This news organisation recently interviewed UBP's Hong Kong CEO and head of North Asia about the business and its recently-launched family offices offering.
Earlier this year Union Bancaire Privée, the private banking group, scooped the award for best pure-play boutique private bank at this publication’s Greater China programme. We managed to catch up with Eric Morin, CEO for Hong Kong and head of north Asia at the Geneva-based group, to ask him about its strategy and in particular, the firm’s recently-launched Family Offices Services arm.
WealthBriefingAsia: This year Union Bancaire Privée rolled out its FOSS Family Office Advisory in Asia following a solid set of financial results for 2019. Can you give me an overview of what the new family office service is? What is distinctive about it and why is it being launched in Asia?
Morin: Family offices services is an integrated offering that provides the client with an “on the way solution” from the time that the client has the idea to set up a family office until the time when he has the assets booked in an account with UBP. We consider this arrangement a partnership with the client. We accompany him/her in the process of setting up the family office. That requires a deep understanding of the family objectives and the family issues as well. Our job is to help the family overcome all of the difficulties, set up the right structure, in the right jurisdiction, with the right people, in the right format and then, eventually, to manage and advise on the assets of the family office.
So how potentially large is the family offices market in Asia? Are there particular jurisdictions in countries such as Singapore, Indonesia, Malaysia, Thailand, and the Philippines, for example, where you see a specific demand for family offices services?
The need, or the demand, for family office services comes principally from established markets. So we see more interest in Singapore and Hong Kong, which are more established. Second, the clients are the most sophisticated in those markets. Third, the higher the wealth generation in some countries, the stronger the interest in single family offices. I would like to underline China, which is already important now, but in the future will be an even more important wealth management centre requiring single family offices.
What sort of people are setting up family offices? Self-made entrepreneurs, some inheritors, others?
In this part of the world, the wealth mostly comes from entrepreneurs who are still active and very often self-made. Also the size of the family assets should be sufficient to justify the establishment of a single family office.
When people consider setting up a family office, what reasons do they give as to why they want to do so? Do you find that they understand what's involved, in terms of running costs, HR, alignment of interests, ability to source deals?
We have to make clear to our clients that family offices involve operational costs: salaries, rental of offices, and more. So this is not for every client and that has to be understood by families with certain assets: financial assets or other assets that must be managed. So we have the ability to choose whether the solution of the family office is the right one based on the amount of assets held by the family. Otherwise, the main reason is to have more tailor-made management of the family’s affairs, not only the assets, but also the rest of the relationship between the family members that can help to address that as well, and to have a one-stop shop for managing those assets. So there is both a convenience reason and a customisation purpose which is sought by the family.
How should Asian family office founders learn from the experiences of family offices in Europe, the Middle East and North America?
What we have noticed is that the needs of wealthy people are more or less the same all over the world. There are not significantly different needs among wealthy individuals in the US, or Europeans or Asians.
Regarding philanthropy, however, we see that the ideas are more evolved and more developed in North America, in particular, and to some extent also in Europe because the wealth is probably older in those countries. The families have integrated philanthropy as one of their activities, so you see philanthropic activities in the family office as well. This angle has not yet reached the same magnitude in Asia. So that may be an area where Asians can learn from Americans.
How is the family office offering designed to fit in with the rest of what UBP offers, such as alternative investments?
What would be better than a family-owned bank to talk about the family office? I think we are ideally positioned to address those type of needs from the DNA of the bank. That is an insight that has been at the cornerstone of the way we work with clients because we are advisors to clients, first of all, on their portfolios but we can advise them as well on family matters and help them to procure the vehicle for managing those assets. The objective is also to manage the financial wealth of the family office. So this one-stop shop corresponds to the way we work with clients, in terms of advising them through the entire spectrum of family office offerings.
UBP wants to double its share of Asian revenue to 30 per cent in the medium term. How much of a challenge is that going to be in Asia’s competitive landscape? A lot of other banks have made the “pivot to Asia”. Is there enough room for everyone?
Wealth management is a highly fragmented business. We have noticed that clients are dealing with several private banks, and use private banks to get the best each can provide. So there is enough room for everyone and there is reaffirmed potential and interest for UBP to continue growing in Asia simply because the wealth creation in this part of the world is going faster than anywhere else.