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The 2010 guide toJu
ly 2
010 Published in conjunction with:
Bank of SingaporeBDO Private BankHana BankHang Seng Private BankHSBCMaybank
Private Banking and Wealth Management in Asia
PWM-Covers.indd 1 30/06/2010 13:32
Bringing it all back homeAsia may have sailed through the west’s financial crises in good shape but the region’s private banking clients have emerged warier about where they keep their money. Whether it’s in terms of seeking a clearer understanding of investment products, putting money in markets closer to home or simply a greater awareness of risk, investors are making new demands on their bankers. By Chris Wright
Asian private banking has felt a curious impact from the financial crises in
the west. Asian economies, some blips apart, have sailed through every-
thing from US sub-prime to Southern European sovereign debt problems
with little direct impact; their stock markets, though, have plunged with
the rest. And many clients in Asia, diversified into world markets, have
been hit as badly by global problems as if they had been sitting in New
York or London.
Correspondingly, Asian high-net-worth clients, and their bankers, have
done as much soul-searching about risk and portfolio strategy as anyone
else. As elsewhere, there has been a shift away from complexity; an
increasing awareness of the need for a diversified and stable portfolio;
heightened willingness to seek and pay for risk management services;
deleveraging; and a loss of trust in many hedge fund and other alterna-
tive asset managers.
“Clients ask for transparency, they don’t want to fly blind,” says Marcel Kre-
is, head of private banking for Asia Pacific at Credit Suisse. “Knowing what
the risks are is one thing but can the clients stomach the risk if it material-
izes? In 2007, clients and the banks took on enormous risks without being
very clear on what would happen if those risks materialized. They did, and
it cost a number of them everything. The same goes for clients.”
Clients today like their assets to be visible and solid. “People have started
looking at real and tangible assets such as gold and property,” says Aamir
Rahim, CEO of private banking for Asia Pacific at Citi. “Property is real, you
can feel it and touch it, and it doesn’t collapse.”
One of the obvious areas to suffer in this new sentiment is structured prod-
ucts. There’s still room for them, provided people can clearly understand
what it is they’re investing in, but their golden days appear to be gone.
“There’s great suspicion about anything that is not transparent,” says
Debashish Duttagupta, who heads investments for Citi Private Bank in
Asia Pacific. “The days of ‘here’s a new proprietary technology but we
can’t tell you how it works’ are far away. But people are now comfort-
able using what I would call flow structured products, with short tenors,
though they are not anywhere close to the levels of acceptance in the
boom days of 2007.”
Understanding the productPeter Flavel heads the private bank at Standard Chartered and sees a sim-
ilar theme. “As confidence has returned to the markets, we’ve seen clients
prepared to take greater degrees of risk,” he says. But with the return of
risk appetite has come greater suspicion, particularly around counterpar-
ties. “Once upon a time it was: ‘what’s the structured product and what’s
the return?’ Now it’s: ‘I need to understand the product’, and the issue of
what institution stands behind that product is very important.” But there’s
still plenty that can be done within those parameters. “Products around
underlyings of commodities or foreign exchange, people are prepared to
invest in those.”
Renate de Guzman, CEO at Bank of Singapore, reports continuing interest
in structures such as equity-linked notes and range accrual notes, but
like Flavel he says people have become much more selective about the
counterparty behind the structure. “With problems in Europe you have to
be selective with European banks.”
Eventually, though, there’s no choice for private clients but to use a
structure if they want to achieve a particular outcome. Andrea Carl, head
of product and services at Clariden Leu in Singapore, says that although
structuring to trade on a particular idea is out of favour, “a structured
product can make sense to create a certain payout structure you want
to have because of asset distribution”. Kreis sees activity in structured
products with currencies – particularly in light of the fall of the euro – and
commodities as underlyings, though not for long-term products. And
Rahim adds: “There’s always a role for structuring. If you want to take a
view on sterling in six months, you can do that with a forward rate agree-
ment, but if you want a series of options on a particular fixed income
security that’s not publicly traded, you’re going to have to go through the
structuring route.
“Clients ask a lot more questions – as they should – about the fees we
charge, the cost of unwinding and the like,” he adds. “But they are still
interested.”
Still, the lack of volume in structured products has not been great for the
bottom line. “Clients are very cautious in making long-term commitments
to more complex structures and products, and this has an impact on
revenues without a doubt,” says Kreis at Credit Suisse. “Simple products
don’t tend to be as rich in fees as more complex solutions.”
Another area that really felt the brunt of the change in sentiment was
alternative investments.
“We are finding a lot of alternative managers had no clothes, so to speak,
and there’s been a big flight to quality,” Duttagupta says. “Alpha does
exist, but clients have come to realize that there are fewer managers who
can add value compared to the number of people who say they can but
just add leverage.”
Again, this has not been an area where managers or products have
been cut off en masse. Clients do appear willing to distinguish between
different managers, styles and asset classes. “In real estate, people are
comfortable: we’re seeing that through fresh inflows,” Duttagupta says.
“The private equity side of things is much more damaged.” Also at Citi,
Rahim continues to see selective interest in hedge funds, just with greater
scrutiny of the fund structure than before. “People are looking at hedge
funds that have either no gate or a defined one so they can manage their
liquidity more precisely,” he says. “One of the big issues was hedge funds
gating people and not allowing them to take their investments out dur-
ing the financial crisis. Clients now want to know how long their money
will be locked up for.”
Flavel says the increased due diligence that has followed the financial
crisis has an impact here. “A by-product of that is that it favours the
incumbent and larger, stronger players, rather than a new start-up,” he
says. “Pre-crisis, there were a lot of new hedge funds going out and set-
ting themselves up. Now, doing that and getting on the approved list of
a major player is going to be quite difficult.” Carl at Clariden Leu makes a
similar point, saying interest in hedge funds has gravitated towards “more
liquid, USIT-3 types of funds, which have more transparency and liquidity”.
