What are the key actions that private bankers in Asia can take to improve the client experience? John Koh, managing director of executive firm WMRC Private Ltd, shares his insights.

What are the key actions that private bankers in Asia can take to improve the client experience? John Koh,
managing director of executive firm WMRC Private Ltd, shares his insights. This publication is
pleased to share these insights: as ever, the views expressed here are those of
the author and company, and not necessarily shared by this publication.

Summary:

More
intimately engaged with the client than anyone or any touch-point in the entire
client experience, the private banker is the human face of a bank defining the
overall satisfaction level of a client. How happy the client is with his or her
private banker affects how much assets would be brought over, the level of
investment activity, the potential to refer others in their circle of
influence, and even down to issues surrounding inter-generational wealth
transfer and gifting. In the face of mounting competition and regulatory
changes, how has the role of the private banker changed and how does that affect
client experience?  

What
are some key actions that private bankers can take to further enhance client
experience and how do banks ensure they are hiring the right people for such a
critical role? 

The
role of the private banker has in recent years, become increasingly challenged
in the face of mounting competition and regulatory changes. 

Many
wealth managers are citing the rising costs of compliance as a major impediment
to their business growth. Not only are regulations becoming stricter in terms
of approving a new client account, existing clients are also subject to more
pervasive surveillance on their trading activities and banking transactions.

Concurrently,
the industry is undergoing massive changes since the global financial crisis.  Consolidation is happening rapidly and there
have been significant merger and acquisition activities among the key players
over the last two years. 

The
number of international names in Asia’s
private banking arena has reduced lately with the disappearance of names such
as Merrill Lynch, ING, Clariden Leu and Fortis.   Others such as BSI Bank and Societe Generale
are reportedly in talks with potential buyers. (To view an item on the Societe
Generale situation, click here.)

On
the surface, it looks like the competitive landscape has grew milder with fewer
players but on closer scrutiny, the level of competition has actually grown
keener with the emergence of numerous non-traditional players, such as the
independent asset managers and family offices.

Global
financial institutions such as investment banks and fund managers (which
traditionally aren’t strong players in the wealth management space) are also
jumping onto the bandwagon on the promise of the creation of new wealth and the
huge potential opportunity in Asia.It is no surprise that clients in Asia are baffled by these recent developments.

Dilemma faced by Asia’s wealthy

Many
of them are finding it hard to differentiate among the various service
providers, let alone understand how relevant their service would be for
them.  With the financial crisis still
fresh in their minds, many are still cautious about getting into a new banking
relationship as they have seen how even well-established names have faltered
during the crisis.

However,
managing your own money is a difficult and time-consuming task and Asian
clients know that if they want to enjoy their wealth and be able to sleep well
at night, they need professional help. 

That
professional help comes in the form of the private banker or a trusted advisor
– someone whom clients expect to be fully conversant with the latest financial
products in town and can depend on for strategic advice on their financial
matters.

Comparing
Asian’s wealthy to those in the West, they are less experienced in utilizing
the full suite of wealth management services which often encompass financial
planning, investments, trust services, tax planning across several
jurisdictions, inter-generational wealth transfer and philanthropy.

Many
Asian clients derive their wealth from their business ventures and in every
conversation they have with their advisor, their business issues inevitably
come into the picture. In fact, so intertwined are their business and personal
wealth needs that a number of wealth managers are realigning their business
banking and private wealth solutions to better cater to the needs of these
business owners and entrepreneurs.

The
level of sophistication and competence of the private banker therefore has a
strong influence on client experience.

Role of the private banker

Private
bankers are no longer just high-end salespeople good at wining and dining their
clients. More than having just good interpersonal and communication skills,
clients are expecting them to have strong knowledge of products (both external
open product architecture and internal in house products), as well as good cross-selling
skills.

They
must be capable of giving comprehensive wealth management advice; able to make
sound investment calls which deliver sustainable performance; be good at
product innovation and able to develop new solutions to problems.

Perhaps
the Achilles’ heel for many private bankers lies in their propensity to jump
ship and secure a higher salary. To most clients, switching a relationship manager
or a firm every year or two totally irks them. Depending on how strong their
relationship with their banker is and how “institutionaliaed” they are with the
firm, some clients would rather uproot their assets to continue their
relationship with their banker or choose to remain with the firm with a new
RM. 

Studies
show that Asian clients are becoming more discerning when picking their wealth
managers. Gone are the days when they would maintain five or more private
banking accounts. It is now common to have just three accounts to fully service
their private banking needs, and have another one or two accounts with the
non-traditional wealth managers, i.e. independent asset manager, family office
or fund manager.

In
enriching client experience, private bankers need to carefully consider their
career options and decide which platform suits them best. With clients
consolidating their private banking accounts, bankers need to make sure they remain
relevant and continue to be among the top three bankers their clients would like
to do business with.

Impact of technology

How
well are wealthy clients taking to new technology, such as social media and
smart IT gadgets? And how would that affect their private banking experience?

Wealth
people are heavy users of technology and smart gadgets. They are often among
the first adopters of what's new and available and that is likely due to their
ability to spend and their curiosity to experiment and try new things.

Technology
has the ability to make information available quickly and thereby improving
efficiency – which very much appeal to the rich. In fact, smart phones,
tablets, social networking and video are increasingly becoming the norm in the
communication tools that the wealthy use and wealth managers must be able to
adapt to the digital media to fully engage with their clients.

Private
bankers know their clients are very busy people and rather than meeting them
face-to-face and sending reports or letters, digital technology is now making
client interaction more efficient via emails, text messages and clever
applications that enable clients to do more wirelessly.

Hiring the best private
banker candidate

With
the private banker being such a key figure in the entire client experience, are
banks getting their hiring strategy right? What are some crucial points they
need to address whenever they look at a potential candidate?

Below
is a quick checklist:

--
How strong is the candidate’s knowledge of the various aspects of wealth
management, in other words, financial planning, investments, trust services,
tax planning, wealth transfer and philanthropy?

--
If the candidate is weak in certain aspects, is he/ she resourceful enough to
rope in the relevant specialists to work with?

--
How confident is the candidate in engaging with business owners and
entrepreneurs?  Would he/ she have good
understanding and knowledge of business banking needs and cross-sell
intelligently?

--
Besides the mainstream private banking products, how knowledgeable is the
candidate on alternative products and service platforms rendered by independent
asset managers or family office?

-
Does the candidate have a strong track record of making sound investment calls?
Is he/ she quick at grasping new product ideas and concepts, and applying them
to unique client needs?

--
What is the main motivation for wanting to move? Is the candidate motivated
mainly by financial gains or is he/ she moving to better meet the interests and
needs of clients?

--
How technology savvy is the candidate? 
Is he/ she totally comfortable with the use of IT tools and gadgets,
such as smart phones, tablets and social media? Is he/ she good at leveraging
on technology to foster closer relationships with clients?