Independent Wealth Management Forum 2017 Post Event Report

16 November I Island Shangri-La I Hong Kong

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INDEPENDENT WEALTH MANAGEMENT FORUM 2017 - HONG KONG 3

Summary

Asia’s independent wealth sector – ready for the next leap forward

The independent wealth management sector in Asia is still relatively minor compared to the coverage of the major private banks and other large wealth firms, but those who have already established their business models see even better times ahead.

The Hubbis Independent Wealth Management Forum of November 16, 2017 attracted a wide range of panellists, speakers and attendees who left at the end of the day with a more comprehensive vision of the challenges and opportunities that lie ahead for the independent asset management (IAM) firms and multi-family offices (MFOs) in Asia.

Taking the leap from a corporate job in a major global bank or brand-name wealth management firm is not for the faint hearted. Financial, intellectual and personal resilience is required, along with very hard work. But the rewards, say many of those who have taken this leap, are immense as clients rally to their more bespoke services and come to rely on them as lynchpins in their family wealth preservation and transition.

There is undoubtedly immense and growing pressure on the private banking model as relationship managers often struggle to reconcile the needs of their bosses and shareholders with the best interests of their clients. IAMs believe that this is a key selling point for their models, that smaller firms can offer clients are 24/7 service and are not constricted by the need to sell certain products or solutions.

Additionally, the global regulatory net is becoming larger and more comprehensive. This makes it more and more difficult for the private banks to offer advice, as their compliance departments become ever more fearful of the ramifications, especially in a digital world where technology is creating an indelible fingerprint on every piece of advice and transaction.

This, say many independent advisers, presents a terrific opportunity as the smaller firms are less restricted in their actions, not because they are in any way less bound by regulatory shackles, but because they are answering to themselves or their partners, not to managers and shareholders. This gives them more leeway to provide the advice that in an increasingly tight global regulatory environment, is in ever greater demand. The client is everything to the independent advisory firm. Those taking the leap to form their own firms must be confident that they can pull key clients with them, and can attract important new clients as well as they build their capabilities.

In a world in which the private banks are increasingly under pressure on many fronts, the value of a differentiated, more bespoke approach in the form of genuinely independent advice is also becoming clearer. But there are immense challenges ahead. For smaller firms with modest financial resources, technology is more difficult to acquire and implement, while the major banks and other large-scale advisory firms have the financial and managerial depth to invest in new tech solutions for an enhanced client experience.

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The Asian market has not historically been as receptive to the advisory model as to the product sale and delivery model. However, dissatisfaction with the private banking sector combined with increased global regulation and volatility since 2008 is gradually changing the mindset. Transparent fee structures from the independent firms are helping this acclimatisation. And building additional layers of expertise and competence within the IAMs is also essential to winning and building a wider clientele.

Hubbis also conducted a survey at the November 16 event, producing some interesting results. More than 82% of those polled believe that the independent wealth management model will grow ‘dramatically’ over the next 10 years, while almost three quarters felt that private banks do not act in the best interests of their clients. However, that does not necessarily translate into the independent firms being able to poach all the best talent, as only 47% of respondents believe a ‘significant’ number of private bankers will join independent firms in the next several years.

China is a vast opportunity for independent firms, but at this stage only 35% of respondents have more than 20% of their business from clients based there. There is a warning however to those based in Hong Kong who want to build a China business, as almost two thirds of respondents believe that Hong Kong is becoming less important as a conduit for China, in other words those who want China business need to establish there, or partner with the growing ranks of local wealth management firms.

The conclusion that many attendees reached is that the great opportunities must be matched by well-structured strategies, immense energy and a more than a little resilience. For many who have taken, or who will take, the leap to independence, an exciting future awaits.

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Type of firm

33%

20%

12%

10%

9%

7%

4%

3%

2%

Asset management

IAM/Family O�ce

Insurance

Private Bank

Consultant

Technology

Others

Retail Bank

EAM/IFA

Attendee Profile

Job role

Asset Manager

C-Level

Consultant

Relationship Manager

Business Head

Others

21%

23%

19%

19%

16%

2%

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ABN AMRO BankActive Investments CapitalAdexec CapitalAffin Hwang Asset ManagementAIAM SingaporeAL Wealth PartnersAMG Financial GroupAMG Wealth ManagementAntarctica Asset ManagementANZAP Capital ManagementArete CapitalAsia Frontier CapitalAsia Pacific RIMAsia Plantation CapitalAvenue Asset ManagementAXAAZ Investment ManagementBank J Safra SarasinBank Julius BaerBank of China InternationalBank of East AsiaBIZ TechnologiesBlue Diamond Wealth ManagementBNY MellonCapital CompanyCarret PrivateCathay BankCBH AsiaCFA InstituteCharles MonatCheckmate Asset ManagementChina Everbright BankChina Industrial SecuritiesChongyang International Asset ManagementCIC Investor ServicesCICC SecuritiesCiti