Preparing for rising ratesDespite changes in appetite, product manufacturers are not idle. Dut-
tagupta says Citi is working on ways to address the issues that will arise
when rates begin to rise worldwide, and to provide cheap hedges for that
event. Other clients want to park cash and make a decent return from
it, so Citi is designing short-term, low-risk carry products. It has broad-
ened its property advisory business, developed products to invest in UK
property, has staffed up its investment labs with quants to help with asset
allocation, brought in a new focus on fixed income with detailed credit
analytics brought in from rating advisory teams, and is looking at ways
of investing in themes such as distressed US real estate, or to exploit inef-
ficiencies in commodity markets.
“Nothing dramatically complex,” Duttagupta stresses. “Nothing that will
take more than two minutes to understand.”
Elsewhere Clariden Leu reports an increase in inflation-linked and capital
guaranteed product, and many institutions are busy finding ways to
build exposure to the robust Asian growth story. At local institutions,
BDO Private Bank, for example, is looking for “sectoral and thematic funds,
bonds and appropriate structured products that take advantage of activ-
ity in the power, infrastructure and manufacturing sectors in the region,”
according to Josefina Tan, who runs the business.
“There’s certainly a heightened awareness of the growth stories of China
and India and the countries that are associated with that growth in Asia,”
says Flavel. “But it’s not as simple as saying I want to buy an Indian or Chi-
nese stock. It’s understanding this shift to the east in terms of economic
power and growth, and working out which investments are going to do
well as a result of that. It might be the mining stocks in Australia or Latin
America, the shipping companies handling the resources, or the manu-
facturers selling components into India and China.”
Tied into this is the trend for Asian investors to bring money back home.
“Through the crisis in the US market and now the European market we
have seen Asia sail through relatively undamaged, and at times assisted
by deposit guarantees to reassure investors in domestic markets,” says
Duttagupta. “Asian wealth has been very comfortable with its own mar-
kets.” There is already a flight into emerging markets worldwide, and this
return of capital home exacerbates the trend.
Others say the big themes in the industry are not about product so much
as the way things are sold. “Client assets are spread across different insti-
tutions, jurisdictions, even different team members or family members,
so there is much bigger demand for consolidating a view on to that,” says
Carl. “During the crisis it was a fragment here, a fragment there. Now the
holistic view is much more in favour. The relationship manager is becom-
ing less an investment selector than a strategic adviser for the portfolio.”
Experience countsHas the structure of private banking changed? Kreis at Credit Suisse says
the people mix has changed at the banks. “One of the major changes
would be a shift in focus in the type of relationship managers and invest-
ment professionals we would like to attract,” he says. “Leading up to 2007,
the more bankers you had drove your net money acquisition. It was a
market that was chasing everyone who had an interest in private bank-
ing.” But then everything changed. “2008 showed some of the glaring
shortfalls in the quality of the bankers: the training, the supervision, their
advisory capability. Many of them simply hadn’t been in the industry long
enough and most of them had never seen a downturn. They had never
had to deal with an investment recommendation they made that then
went spectacularly south.”
For Credit Suisse’s part, it has continued to hire – even all the way through
2009 – but with a focus on more experienced relationship managers
and what it calls the solution partners group, “which is in many ways a
private banking internal investment bank that helps clients find solutions
which we then execute through the investment bank”. Existing staff are
more thoroughly trained as a consequence of the financial crisis. “A lot
more effort goes into training and coaching the relationship manag-
ers, upgrading their technical skills,” Kreis says; all its client-facing staff
are now having to go through an 11-module training and certification
programme.
And is the money coming back? Rahim says “clients ebb and flow” and
that the first two months of the year were very strong for Citi, March and
April reasonable and May weaker, impacted by people taking money
off the table through the euro and Greece situation. “We are of the view
that this is a much-needed correction after a much-needed rally – we see
little danger of a double dip, though you can never say that the chance is
zero.” Credit Suisse’s private banking assets in the region are at a record
high of Sfr74.2 billion as of the first quarter of 2010 – a 9.6% year-on-year
climb in the quarter following 45.6% growth in 2009. Net new assets were
Sfr11.5 billion in 2009, and a further Sfr4 billion in the first quarter of 2010.
Domestic businesses, particularly Japan, Australia and Singapore, have
been major contributors.
Private bankers have watched closely the increased scrutiny of Switzer-
land, where the idea of client confidentiality is under threat. Is the same
attention coming to Singapore? Bankers are not worried about the Swiss
situation – which was chiefly about the US seeking tax-evading clients
– because, as de Guzman says, “Asia is more of a low-tax environment”,
and it’s not a place known for harbouring large amounts of US money
anyway.
Regulatory changesThere is, though, regulatory change coming, and not just in terms of the
requirement that clients fully understand what they are buying. Kreis
notes discussion in Singapore about requiring private bankers to be
registered and certified before they talk to clients. What does he think of
that? “I think that’s good,” he says. “We’d like to think that self-regulation
is preferable, but we are seeing more and more banks opening offices
here [Singapore] and Hong Kong to take advantage of the world’s most
dynamic region, and some industry professional minimum standards are
required.”
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Kreis thinks regulators in the region “are paying a lot closer attention
to bankers flying in and out of countries. The days of unlimited unfet-
tered travel and advisory activities in the countries where bankers
visit their clients – those days are over. You are going to see a much
tighter regime around international private bankers travelling into
different jurisdictions.” This has a consequence for clients: increasingly
they are going to need to come to Hong Kong and Singapore for port-
folio and investment reviews, where there are established systems
for legal, trust and product support. This is one reason Credit Suisse is
opening its branches on Saturday mornings, to allow people in places
like Indonesia or Malaysia to come in while passing through on leisure
or to see family at weekends.
Flavel says: “There will be greater pressure because governments
around the world are seeking greater tax compliance and looking for
ways to ensure there are less avenues for people not to comply with
onshore taxation. But it’s not going to affect the amount of money
booked in private banking in Hong Kong and Singapore.” He adds,
though, that “there is a trend of people putting money onshore,” such
as people in India seeking to participate in their own nation’s growth
story.
