.
WEALTH MANAGEMENT IN ASIA 2016 207
EXPERT INSIGHTS
Why banks must rely on
fintechs
Ralph Mogicato, a fintech angel investor, explains why banks and fintechs will work ever-
closer as the former rely on the latter for something interesting and new to offer to clients
to service their wealth management needs. Disruption in any dramatic way looks unlikely.
Because most banks are not innovative
by nature, they will increasingly rely on
fintechs to drive client interactions and
engagement within wealth manage-
ment. As a result, they are more eager
than ever before to get these companies
on board.
This is according to Ralph Mogicato, an
entrepreneur and independent senior
adviser, who says this explains the hype
and potentially large bubble emerging
in this space.
This also explains the shift in what fin-
techs are focusing on. The original
fintech companies were supposed to
be disruptive. However, today every
start-up which writes a line of [program-
ming] code calls itself a fintech, says
Mogicato. There are not many firms
which are genuinely disruptive.
As a result, while some fintechs will
inevitably be successful, many wont
survive for long.
208 WEALTH MANAGEMENT IN ASIA 2016
But there will be no brave new world
along the lines of earlier predictions.
Instead, Mogicato says banks need to
work out how to get the most value for
their wealth management businesses
from collaborating with fintechs today.
And the consequences for banks which
dont take these developments seri-
ously will be severe, he predicts. In the
medium term, they will be less interest-
ing and relevant to their clients. And in
the long term, they wont be in business
at all if they dont offer attractive prices,
good execution and a quality service.
A NEW FINTECH FOCUS RALPH MOGICATO
Against this backdrop, now is the Angel investor and entrepreneur
moment for more fintechs to enter the
limelight given that their agility and
pace provide them with the opportu-
nity to implement their ideas without
the baggage of legacy systems. to those banks shackled by a heavy level
of financial regulation and compliance
It is in this way which they will be criti- issues. Testament to this trend is the
cal in providing a competitive advantage number of innovation labs and accel-
EXPERT INSIGHTS
erator programmes which have sprung
up around the world and initiated by
some of the worlds largest banks.
Further, a recent study by Accenture of
global investment in fintech ventures
in the first quarter of 2016 showed that
this reached USD5.3 billion, a 67% in-
crease over the same period last year.
The report also noted that the percent-
age of investments going to fintech
companies in Europe and Asia Pacific
nearly doubled, to 62%.
Perhaps most notable about the report,
and backing Mogicatos observations,
is that collaborative fintech ventures
those primarily targeting financial
institutions as customers are gaining
ground over so-called disruptive
players that enter the market to
compete against those institutions.
For example, funding for collaborative
fintech ventures, which accounted for
38% of all fintech investment in 2010,
grew to 44% of funding in 2015, with
the remaining investments made in
ventures competing with institutions.
Yet, the proportion of competitive
fintech ventures in Europe and Asia is
much higher than in North America,
reflecting the earlier stages of maturity
of fintech markets, outside of London.
However, while so-called disruptors
may compete against banks at first, they
often end up aligning with them through
investments, acquisitions and alliances,
said the report. It highlighted BBVAs
recent stake in Atom, a mobile-only
bank in London that launched last week.
DRIVING CHANGE
In the years to come, Mogicato believes
that many financial institutions such as
banks and insurance companies will still
exist, but they will have been able to
use fintechs in ways to help to trans-
form their businesses.
To get to this stage, however, more
banks need to start focusing on change
management. If they dont get the
basics right, such as the right core plat-
form and clean up their application
landscape, then they will fail, explains
Mogicato. They will prove to be too
slow and its too expensive to survive.
As a result, he is positive about fintech.
Banks must be more focused on their
client and their needs, which means
better products and faster execution.
Banks can do more with start-ups which
can produce software for business-to-
business applications.
In particular, the back-end must work
and be flexible, and straight-through
processing is a crucial component of
this. But this is a key area of the business
which most banks have ignored. They
neither renovated what they have
already, nor put in place a new one.
Without this, what most banks have,
says Mogicato, is akin to putting a Ferrari
engine in an old-timer it wont work.
Yet the banks arent the only firms in the
ecosystem which need to adapt. Core
banking providers such as Avaloq and
Temenos, for example, are confronted
by new technologies such as blockchain.
These firms have responded in other
ways, by building their own app stores
where banks can plug into their plat-
forms new solutions from start-ups.
SET FOR SUCCESS
It has also become clearer which kind
of fintech has the biggest potential to
create a splash.
What to look for when
investing in a start-up
It is generally quite easy for
fintechs to raise money and get
a first meeting. The elements
they need to survive over time,
however, include:
A good and highly-motivated
founder team
A good simple idea
complexity is not good
Fast execution of the idea
Find one or two existing
clients using the product
or service
Payment-oriented firms, for example,
and those at the retail end of the busi-
ness with customers as their focus, are
going to be big the most likely among
all fintechs to become the future Ubers.
Robo-advisers will be the other big
disruptive force, with the more success-
ful ones which get the formula right to
be the defining element of wealth man-
agement driving the future of advi-
sory and marketing in the near future.
The game-changing firms, therefore,
are those which can be unencumbered
by the constraints of the traditional way
of thinking in wealth management.
Yet banks need to do more in their
pursuit of fintech. They need clearly
identified long-term goals in collabora-
tions with such firms such as increas-
ing the companys revenue or profit.
For fintechs, they need to ensure what
they offer is tangible with valuable
output. This will prevent them falling
prey to cost-based decisions when pres-
sures increase, explains Mogicato.
WEALTH MANAGEMENT IN ASIA 2016 209
EXPERT INSIGHTS