Attendees from these firms

Citi Private BankCommerzbankConfidentem Private OfficeContech EnterprisesContineoCredit Suisse Private BankingDimensional Fund AdvisorsEFG BankEnhanced Investment ProductsEwin Asia CapitalEYFidelity InternationalFinaportFinet SecuritiesFinexis AdvisoryFirst Names GroupfLAB fUNDSFosun Asset ManagementFountainhead PartnersFriends Provident InternationalFubon BankFubon Convoy Asset ManagementGFM Asset ManagementGL Asset ManagementGlobal Precious MetalsGovernment of JerseyGuernsey FinanceGuggenheim Investment AdvisorsHaitong International Wealth ManagementHang Seng BankHealth Passion FundHeavenly Wealth ManagementHKUSTHong Kong Investment Funds AssociationHong Kong Society of Financial AnalystsHuatai FinancialHuiyu Global Family Office Think TankIAM Legacy

Interactive BrokersINV AdvisoryINV PartnersIRM Family OfficeIyer Practice AdvisersJ. Rotbart & Co.JP Asia PartnersJust ServiceJVSakk Asset ManagementJW CapitalKGI AsiaKPMGL&M HoldingsLBN AdvisersLeonteq SecuritiesLGT BankMajor DomusManaged Account PartnersMandarin CapitalManulife Private WealthMarburysMarshMera PeakMercerMMO CapitalMonterosa GroupMorgan Fuel Go SecuritiesMorningstarNeo Risk Investment AdvisorsNoah Private Wealth ManagementOdyssey Capital GroupOld Mutual InternationalOrd MinnettPacific HawkParametrica Asset ManagementPegasus Fund ManagersPhilippa Huckle Wealth Management

INDEPENDENT WEALTH MANAGEMENT FORUM 2017 - HONG KONG 7

Pictet & CiePlatinum Financial ServicesPowership Capital ManagementPrior Asset ManagementPrudential AssurancePureheart CapitalRaffles Asset ManagementRAM Investment AdvisorsRHB Asset ManagementRhoba Financial Services GroupRosemontRui Asset ManagementSaxo Capital MarketsSectoral Asset ManagementSinopac Asset ManagementSpringfield Investment

St. James’s Place Wealth ManagementStandard Chartered Private BankStandard LifeStansberry Churchouse ResearchStirling FinanceStreeton PartnersSumeru CapitalSumitomo Mitsui Trust BankSun Life FinancialSwiss International Asset ManagementSwiss-Asia Asset ManagementSwissquoteTanrich Weatlh MangementTarget Capital ManagementTeamwayTMI

UBPUCAP Asset ManagementValue PartnersVontobel Wealth ManagementVP BankWestoun AdvisorsWinland Wealth ManagementWise TorchWIT Capital AdvisorsWL Capital ManagementWonder CapitalZACD GroupZhong Lun Law FirmZurich Life Insurance

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Speakers

Keith LinEY

Peter DietrichMorningstar

Cyrill ArznerSwiss International Asset

Andrew Hendry Westoun Advisors

Damian HitchenSwissquote

Philipp PiazFinaport

Ann Marlowe CooleyPacific Hawk

David FriedlandInteractive Brokers

Jessica Cutrera Capital Company

Riccardo LehmannSwiss-Asia Asset Management

Richard McgillivrayCFA Institute

David VarleySun Life Financial

Joel TeasdelDimensional Fund Advisors

Mark SmallwoodConfidentem Private Office

Berry Wong Charles Monat

Harmen OverdijkCapital Company

Joshua RotbartJ. Rotbart & Co.

Michael OlesnickyKPMG

Sanjay Iyer Iyer Practice Advisers

Kenneth Ho Carret Private

Harold KimNeo Risk Investment Advisors

Kate CloustonGuernsey Finance

Kevin Lee Zhong Lun Law Firm

Jeroen SimonsSun Life Financial

Anthonia HuiAL Wealth Partners

INDEPENDENT WEALTH MANAGEMENT FORUM 2017 - HONG KONG 9

Steve Knabl AIAM Singapore

Steve LawlessOld Mutual International

Tobias BlandEnhanced Investment Products

Stuart LeckieStirling Finance

Stuart DowdingFirst Names Group

Tama ChurchouseStansberry Churchouse Research

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Key voting poll results The Hubbis Asian Wealth Solutions event in Singapore on November 2 provided fascinating and thought-provoking discussions and talks for the assembled delegates. As usual we also polled the attendees and mined out the following nuggets.

82% of advisers feel that the independent wealth management model will grow dramatically over the next 10 years.

47% of respondents think a significant number of private bankers will join independent firms in the

next few years.

Three quarters of the wealth managers do not believe that private banks act in the best interests of their clients.

Only 25% of existing business is from China based clients, and the majority of those polled believe

that Hong Kong is becoming significantly less important as a conduit to China.

57% of the independent audience indicated they were more likely to use a non-bank for custody in the future.

The respondents were split evenly on whether Hong Kong will develop into the Monte Carlo of Asia.

INDEPENDENT WEALTH MANAGEMENT FORUM 2017 - HONG KONG 11

Independent Wealth Management Forum 2018 -

Hong kong

Tuesday 30th October