On balance, the market looks brighter in Asia than it does elsewhere
in the world. “You see in Hong Kong and the east a natural exuber-
ance about the future,” says Flavel. “People are still quite upbeat and
confident even despite the recent volatility. Go to Europe and it’s
almost despondent. Issues around privacy and secrecy in Europe
and Switzerland have taken quite a heavy toll on the way people feel
about private banking in Europe. Here, it’s not happening to anything
like the same degree.”
Different positionsThe financial crisis brought into stark relief the three distinct structures
of private banking in Asia. There are the private banking arms of the
global powerhouses, such as UBS and Citi; the Swiss specialists doing
nothing but private banking, such as Clariden Leu and Pictet; and the
local Asian institutions with private banking operations. They make for
a competitive environment which the financial crisis did nothing to thin
out. “If anything the field has gotten more crowded,” says Kreis.
Unsurprisingly, people’s views on the future of private banking depend
very much on where they’re sitting. The big see the virtue in scale; the
small see the virtue in focus; the local see the virtue in Asia.
“The landscape will increasingly shift towards banks that can provide
full service private banking and bring genuine global advice and prod-
uct capability to clients, rather than private banks that are boutiques
and don’t have a global footprint in terms of research and product
execution,” says Duttagupta at Citi. “Our client needs are becoming
increasingly institutional and sophisticated in nature. Private banks that
are part of larger banks can tap into that capability.”
The Swiss specialists see their own approach as the way to go. “For us,
this model has worked for 250 years,” says Carl at Clariden Leu. “We have
just the private banking clients to focus on. The future is bright for pure
private banks.” Asked about clients wanting to see public data about
these most private of private banks, she points to Sfr100 billion under
management and a tier one capital ratio of 24.6%. “They feel a lot more
comfortable putting deposits in our bank, particularly during the crisis.”
She claims “very good momentum” in flows.
Local domestic banks claim to have come through the crisis with little
impact, and gained in terms of flows. Josefina Tan, who heads BDO
Private Bank in the Philippines, says “the global financial crisis had
minimal effects on the assets of clients” with her institution. “Although
the majority of the assets were in local currency [the Philippine peso],
even the foreign currency assets did not suffer the massive valuation
swings brought about by the violent market volatility.” She attributes
this to the fact that banks like BDO have never offered risky or complex
products, focusing instead on the basics of capital preservation and
estate planning.
She says her bank “was a beneficiary to the inflow of investments back
home: a flight to safety, so to speak. Clients who have made investments
abroad would select a strong and robust domestic financial institution
with the experience and expertise in handling private banking funds.”
One institution uniquely well positioned to comment is Bank of Singa-
pore, the private banking subsidiary of OCBC, the Singaporean bank.
This is primarily made up of the private banking business that OCBC
bought from ING.
Today, Bank of Singapore’s CEO, Renato de Guzman, pushes the
advantages of local ownership: strength of the parent (OCBC is rated
Aa1/AA+, higher than many global peers), the fact that Asian banks had
little exposure to toxic assets or European sovereign debt, and a vast
branch network to reach the local population (382 branches in Indone-
sia, for example, and a full bank licence in China where it offers banking
services in seven provinces.) “For those who want to diversify out of
Switzerland into Singapore, we are a different proposition to a branch
of UBS or HSBC or Credit Suisse,” he says. “We are a locally-owned Singa-
pore bank with expertise in global private banking.”
Local private banks in Asia universally claim to have received inflows as
a consequence of mounting suspicion of western institutions through
the financial crisis. “During the crisis a lot of money went from the
international banks to the local banks because they are easier to under-
stand and better regulated,” de Guzman says. “ING was very difficult to
understand: insurance, banking... and when you look at the capital ratios,
OCBC’s tier one ratio is 14%, whereas ING’s was 6, 7%. Generally the Eu-
ropean banks are undercapitalized, overleveraged and have exposure to
the PIGS [Portugal, Italy, Greece, Spain] countries.” He feels the combina-
tion of businesses in western banks also causes problems. “You see very
complicated models in the US where investment banking and private
banking platforms have been combined and got them into trouble.”
Whichever model works best, one interesting development is the
degree of international seniority in the region. Standard Chartered has
its international headquarters for private banking in Singapore; JP Mor-
gan’s private bank international head is now in Hong Kong; and Citi’s
international private banking head (that is, head of private banking
operations outside the US) is in Singapore. Singapore is one of only two
key booking platforms for Clariden Leu, the other being the home office
of Zurich. “You really are seeing in Asia some very senior executives of
global private banks being based in Asia,” says Flavel. “That reflects the
shifts to the east. These are not Asian outposts; banks are voting with
their feet and moving their senior executives to Asia.”
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Bank of Singapore: Asia’s global private bankFormerly known as ING Asia Private Bank, Bank of Singapore is now a wholly owned subsidiary of OCBC Bank and inherits the strengths of one of Asia’s premier financial services groups – the second largest in Southeast Asia by assets
Formerly known as ING Asia Private Bank, Bank of Singapore is now a
wholly owned subsidiary of OCBC Bank and inherits the strengths of
one of Asia’s premier financial services groups – the second largest in
Southeast Asia by assets
With a branch in Hong Kong and offices in Manila and Dubai, Bank of
Singapore, Asia’s global private bank, serves high-net-worth individu-
als and wealthy families from China, Taiwan, Hong Kong, Indonesia,
Malaysia, Thailand, Singapore, the Philippines, Japan, South Korea, the
Middle East and Europe as well as global non-resident Indians.
Operating as a dedicated private banking subsidiary with headquar-
ters in Singapore, Bank of Singapore embodies proven expertise
combined with Singapore’s unique brand and extraordinary attributes
as a thriving financial centre of international repute.
Backed by an experienced and distinguished team of professionals,
Bank of Singapore presents the best of both worlds – combining
a global private banking approach with a fully open architecture
product platform and proprietary research to ensure truly independ-
ent advice.
