We talk to one of the most prominent executive search firms in the Asian wealth management space to talk about trends and business hot-spots.

The most successful wealth managers working in regions such as Asia will be those who have as much insight into clients’ business life as they have about how to run private assets, a prominent executive search figure told this news service recently.

The sheer variety of markets across North and Southeast Asia – ranging from emerging market-style economies in Vietnam and The Philippines to more developed places such as Singapore – makes easy generalisations difficult. But patterns of behaviour unfold.

Danny Jones, founding partner at Huddleston Jones, a firm based in Singapore, argues that it is no longer enough for relationship managers to know about private wealth and investment. They need to help clients with their enterprises, drawing on the skills of investment bankers, corporate finance and related fields.

“Bankers want an opportunity to manage enterprise wealth management and provide structured solutions, in addition to traditional money management and advisory,” Jones, who has worked in Asia since 2006, told WealthBriefingAsia recently.

Jones argued that such demands come at a time when parts of the Asian recruitment market for private bankers, wealth managers and family office figures have been cool, affected by developments such as Hong Kong’s political unrest and some economic headwinds. “I think banks have pushed back at hiring, with a focus on cost management and business risk mitigation” he said.

His comments will add to the debate on what business model will work best for certain types of client: a standalone wealth firm which does not sit inside a larger business and is free of potential cross-selling pressures, or a group which is part of a greater organisation able to tap into a range of expertise? It is an argument that is unresolved, not least because no one wealth client is alike.

The Asian markets have not been the easy hunting grounds that some banks might have hoped for in recent years. The likes of Barclays, ABN AMRO, ANZ and Societe Generale have sold private banking operations, in some cases, to local shops such as DBS and OCBC. This reminds practitioners that building businesses requires patience, respect for local culture, and the ability to learn from on-the-ground experts.

Even so, some international big hitters such as UBS, Credit Suisse, Citigroup and BNP Paribas remain committed. Pictet, to take one example of a medium-sized Swiss private bank, has been building teams in Asia. A recent trend has also been associated with partnerships and JVs. Groups, such as Zurich-listed Julius Baer, have formed joint ventures such as a deal signed in Thailand. UBS has partnered in Japan with Sumitomo Mitsui Trust Holdings. Swiss private bank Bordier & Cie joined forces in 2018 with a Vietnamese lender to develop services in the Southeast Asian country. Liechtenstein’s VP Bank plans to build a joint wealth management platform in Hong Kong with Hywin Wealth Management (China), pitched at onshore and offshore service offerings.
 

Digital dynamism
Jones argued that while some areas aren’t particularly busy, the digital banking space is hot: “There seems to be a lot of development in this particular sector in Singapore, where we are seeing an increased interest. We believe digital banking will rapidly cool down and shadow the fintech area, which has been a growth sector in recent years.”

There remain pockets of growth in Singapore, most notably in the Greater China sector, with Singapore being the benefactor of political unrest in Hong Kong. “We have seen a rise of enquires from North Asian bankers in relation to Singaporebased opportunities, however interests tend to peak at enquiry level only. That said, our clients have made reference to a rise in Singapore booked accounts from North Asian domiciled clients as an alternative to Hong Kong” Jones said. This is encouraging banks to reconsider their Greater China strategy in Singapore, he added.

Indonesia rising
Singapore has been affected by an outflow of Indonesian money as a result of Jarkarta’s tax amnesty programme. The wind-down of that process, coupled with the recent re-election of Indonesian President (Jokowi). could provide much needed stability and see related inflows from Indonesia coming back to Singapore in due course, he said. A more stable political environment in Indonesia is also helping its onshore market. “The Indonesian recruitment market has been somewhat dormant in recent years, with bankers hesitant to consider external opportunities during the amnesty. However, we have recently experienced a rise in candidate engagement that would suggest an increased appetite from Indonesian investors”, he said.

Finally, conversation turned towards technology, and how bankers and other wealth managers are increasingly demanding high-quality tech to help them do their jobs. “This is a significant driving factor for bankers, who will naturally gravitate towards banks with advanced digital strategies; the use of technology to strengthen and streamline onerous account opening processes to enhance the client experience has quickly become top priority for most private banks in the region”. 

A bank that makes it easy for clients - within reason - to open accounts will win. “We have seen a few banks that have really embraced a smoother opening process,” he said, giving the example of Deutsche Bank recently.