Turning digital into reality

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

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

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

DRIVING INNOVATION AND EVOLUTION

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

210 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

WHICH OF THE FOLLOWING IS THE TOP TECHNOLOGY-RELATED

PRIORITY IN ASIAN WEALTH MANAGEMENT? Key topics and themes

Technology - its role in the

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

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

disruption is unlikely.

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

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

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

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

WEALTH MANAGEMENT IN ASIA 2016 211

EXPERT INSIGHTS

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

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

Getting this right then enables firms to deliver

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

Saying this, the front end does need to develop in

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

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

WHICH OF THE BELOW DO INSTITUTIONS MOST NEED TO CHANGE

TO ADAPT & THRIVE AGAINST DIGITAL DISRUPTORS AND
COMPETITORS?

24%
Culture & mind-set of staff

Leadership

Taking a strategic not silod

33% approach to systems

24% Willingness to collaborate

with fintechs

Value proposion

10% 9%

Source: Hubbis Digital Wealth - Asia 2016, Singapore

ROBO-ADVISORY HERE TO STAY

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

Coupled with the greater transparency created, in terms

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

Jeroen Buwalda, EY and Mark Nelligan, Pershing Securities

212 WEALTH MANAGEMENT IN ASIA 2016

EXPERT INSIGHTS

Institutions will also increasingly see the advantages of

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

However, despite there being no doubt that this is the

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

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

WHAT WILL MAKE THE DIFFERENCE BETWEEN THOSE FINTECHS

WHICH SURVIVE, AND THOSE WHICH WILL DIE OUT?