Personal serviceBank of Singapore’s private wealth approach is built on a personal and
highly individualised service. A dedicated professional will act as the
single point of contact for all client transactions, managing all aspects
of client financial requirements with the backing of a team of financial
specialists.
With our experience and resources, we take a bottom-up research
strategy and develop solutions tailored to suit every investment
objective. Coupled with OCBC Bank’s extensive branch network (both
domestic and global) and its recognised expertise in retail, mortgage
and SME banking as well as stockbroking, insurance and investment
management, clients will enjoy privileged access to a wide suite of
investment, banking and financial services across the region.
Discretionary portfolio managementDiscretionary portfolio management is one of the many products
that we are proud of within our complete package of products and
services. Our team consists of many experienced investment profes-
sionals with backgrounds from highly regarded financial institutions.
With our robust risk management yet flexible approach, we are able
to customise portfolios that suit ultra-high-net-worth individuals. The
team leverages on good security selection of our analysts and timely
execution of our traders to manage portfolios with clear direction
from our monthly investment guides.
Minimum assets per client are USD 1 million and total assets stand at
more than USD 23 billion.
Rating upgrades and awardsOur parent, OCBC Bank, was recently upgraded by Moody’s from AA+
with negative outlook to AA+ with stable outlook. Moody’s highlighted
the capability of OCBC Bank to navigate through the financial crisis and
its ability to deliver financial results in the current year similar to pre-crisis
levels. On 24 May 2010, Moody’s gave a similar rating of AA+ with stable
outlook to Bank of Singapore, recognising the financial strength and
stability of the bank as well as it being a member of the OCBC group. This
rating is made more meaningful in the current environment where we
are seeing more downgrades particularly of sovereign credit (Greece,
Spain, Portugal) than upgrades. In contrast, OCBC Group is highly capital-
ised with a tier one ratio of more than 14%.
Bank of Singapore also recently received the Euromoney award in the
Philippines for Best Private Bank for relationship management and Best
Private Bank for range of investment products. As Best Private Bank for
relationship management, this award recognises our high standards for
service excellence and our good understanding and management of our
clients’ private banking needs.
As best private bank for range of investment products, it affirms the
strength of our unique open architecture product platform, strategic
investment views and high quality products.
Since the launch of Bank of Singapore, we have been successfully offering
our clients the capabilities of OCBC Bank in different countries in Asia in
the areas of commercial lending, property financing and retail banking.
All these services that we were not able to offer before have been well
appreciated by our clients.
Apart from our truly global capabilities, we also distinguish ourselves
through our complete banking relationship with our clients. Our clients
benefit from professional and reliable advice, and solutions to their per-
sonal as well as business needs through the combination of the strengths
of OCBC Bank in commercial and retail banking with Bank of Singapore’s
strength in private banking.
Says chief executive officer Renato de Guzman: “Bank of Singapore is
Asia’s global private bank, the only private bank operating as a dedicated
private banking subsidiary with headquarters in Singapore. We are well
positioned to help our clients in both preserving and growing their
wealth, and as an independent entity with dedicated resources, we are
able to react to clients quickly.”
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Philanthropy: the next generationPhilanthropy is constantly growing and evolving, which is why it is essential to get younger family members involved as early as possible, says Cynthia D’Anjou-Brown, senior adviser, philanthropy and governance at HSBC Private Bank in Hong Kong
For many outside observers, it might seem that giving away money
is a straightforward task. However, the practicalities of philanthropy
are more problematic than one might assume. Often philanthropy
involves giving by more than one individual and may involve an entire
family. Necessarily, getting others to agree on a charitable mission can
be time-consuming and complicated.
At the same time, in considering where to commit funds it is important
to understand what other donors are doing, especially governments
and non-governmental organizations. Moreover, given myriad charities
– and the growing importance of social entrepreneurship and social
enterprises for philanthropists – it is essential to be able to differentiate
organizations that ostensibly have similar goals and strategies.
Similarly, potential donors have to know how to marshal evidence to
support their charitable decisions and understand how the effec-
tiveness of a donation can be judged in terms of its social impact.
Ultimately, philanthropy is pointless unless it makes a difference. HSBC
Private Bank is committed to helping its clients achieve that goal by
supporting every aspect of philanthropy.
While many banks simply offer legal services, HSBC Private Bank rec-
ognizes that giving is about much more than that. Our continuum of
services ranges from determining the focus for giving and helping the
client to source and review charities through to the legal set-up. We
also help clients to continue to evaluate the merits of their philan-
thropic choices.
Continuity and stabilityMany business families are complex and fragile – they evolve through
generations and have differing needs and priorities. Nevertheless, the
goal of most families is to safeguard their prosperity and leave a last-
ing legacy. Of course, one aspect of this legacy is the continuity and
stability of their business and the preservation of wealth. However,
philanthropy can play an equally important part in creating an ap-
propriate legacy.
Philanthropy can offer a unique opportunity for business families by
acting as a meeting point for all generations. It can create a role and
a voice for family members who are not involved in the family busi-
ness. As importantly, it provides a chance to stimulate the interest of
younger members of a family to take responsibility and learn about
the importance of stewardship of resources. Philanthropy also helps
to establish the boundaries around the intersection of family life,
community life and business.
It is often said that exemplary philanthropists are a reflection of good
parenting – the explanation being that the values instilled by parents,
including their attitude to charitable giving, are handed down to
their children. The benefits of practising philanthropy – and involving
children in it – are therefore twofold: it encourages giving by children
in later life and, more broadly, it reinforces the core beliefs and values
held by a family. In short, philanthropy is an excellent way to put into
action a family’s values and aspirations and reflect its ethos in a more
tangible and timeless way than property or other assets.
Passing on the giving habitIt is easy to talk about passing on deeply held family values to chil-
dren but in practice it is hard to achieve. Research from the Pearson
Foundation in 2010, the non-profit arm of international media com-
pany Pearson, shows that parents often do not do as good a job as
they think in raising children to become charitable adults. One of the
main reasons for this is the frequent absence of dialogue regarding
philanthropy.
