Private wealth clients in Asia are looking for bespoke solutions from bankers who understand their personal and business needs.
As wealth continues to accumulate at a rapid pace in Asia, the region’s ultra-high net worth (UHNW) families are facing increasingly complex needs, and seeking out professionals who can help them reach their varied financial goals. To stay competitive in this environment, private bankers must be able to offer a comprehensive suite of products and services, or a “one-bank” approach, especially in a region where many clients are also entrepreneurs who have needs that range from corporate to personal and family finance.
For instance, success planning for business-owning families are more complex than usual given the potential impact that changes in the ownership and management structure may have on stakeholders and family dynamics. Complications for such clients include the need to structure dividend payouts through non-voting preference shares in the family business, or having ground rules about how to fulfill the patriarch’s wishes through binding agreements. Asian clients are also looking to their banks for help in strengthening their businesses in the face of intensifying competition, even as they seek advice in managing their personal wealth from these same entities.
Against this backdrop, it is no longer enough for private banks to offer the best products. Rather, they need to deliver tailored solutions that leverage on a range of different capabilities to meet the needs of their clients. Such a strategy requires financial institutions to align their products, technology, talent, and organisational structure to provide one seamless solution to meet their customers’ needs.
Newer entrants into Asia’s wealth market have been building integrated strategies for their private banking and corporate banking divisions in recent years. As such, more private banks are now working hand-in-hand with other business units to go beyond just meeting their clients’ personal finance needs. While such a universal bank model has been around for some years, today banks are undergoing a systematic transformation in fostering this integration and the way they cover their clients.
“The big difference now is that they (banks) are trying to bring together the investment bankers and private bankers in a proactive joint coverage model,” said Christian Gilmour, leader of wealth management in private banking at Deloitte Southeast Asia in an interview with Citywire.
Asian banks with strong balance sheets and client relationships in the region are well-positioned to provide such an integrated model to private wealth clients. For instance, Singapore’s DBS Bank is one industry player that offers a comprehensive proposition to meet the wealth management needs of Asia’s wealthy families in the retail, investment and corporate banking spaces. This includes providing clients with exclusive access to Family Office and Trust services, Private Equity, Structured Lending, cornerstone investments and Asian deal flows.
Lee Woon Shiu, DBS’s regional head of wealth planning, family office and insurance solutions, says that “UHNW families today require a whole spectrum of services, including advice on family office and governance, immigration issues, trust structuring and insurance solutions”. The bank also helps families in legacy planning. This could involve restructuring existing businesses, especially when the second or third generation is less keen to take over the reins. “Families have become more open in having such discussions on legacy planning that were once taboo in nature,” says Mr Lee.
Clients are also assured by DBS’ reputation as being one of the safest and securest banks in the world. DBS was named “Safest Bank in Asia” for the tenth consecutive year by New York-based trade publication Global Finance in 2018. It is also fourth-safest among the world’s commercial banks and 14th on Global Finance’s list of the World’s 50 Safest Banks.
In today’s complex wealth environment, private banks need to leverage the one-bank strategy for a success or risk falling behind the competition.