81%
Commercial viability /
demand including
profitability

Quality of management

Commercial relaonship
of the fintech

Strength of technology

6%
6%
7%

Source: Hubbis Digital Wealth - Asia 2016, Singapore

Business leaders must drive the change, by picking the

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

Although some of the changes to come might not be as

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

WEALTH MANAGEMENT IN ASIA 2016 213

EXPERT INSIGHTS
What if an Uber wealth
was born?
Financial institutions face a strategic choice: either be disintermediated or become part
of the new reality. Raj Ganesarajah of Intellect Design Arena explains why and how the
latter is the only route to survival.
The rise of Uber, which is estimated to
have taken about 50% of the share of
taxi usage, has convinced a lot of people
that digital will if it hasnt already
change the world.
These proponents include Raj Gane-
sarajah, the Malaysia country head
and senior vice president at Intellect
Design Arena.
An example in the context of the finan-
cial space, he says, is the birth of online
peer-to-peer lending companies.
The digital trend is only likely to gather
momentum in the industry, believes
Ganesarajah.
For instance, he says the emerging af-
fluent like to use digital devices, indicat-
ing that they are looking for a service
that matches such a lifestyle.
In turn, financial institutions must now
think much more carefully about
214 WEALTH MANAGEMENT IN ASIA 2016
whether they want to be displaced or
become part of the evolution, as the
wealth management industry strives
for greater efficiency.
THE UBER OF WEALTH
MANAGEMENT
According to Ganesarajah, relationship
managers (RMs) and IFAs would react
in the same way to an equivalent to
Uber in this industry.
This is because it can help them find
an easier and more efficient way to
serve clients.
His firms digital platform, he explains, RAJ GANESARAJAH
Intellect Design Arena
enables investors to manage their port-
folios in a self-service style.
This ranges from creating and refin-
ing their own portfolios, to tracking
and analysing the performance, and Yet while this Uber-style approach to
even includes back-testing various wealth management gives investors
model portfolios to develop their own more control, they can still call on advis-
model portfolios. ers for help.
 Digital Wealth - Asia 2016
10 November, 2016
Island Shangri-La, Hong Kong

REGISTER NOW
At the Registration desk

World-class speakers 300+ Delegates Thought-leadership Networking

www.hubbis.com/mainEvent/
Hubbis digital learning solution
We help practitioners at Private Banks, Retail Banks, Insurance Companies, IFAs,
Multi-Family Offices and Independent Asset Managers meet their professional education
obligations via various digital learning content, event presentations, videos and more.
100+ assessed courses
Digital learning modules
Hubbis offers 100+ proprietary training courses covering
core topics relevant to compliance obligations, investment
and product knowledge, advising families on long-term wealth
structuring, and generally building and improving effective
& appropriate advisory skills in an Asian industry context.
Analyse results
Reporting
The Hubbis system allows the recording and reporting of all
online and offline internal and third-party training in order to
provide a complete training record for each individual. The
Hubbis digital learning platform also offers a dedicated report-
ing feature enabling HR and / or compliance managers to gen-
erate customised data sets to match both internal and regula-
tory training reporting requirements.
200+ hours of live content
Presentations, video Q&As
Hubbis augments formal digital courses with over 200 hours
of live-learning content that ranges from videos to engaging
presentations from Hubbis highly-acclaimed Wealth Man-
agement events. Each training course and many of the ad-
ditional materials are in modules of 30 and 60 minutes for
CPT/CPD/OPT. And all Hubbis modules are assessed prior
to completion to assist in demonstrating users learning
success for regulatory reporting.
Hubbis events
Access to our Forums
Attendance at any of the Hubbis events throughout the
year at no additional cost - including forums in 10 markets
across Asia, plus in Switzerland and Dubai.
Why we are different
ASIA-SPECIFIC CONTENT - Hubbis is the only
provider of online learning that is solely dedicated to
the Asian wealth management industry
VALUE FOR MONEY - We want to ensure learning is
affordable and accessible to everyone in the wealth
management industry. We never charge any fees for
on-boarding or end-user training
GOVERNANCE - We constantly review & upgrade
the relevance and timeliness of the platform this
includes adding new courses every week, adapting
functionality to the needs of different markets and
types of institutions, and improving the technology.
We also regularly bring together - via our events
and private thought-leadership discussions - market
experts on all topics. This enables us to check our
existing content and plan new courses
COLLABORATION - We collaborate with more
than 100 existing partners on the learning platform
getting feedback and incorporating new ideas for
content, functionality and technology. Plus, we work,
across the overall Hubbis business, with more than
375 partners continually discussing with them their
problems to understand the reality of the market
EDUCATION - The material we produce is USEFUL
and USEABLE. It helps wealth managers and other
practitioners meet their continuing professional
development needs in a practical and robust way
CONTENT DEVELOPMENT - We source content and
insights from the most respected and experienced
practitioners at the leading firms in the market and
package it for our learning platform
REPORTING We enable users to generate
individual, team and annual training records on
demand. We offer built-in, customised reporting tools
to quickly meet regulatory requirements
 Our learning platform