While no one disputes the importance of being a giver, many people
do not speak openly about their voluntary and charitable work.
There are good reasons for this. In all cultures, but especially in Asia,
modesty is perceived as a positive attribute and that may discourage
people from talking about their philanthropy.
However, it is not immodest for someone to explain their philanthropy
if it enables children to learn how their actions can impact others. As
crucial as it is to explain the scale of giving, it is perhaps more impor-
tant to pass on an understanding of why philanthropy is important for
that individual.
By being more explicit about how deeply we care about giving back
to others, it is possible to make a significant contribution to nurturing
the next generation.
How HSBC Private Bank can helpHSBC Private Bank works with philanthropic families that span
several generations and through its experience over many years
has developed some common approaches and models. Our models
allow children and young people to learn through experience and
ultimately encourage and nurture giving and build an understanding
of why it is important.
One such way to encourage the involvement of young people is to
ask them to explore and research issues of interest to them. By stimu-
lating an interest in a particular cause – and developing a practical
understanding of the issues and challenges surrounding that cause
– it is necessarily easier for them to make the leap to philanthropy.
A possible next step, perhaps for children aged 12 and over, could be
to establish small charitable funds to be allocated by the children. Such
a strategy enables them to learn the practicalities of how money can
most effectively be put to use. Moreover, by encouraging children to
contribute some of their own money, such funds can be the start of a
philanthropic career. Encouragement from the family can be offered
through the provision of matching funds.
A more formal model for involving young people in families’ philan-
thropy could involve the establishment of junior boards. These can
offer an opportunity for individuals to develop a deep understanding
of a good cause while developing skills that broaden their abilities as
philanthropists. The activities of junior boards vary considerably – from
fundraising efforts and developing local partners to voluntary service
to more traditional charitable donations – but all are beneficial in imbu-
ing younger members with the philanthropic ethos of the family.
Tapping the potential of the youngWhile it is important to develop an interest among young members of
the family in charitable giving for its own worth – and because of the
broader benefits it delivers in terms of creating moral and confident
adults – philanthropic education also has a role to play in preventing
animosity between older and younger members of a family. Put simply,
if children are not involved in the family’s charitable efforts there is a
risk that they will resent family funding going to charity – they may
view philanthropy as a means of reducing their inheritance.
The key to successfully involving the next philanthropic generation is to
understand that they are different people to their parents so that their
interests are reflected in family giving. For example, many young people
feel an empathy with environmental and animal welfare causes that
their parents may not appreciate and they may also be more interested
in funding programmes rather than capital projects.
Similarly, it is also essential to gauge the talents and strengths of young-
er family members so that effective use can be made of them and that,
in turn, the individual feels valued.
For example, HSBC Private Bank’s experience is that many next-gen-
eration philanthropists enjoy the challenge of solving social and
environmental problems using their business acumen, leverage and
entrepreneurial aptitude. They may also want to be more personally
involved in projects, including through voluntary service, and many
younger people show an interest in accessing the outcomes of their
charitable involvement rather than just their inputs in a way their
parents might not.
Harmonious familiesHSBC Private Bank is committed to the preservation and growth of
harmonious families and we believe that one of the best ways to
achieve that goal is through involving younger members in a family’s
philanthropy.
To that end, HSBC Private bank has developed a wide range of strate-
gies and tools to encourage children and young people to take an
interest in giving and develop the skills to ensure their philanthropy
is effective.
One of HSBC’s most popular programmes is the Legacy model that
helps young family members to learn through seminars, experiential
learning and peer dialogue about the many challenges faced by them
as members of a business family. We also offer forums on family govern-
ance and succession planning issues.
HSBC Private Bank is open-minded and constantly looking for new
ways to help families achieve their philanthropic goals. For example,
one of our newest research projects is trying to capture the experi-
ence of Asian daughters and mothers in business families – a dearth of
information is available on this subject.
Whether in research, practical assistance or guidance, families can be
confident that HSBC Private Bank has their interests at heart in work-
ing to help the next generation and ensure a smooth succession. We
believe that philanthropy is a truly unifying and ageless activity and has
an inclusive role to play in promoting families and creating a harmoni-
ous life – and we work hard to do everything we can to support it.
For further information, please contact
HSBC Family Office Services Limiteda non-bank member of the HSBC Group Level 13 HSBC Main Building1 Queen’s Road CentralHong KongTel: 2533 6333Fax: 2869 1492Email: familyoffice@hsbcpb.com H
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“Philanthropy is an excellent way to put into action a family’s values and aspirations and reflect its ethos in a more tangible and timeless way than property or other assets”
Cross-generational personal asset management From implementing systems designed to capture inter-generational wealth transfers, such as family business succession planning and trust and estate services, to hosting matchmaking nights for young clients, Hana Bank continues to increase its value as a leading private bank in South Korea
Having started financial planning for high-net-worth individuals in 1971,
Hana Bank is proud to be recognized as the first domestic bank in South
Korea to implement a private banking model. The bank merged with a
number of commercial banks in the late 1990s and early 2000s, becoming
a financial conglomerate with components operating in banking, securi-
ties and insurance.
While it grew its total assets under management to 192 trillion won
in March 2010, Hana Private Bank draws on the strength of the Hana
Financial Group, providing a comprehensive range of financial services
to our private banking customers. Winning Euromoney’s ‘Best Private
Bank in Korea’ for six consecutive years, Hana Bank clearly underlines the
continued strength of its reputation in private banking business.
Hana Bank’s driving force is brand and business development services.
The bank has built a team of expert professionals in the fields of real
estate, tax planning, and investment funds. The Hana Bank team has
developed the experienced project planning leaders and skilled support
staff essential for effective wealth and investment management, provid-
ing bespoke private banking services to high-net-worth individuals and
their families through 170 branches across the country.
Unique client servicesHana Bank designs and promotes products and services differently to
meet the needs of different age groups. In the rapidly ageing Korean so-
ciety, many of our elderly clients visit a branch for wealth transfer and es-
tate planning advisory. With a warm welcome to these clients, the bank’s
financial experts make sure that assets pass from one generation to the
next in a smooth and orderly manner. Through its knowledge of estate,
gift and income taxes, for instance, the team offers carefully conceived
and executed estate planning as a trusted family office.
Hana Bank provides cross-generational personal services as parts of
its diversified Total Life Care Services in an attempt to engage multiple
generations: a private funeral service, a matchmaking service, thematic
overseas travel, study-abroad consultancy service - you name it. Clients
can be provided with all lifecycle services throughout their lives, from the
cradle to the grave. Among Hana Bank’s unique services are:
Seniors: funeral limousine serviceWhen customers or their families pass away, the bank provides a lim-
ousine for the funeral or memorial service. Hana Bank introduced this
service to South Korea and is still the only bank that provides it.
Active seniors (age between 40 and 60)Our Gold Club clients’ greatest interest is often their children’s marriage.
To fulfil this need, the bank provides a personalized matchmaking service.
Begun in 2003 for the first time in South Korea in the financial sector,
the matchmaking service has become Hana Bank’s signature premium
service. About 50 children of clients, in their late 20s and 30s and still
single, are invited to the nights once or twice a year, held at the best
luxury hotels like Marriott or W Hotel. In the seven years that the bank has
been running these nights, 20 weddings have resulted. Those who have
participated in the nights are also welcome to join the bank’s club HPBM
(Hana Private Bank Members). In this way, the bank hopes to get to know
the children of its Gold Club clients better and attract them to become
major clients of the bank in the future.
Youth: study abroad consultancy serviceKorean parents make enormous efforts to educate their children. The
bank’s study-abroad planning is thus perfectly suited for our major cli-
ents. To meet this educational need, the bank established an alliance with
one of the top education consultation organizations. Educational experts
with immense experience give relevant advice to clients.
Hana Bank is focused on further strengthening its range of private bank-
ing products and services, such as the Domestic Tour Service and Arts
Academy, and the bank will continue to integrate its private banking
operations successfully, which eventually adds value for clients.
For further information, please contact
101-1, 1Ga, Eulgiro, Jung-Gu, Seoul, 100-191, KoreaTel : +82 2 2002 1740Email : hanair@hanafn.comWebsite : www.hanafn.com
BDO: private banking with a local edgeBDO Private Bank proves that a domestic bank can deliver a private banking service that can compete with the global players
Although the private banking and wealth management industry is
still dominated by foreign banks, rising standards of living and an
explosion in per capita income in emerging economies, particularly in
Asia, will lure local banks to compete for market share with interna-
tional banks.
According to Goldman Sachs’ demographic projections and model of
capital accumulation and productivity growth, Brazil, Russia, India and
China (more popularly known by the acronym ‘BRIC’) will continue
to be a major force in the world economy over the next 50 years.
These nations currently account for about 2.5 billion people or over
one-third of the world’s population. Average income per person in
India and China will increase by about 3.5 times to $3,000 and $10,000
respectively in 2030.
China’s exponential growth, according to a Franklin Templeton study,
has brought tremendous demand for consumer durable goods,
particularly in the countryside. The percentage of households in rural
areas that now have refrigerators, washing machines, mobile phones,
colour televisions has risen dramatically from non-existent levels in
1992. China could have more millionaires than the US in the next 10
years. The rapid economic development of China and India should
benefit Southeast Asia through rising intra-regional trade. For the
Philippines alone, BDO Private Bank Research forecasts per capita
income will jump by 300% in the next decade.
This explosion of purchasing power and wealth is expected to
increase the number of people requiring private banking and wealth
management services in future. A recent study estimates that Filipinos
account for $15 billion-20 billion of wealth managed outside the Phil-
ippines. The level of Filipino wealth is expected to expand dramati-
cally in the years to come.
Domestic private bankingIn past decades, Filipinos have sought the security of offshore jurisdic-
tions to keep their money safe, sacrificing the potential for growth.
While safety remains a key objective, the more important need to
preserve and grow wealth has now taken precedence. The liberaliza-
tion in banking as well as in other finance-related sectors has brought
in knowledge and new skills, nurturing a new breed of dynamic and
innovative local bankers, who are experts in their respective fields.
Our new banking professionals are now capable of servicing clients to
achieve not only their financial objectives but also their trans-genera-
tional aspirations. Domestic banks are now better prepared to handle
the wealth management needs of fellow Filipinos.
In what ways can a domestic bank excel in providing private banking
and wealth management services to the Philippine market? First, local
expertise and constant presence assure clients regular updates and
performance of accounts in both good and challenging times. Second,
employing an open architecture framework allows local private banks
to access financial products and other services from different institu-
tions, providing best execution in managing their wealth and not just
selling financial products. This change in paradigm puts clients’ needs
first in meeting their long-term performance objectives. In addition,
the integration of varied insights and research outputs from different
institutions help clients understand and evaluate an uncharted eco-
nomic landscape and the range of possible outcomes.
Third, local private bankers can easily form a diverse team of experts
specializing in investment, tax strategies, estate planning and
philanthropy to respond quickly to the needs of clients. Fourth, local
private banks can consolidate all the offshore and onshore holdings
of affluent clients to improve overall performance and evaluate if their
objectives are being achieved.
Clients have realized that they need not just to preserve wealth, but
more importantly to ensure that its value continues to appreciate
under the prudent care and management of a trusted adviser. Assets
like properties may deteriorate over time if not properly maintained,
investments have to be reviewed with constantly changing market
conditions in mind, insurance policies, titles and other documents of
value can be kept in a secure place and access given to designated
persons if the inevitable happens.
“As a domestic private banking institution, we have the advantage of being in touch, on call, on demand for our clients”
Aside from being the repository and administrator of assets, a domes-
tic private bank can also act as executor and distribute clients’ assets
as provided for in a will or a letter of wishes attached to the trust
arrangement.