HR & compliance Administrators The user Live learning

LEARNING PLAN

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

Tracking

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

Consolidated record

Meeting your critical

compliance requirements
Contact us: learning@hubbis.com
DIRECTORY
People and firms who supported
this publication
We very much appreciate the participation and contribution of key individuals and
organisations in the asset and wealth management communities to the content in
this publication.
PEOPLE QUOTED
Adriel Loh, Bank of Singapore
Alan Luk, Hang Seng Bank
Albert Chiu, EFG Bank
Alison Brown, HSBC Global Asset Management
Alvin Lee, Maybank
Alvin Ma, EFG Bank
Amanda Chen, Nomura
Andri Manatschal, PwC
Angelo Venardos, Heritage Trust Group
Anshu Kapoor, Edelweiss Global Wealth Management
Anthonia Hui, AL Wealth Partners
Arnaud Tellier, BNP Paribas Wealth Management
Bassam Salem, Citi Private Bank
Benjarong Techamuanvivit, Kasikorn Asset Management
Bernard Renell, HSBC Private Bank
Brian Shegar, Emirates NBD
Catherine Kirchmann, Investec Wealth & Investment
Damien Mooney, BlackRock
Danial Mah Abdullah, Labuan IBFC
Don Charnsupharindr, Citi
Eleanor Wan, BEA Union Investment
Evrard Bordier, Bordier & Cie
Febby Avianto, Falcon Private Bank
Fredrik Lager, SEB Private Banking
Georg Schubiger, Bank Vontobel
Grace Chow, Bank of East Asia
Hans Diederen, Heritage Trust Group
Harmen Overdijk, Caidao Wealth
James Tan, Tokio Marine Life Insurance Singapore
Jason Dehni, Sun Life Hong Kong
Jason Lai, Thirdrock Group
Jing Zhang Brogle, Edmond de Rothschild
Jirawat Supornpaibul, Kasikornbank
Joachim Straehle, EFG International
John Cappetta, Bank Julius Baer
218 WEALTH MANAGEMENT IN ASIA 2016
Jonathan Hubbard, UBS Wealth Management
Joseph Tam, Wing Lung Bank
Juan Aronna, RBC Wealth Management
June Wong, State Street Global Advisors
Karan Bhagat, IIFL Private Wealth Management
Kevin Lee, Zhong Lun Law Firm
Kevin Talbot, Aviva Investors
Kris Chantanotoke, Thai Life Insurance
Lavanya Chari, Deutsche Bank Wealth Management
Lonnie Howell, UCAP Asset Management
Malik Sarwar, HSBC
Marc Lansonneur, DBS Bank
Marc Van de Walle, Bank of Singapore
Martin Crawford, Vistra Group
Michael Blake, UBP
Michael Levin, Credit Suisse
Mignonne Cheng, BNP Paribas Wealth Management
Nanjo Berba, Philam Asset Management
Neil Harvey, Credit Suisse
Nick Pollard, CFA Institute
Nigel Preston, St. Jamess Place Wealth Management
Nigel Rivers, Capital Solutions
Paul Gambles, MBMG Group
Paul Hodes, Citi
Paul Stefansson, UBS Wealth Management
Peter McMillan, Thomson Reuters
Philippe Legrand, London and Capital Asia
Piers Brunner, Knight Frank
Rainbow Pan, Bupa Global
Raj Ganesarajah, Intellect Design Arena
Ralph Mogicato, Angel investor and entrepreneur
Robert B Ramos, Union Bank of the Philippines
Robert Foo, MyFP Services
Roger Bacon, Citi Private Bank
Roger Steel, Sun Life Financial
Ron Lee, Goldman Sachs Generali
Sandeep Sharma, HSBC Private Bank Henley & Partners
Sanjay Iyer, Iyer Practice Advisers Heritage Trust
Seamus Donoghue, Allocated Bullion Solutions HP Wealth Management
Shanker Iyer, Iyer Practice Advisers HSBC Private Bank
Shikha Gaur, Aon Hewitt IMTF Group
Stephanie Jarrett, Baker & McKenzie IRESS
Stewart Aldcroft, Citi Iyer Practice Advisers
Sunil Iyer, Iyer Practice Advisers J O Hambro Capital Management
Thomas Young, Generali JPMorgan
U Chen Hock, RHB Bank London & Capital Asia
Vincent Chui, Morgan Stanley Nordea Bank
Numerix
Old Mutual Global Investors
Orbium
ADVERTISERS Pershing
AAM Advisory Principal Global Investors
Allocated Bullion Solutions RBC Wealth Management
Appway Rosemont
Asiaciti Trust St. Jamess Place Wealth Management
Avaloq Sun Life
Aviva Investors Swaen Capital
Bain & Company Swiss Asia
Bank of China (HK) Swiss Life
Bank of East Asia Synpulse
BEA Union Investment Temenos
BlackRock ThirdRock
BNP Paribas Wealth Management Thomson Reuters
Bordier & Cie Tokio Marine
British and Malayan Trustees Limited TTG
Bupa Global UBP
BVI House Asia Vermilion Software
Caidao Wealth Vistra
Capital Solutions VP Bank
CFA Institute Willis Towers Watson
Citi Private Bank
Credit Suisse
DBS Bank
EFA Group
Enhanced Investment Products
EY
EFG Bank
Falcon Private Bank
Finaport
First Names Group
Franklin Templeton Investments
Friends Provident International
Fullerton Fund Management