Therefore, domestic or local banks are seen to join in providing wealth
management services to the new affluent or emerging affluent in
the future. Instead of competition, we expect local private banks to
partner with both local and foreign financial institutions in delivering
the best service and execution for their clients. Wealth management
is expected to become part of a domestic bank’s core activity in the
future.
The BDO Private Bank experienceBDO Private Bank was the first to find this fertile ground for a new
and unique business initiative. It is focused and committed in build-
ing a private banking business based on a comprehensive wealth
management platform. Though operating under a commercial bank-
ing licence, we have decided to focus our resources in offering and
creating customized investment products to achieve clients’ specific
goals for wealth accumulation and growth, structuring bespoke en-
gagements that cover financial investment and advisory, investment
management and, more importantly, providing clients with assistance
in creating their estate.
As a domestic private banking institution, we have the advantage
of being in touch, on call, on demand for our clients. Being on the
ground and knowing what is happening locally and globally give
clients the security and confidence that their trusted adviser is but
a phone call, a text message, a fax or a few blocks away. Our proxim-
ity to our clients allows us to be pro-active through planning and
advisory and, more importantly, hand-holding, guiding and reassuring
clients during periods of crisis and market volatility.
Being domestic does not mean being confined to local affairs and
concerns. Domestically-rooted yes, but more importantly with a
global perspective. In this electronic information age, clients are
deluged with data from all forms of media and information channels.
Clients need independent and unbiased expert help to digest the
data into meaningful information that can be used to make invest-
ments and life decisions. The open architecture philosophy starts with
accurate and reliable information on the macro-economy, markets
and products to produce strategies that will seek to achieve the goals
and aspirations of a client. More importantly, the open-architecture
approach allows clients access to best-of-breed products, not only
within the local environment, but on the principle of best execution,
access to appropriate products onshore and offshore. If what best fits
the client’s objective is in the bank across the street, we will not ask
the client to cross the street and find out for himself, we will tell the
client that there is a better offer and, if he allows us, we will cross the
street and get that product.
A core business for domestic banksThe domestic banking industry does not lack people of brilliance, skill
and talent. The exposure of Filipino banking professionals to global
financial institutions upgraded their expertise in offshore markets and
enhanced the knowledge base. This has created a pool of financial ad-
visers, investment bankers, financial risk specialists and legal and fam-
ily estate lawyers that domestic banks can use as a resource to create
the platform from which to deliver a domestic private banking service.
We are properly positioned to take advantage of this opportunity.
There is a growing market, a ready pool of local experts and a banking
platform to deliver a truly domestic private banking service.
The experience of BDO Private Bank is proof that there is a niche for
domestic banking institutions to focus on private banking. Interna-
tional recognition proves that the bank’s model for private banking
is workable and sustainable as a business. A domestic bank can
excel and deliver private banking and wealth management services
relevant for the Filipino emerging affluent.
The opportunity and the challenge for domestic private banks is to
create a true private banking platform to serve the needs of domestic
clients.
For further information, please contact
BDO Private Bank, Inc.27/F Tower One, Ayala TriangleAyala Avenue, Makati City, 1226, PhilippinesTrunk Line: +632 848-6300Facsimile: +632 848-6306Email: wealthadvisors@pb.bdo.com.phWebpage: http://www.bdo.com.ph/Wealth_Management/Private_Bank/index.htmLounges: Greenhills, Alabang, Binondo, Cebu and Davao BD
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Gamalielh Ariel O. BenavidesSenior Vice President and WealthAdvisory & Trust Group HeadBDO Private Bank, Inc.
Safe and secure in a turbulent worldSince the financial crisis, Hang Seng’s wealthy customers have been paying particular attention to risk management. The bank feels it can provide the stability and security they need
More and more people are turning to Hang Seng Bank’s private bank-
ing services, seeking certainty and solidity in an uncertain and unstable
world. Hang Seng Private Banking offers customers from Hong Kong,
mainland China and Taiwan – as well as from across the world – pre-
mium private banking services as well as direct investment access to
China, the world’s fastest-growing major economy.
As one of Hong Kong’s – and also Asia’s – strongest and most diversi-
fied lenders, Hang Seng Bank came through the global financial crisis
unscathed. That is proof that its long-term devotion to risk manage-
ment has paid off. In a more turbulent world, it is more vital than ever
for investors to feel safe and secure.
Hang Seng Bank offers its high-net-worth clients premium, tailored
private banking services, including custodian, insurance and investment
management services, offshore private banking, property asset man-
agement and advisory services, and credit facilities. It offers a diversified
investment platform, allowing busy investors to relax in the knowledge
that their assets are both safe and gaining strongly in value.
Certainty and stabilityHang Seng offers certainty and financial stability. “Since the financial cri-
sis, more people have shifted their focus toward risk management and
wealth protection services,” says Rosita Lee, assistant general manager
and head of private banking and trust services at Hang Seng Bank.
“We are a highly trusted brand,” says Lee. “We are one of the largest
banks in Hong Kong in terms of market capitalization.” Lee adds that
ever more emphasis is placed on product innovation. “We are able to
provide special wealth management services for premium custom-
ers while allowing them to enjoy our strong branch network in Hong
Kong.”
Hong Kong remains the centre of Hang Seng’s private banking opera-
tions, catering to the city’s high-achieving professionals and entrepre-
neurs, providing everything from the trading of securities and invest-
ment funds to property management and advisory services.
Hang Seng is also expanding rapidly around the region, providing
premium private banking services to high-net-worth customers from
across the Chinese-speaking world. Hong Kong’s successful Capital In-
vestment Entrant Scheme (CIES), which permits non-Hong Kong inves-
tors with more than HK$6.5 million in fixed assets, including property, to
invest in the city, has been hugely successful. That has led more people
to open private banking facilities with Hang Seng.
Targeting China“China is our strategic target,” says Lee. “China has overtaken the UK
as the country with the fourth highest number of HNWIs in the world.
That gives us a huge advantage, as does our strong, strategic position in
Hong Kong as a local bank that understands the culture and perspec-
tive and needs of mainland Chinese customers.”
As times change, so do customers’ demands. Pre-financial crisis, many
premium customers sought new products that maximized immediate
market potential. But as the world recovers from recession, customers
are seeking to ensure that their wealth is preserved. Hang Seng has
invested heavily in private trust services to ensure the financial stability
of future generations. It has also introduced facilities that help potential
non-Hong Kong citizens apply for CIES services quickly and efficiently.
An increasing proportion of Hang Seng Private Banking customers are
in their thirties or early forties, doctors, accountants and business opera-
tors who work hard and seek to ensure their wealth is both actively and
securely invested. Mainland customers tend to be cut from a slightly
different cloth – many are business owners, entrepreneurs who have
different needs and concerns from Hong Kong customers.
Hang Seng’s front-line private banking team is pivotal in ensuring that
the bank gives customers its best possible service. “We always need a
full understanding of our customers’ wealth management needs,” says
Lee. “Our customers’ time is very precious to them. Some customers may
want you to get straight to the point, while others may need time to get
comfortable with you and build a rapport. So it’s vital that we create a
tailored wealth management solution for each of our clients.
“Hang Seng Private Banking helps take care of your financial matters.
Your wealth will be preserved and will grow, ensuring that you hand on
a solid financial platform to the next generation. Hang Seng Bank devel-
ops and hones a secure, lasting financial legacy for all of our premium
private banking customers.”
For further information, please contact
Hang Seng Private Banking Service Dedicated phoneline : 852 - 2198 3288 www.hangseng.com.hk
Maybank strengthens its foothold in the Asian regionRobust economic growth in Malaysia, and its ASEAN neighbours, is expected to stimulate the wealth management sector. With its strong record and extensive distribution network – with offices in 14 countries - Maybank is positioned to cater to vast growth in demand from the region’s high-net-worth individuals
Maybank is Malaysia’s financial services leader with over 1,750 offices
across 14 countries. It now serves more than 16 million customers.
Its products and services cater to all segments of the community,
ranging from individuals to small and medium enterprises and large
corporates.
In the area of wealth management, Maybank is the recognized leader.
It has consistently been selected by Euromoney as Malaysia’s provider
of Best Private Banking Services Overall. Maybank’s wealth manage-
ment services, first established in 2007, have seen significant growth
since their inception, with the customer base growing by more than
25% a year from 2007 to 2009 and total financial assets increasing by
50%.
The unveiling of the New Economic Model by the Malaysian govern-
ment in March 2010 aims to create a high-income nation by 2020,
which is expected to provide a boost to the wealth management
services segment. As such, Maybank Wealth Management sees bright
prospects in this area.
Rising affluence in the region, particularly in MalaysiaWhile there are still lingering concerns about the recovery path for
the global economy, the ASEAN region has achieved an upward
growth momentum at a quicker pace than the developed economies.
Major Asian trading partners have registered robust GDP growth in
the first quarter of 2010, while the Asian Development Bank predicts
growth exceeding 7% in Asia over 2010 and 2011. The Malaysian
economy expanded at a decade high of 10.1% during this period,
while the IMF World Economic Outlook issued in April 2010 projected
that most ASEAN countries will see robust growth averaging 5.2%,
well above the global financial crisis average of 1.7%.
Growth in the financial position of high-net-worth individuals in
Asia-Pacific is expected to be healthy from 2008 to 2013. This rate of
growth, measured by financial wealth, is projected at 12.8% annually,
and will potentially outpace other developed regions, such as North
America and Europe.
Managing growing affluence in MalaysiaThe better-than-expected rebound in the domestic and regional
economies is expected to provide the impetus for healthy growth in
the high-net-worth market segment, especially in Malaysia.
Maybank Wealth Management, through its extensive distribution
platform of Maybank Private Banking centres, has embarked on a
host of strategic initiatives to serve this segment of customers better.
We provide products and services catering to a diverse spectrum of
needs, encompassing cross-border transactions and seamless offer-
“While there are still lingering concerns about the recovery path for the global economy, the ASEAN region has achieved an upward growth momentum at a quicker pace than the developed economies”
Teh Cheah May, Maybank
ings within Maybank Group. For example, high-net-worth individuals
are now able to apply for foreign property-related financing here in
Malaysia – choosing between ringgit- and foreign currency-denomi-
nated packages.
Reaching beyond the domestic marketExpecting stronger growth in the region, Maybank Wealth Manage-
ment has set its sights on expanding its market beyond Malaysia.
Private banking clients today gain instant recognition at all Maybank
offices across the region, tapping into markets wherever Maybank has
a presence.
Maybank has offices in 14 countries, seven of which are in ASEAN.
Maybank Private Banking customers enjoy exclusive benefits and
privileges, complemented by the highest level of service in all these
locations.
AspirationsAsia is projected to lead economic growth at 6.9% a year. This is
significantly higher than the estimated 4.2% global growth rate. Based
on this optimistic projection, combined with the rising number of
affluent and high-net-worth individuals in the region, and especially
in Malaysia, Maybank believes in the vast growth opportunities of
the wealth management industry. The bank is set to capitalize on
this niche market segment by leveraging on our vast resources and
expertise within the Maybank Group.
This year, Maybank celebrates its 50th anniversary in the year of the Ti-
ger, with the theme ‘Close to You’. This resonates with the spirit of the
Maybank brand, serving customers and all communities in urban and
non-urban areas, bringing banking convenience, enriching lives and
contributing to the prosperity of the peoples and nations it serves.
For further information, please contact
Teh Cheah MayExecutive Vice PresidentHead, HNW & Affluent Banking,Community Financial Services,Level 34, Menara Maybank,100 Jalan Tun Perak,50050 Kuala Lumpur, MalaysiaTel: 603-2074 8391Fax: 603-2711 3417Email: cmteh@maybank.com.myEmail: wealth@maybank.com.my M
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2009 Best private banking services overall in Malaysia
2010 Best private banking services overall in Malaysia
Maybank have been awarded by Euromoney
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