WEALTH MANAGEMENT IN ASIA 2016 219

Residence programmes offer
solutions to security risks
Dr. Juerg Steffen of Henley & Partners explains the value and merits of residency
programmes, especially in Singapore and Malaysia.
The quickening pace of globalisation
has given rise to a growing demand for
greater transparency among financial
institutions and tax authorities.
In response to this, the Organization
for Economic Co-operation and De-
velopment (OECD), with the support
and endorsement of various countries
and international bodies including the
G8, G20 and Central Bank Governors,
has called for the global implementa-
tion of its Standard for Automatic
Exchange of Financial Account Infor-
mation (The Standard).
The Standard, which was developed as
a proactive measure against tax evasion,
outlines how financial account informa-
tion of foreign tax residents may be
disclosed by financial institutions and
governments to relevant authorities in
order to locate untaxed wealth.
This would require domestic legisla-
tion to be implemented and corre-
220 WEALTH MANAGEMENT IN ASIA 2016
sponding country-to-country agree-
ments to be executed.
It is a big step towards a globally-coor-
dinated approach to disclosure of
income earned by wealthy individuals
and organisations.
There is potentially however, some risk
involved to the security of these indi-
viduals and their families once govern-
ments begin exchanging sensitive fi-
nancial information.
For wealthy families who have concerns
regarding their privacy, one option is to
consider moving to another country DR. JUERG STEFFEN
Henley & Partners
where the overall situation is more fa-
vorable with regard to security, tax,
lifestyle and education.
Henley & Partners, the global leader in
residence and citizenship planning, children with future options of living,
offers several residence options that working and studying in several coun-
are tailor-made to the needs of affluent tries, can help them achieve interna-
families, and through providing their tional success.
Key residence programmes of real inter-
est today include Singapore and Malaysia.
Dr. Juerg Steffen, Group Board Member
of Henley & Partners and Managing
Partner of its Singapore office, says:
The Singapore Global Investor Program
(GIP) and Malaysias My Second Home
Program (MM2H) both offer significant
attractions and benefits to those able
to diversify their lives and assets.
mies, due to its continued industrial
growth and political stability over the
past few decades.
It is a highly-open, upper-middle income
economy and the third largest economy
in this region.
Successful applicants and their depen-
dents are granted a 10 year multiple-
entry visa.
Steffen adds: Most investors who are
searching for alternative permanent
residence are motivated beyond money;
instead they are often looking to invest
in countries from a family, social and
cultural perspective.
Residence-by-investment programmes
can deliver the quality of life and secu-
rity these individuals seek, concludes
Steffen.

He continues: Singapore is considered

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

It is also one of the wealthiest countries

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

The MM2H meanwhile, has accepted

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

WEALTH MANAGEMENT IN ASIA 2016 221