independent asset managers & multi-family offices … asset managers & multi-family offices...

May 2016 • citywireasia.com

independent asset Managers & Multi-faMily offices in asia

I n d e p e n d e n t a s s e t m a n a g e r s a n d m u lt I - f a m I ly o f f I c e s I n a s I a

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a new breed of managers is emerging in the asian

private wealth industry. across singapore and hong kong,

independent asset managers (iaMs) and multi-family

offices (MFOs) have been established to provide independent

advice for private clients.

to learn about their value propositions, Citywire interviewed

key representatives from 10 IAMs and MFOs. We spoke to them

about a range of topics, including their offerings, investment

teams and partnerships with custodians. We also quizzed them

on the challenges they face, and how they plan to overcome

them.

In this supplement, we’ll first hear from the founders of the

association of independent asset Managers (singapore) and

association of independent asset Managers (hong kong) on

their journeys as independent asset managers. We’ll then drill

down into the profiles of the featured IAMs and MFOs.

We hope this supplement provides a valuable insight into

the roles of IAMs and MFOs in Asia, and what lies ahead for

the industry. •

3By anthonia Hui, ceo of aL wealth partners and president

of aiam singapore

S I N G A P O R E f O R E w O R d

5By Jessica cutrera papadopoulos, md of eXs capital asia

and founding committee member of aiam Hong Kong

H O N G K O N G f O R E w O R d

7Key numbers of the asset managers featured

d A t A b R E A K d O w N

9Leading independent asset managers and multi-family

offices answer questions on their business

S I N G A P O R E P R O f I l E S

30Leading independent asset managers and multi-family

offices answer questions on their business

H O N G K O N G P R O f I l E S

I n d e p e n d e n t a s s e t m a n a g e r s a n d m u lt I - f a m I ly o f f I c e s I n a s I a • f o r e w o r d

navigating singapore’s changing financial landscape

My decision in 2007 to leave the bank and set up my own

external asset management firm came after almost four

years of planning and deliberation.

the fundamental reason to leave was not money, but rather my

desire to escape increasing reporting lines and internal politics.

Most importantly, my conscience told me ever-increasing revenue

and auM targets were preventing me from doing the right thing

for my clients.

after more than three decades in banking, leaving the protection

of a big organisation meant giving up the security of a stable

income, and opening myself up to scrutiny by clients and

regulators. however, the freedom and chance to become

a real fiduciary to clients far outweighed the downside.

Nine years later, i look back on the journey that was and

continues to be extremely fulfilling, giving me the best job

satisfaction i could ask for. it wasn’t always smooth sailing,

but it was definitely the right choice.

Post-2008 the wealth management landscape has featured •••

antHonia Hui

ceo of aL wealth partners

President of AIAM Singapore

Ever-increasing revenue and AUM targets were preventing me from doing the right thing for my clients.

anthonIa huI

AIAM SIngAPore



stricter compliance scrutiny. Many bankers have come to me

asking for advice about taking the same path i have walked.

Bankers who aspire to start their own external asset

management firms need to honestly assess their ability to achieve

this with their existing client base. if not, they should consider

joining an existing group that shares their values in managing

client assets.

in this age of ever-increasing regulations, a banker looking to

start on their own firm must have a sustainable business model.

it is my fundamental belief that a transaction revenue model is

not sustainable in the long run, as it is too similar to the existing

private banks and brokerage firms.

instead, you must be able to charge a fee for advice. to do this,

clients must be able to see the value of the advisory fee, and you

must be able to give a compelling answer to this question: ‘Why

should i pay you management fee when my existing bank doesn’t

charge one?’

once a banker has made this big decision to take the next step

of their career, the association of independent asset Managers of

Singapore (AIAM) can help. We are here to exchange experiences

and best practices. Members can leverage the support the

AIAM offers to navigate the complex and fast-moving regulatory

environment facing the wealth management industry. •

It is my fundamental belief that a transaction revenue model is not sustainable in the long run.

anthonIa huI

AIAM SIngAPore


I n d e p e n d e n t a s s e t m a n a g e r s a n d m u lt I - f a m I ly o f f I c e s I n a s I a • f o r e w o r d

Hong Kong’s new voice in independent asset management

i moved to asia in January of 2003 to join a tokyo-based

firm that was interested in expanding its expatriate practice

to include US citizens. Coming from a fee-based brokerage

and financial planning background, the product distribution focus

of asia was a very eye-opening experience.

After several years at a firm where my practice was an anomaly

in the overall business, i ultimately left and set up my own

asset management firm in Hong Kong in partnership with a fund

manager who had become a client and shared my passion for

client service, alignment of interests and transparency.

From 2008 to the present, here at EXS Capital, we have built

a client-focused independent asset management practice with

a fully disclosed compensation structure.

after years of seeing a misalignment of interests, hidden

fees and commissions and poor client outcomes as a result

of a sales-driven advice model, i was excited to launch one

of the first firms in Asia focused on delivering high-quality,

independent advice.

seven years later, we remain excited about the opportunity •••

Jessica cutrera

managing director of eXs

capital asia

founding committee member

of AIAM Hong Kong

Coming from a fee-based brokerageand financial planning background, the product distribution focus of Asia was a very eye-opening experience.

jessIca cutrera

AIAM Hong Kong



in this space and by the growth of the independent asset

management industry. Across Asia Pacific there are now many

firms that offer independent advice, asset management and

financial planning services.

While independent asset management makes up a very small

part of the industry currently, we expect this to grow dramatically,

as it has in other markets.

The business needs of these organisations are different from

those of a private bank, IFA or traditional asset manager. Those

needs, and the lack of a professional body to support such

organisations, led to us and two like-minded firms to form the

hong kong association of independent asset Managers (aiaM).

We are a non-profit organisation run by a group of passionate

independent asset managers in Hong Kong. We felt that the time

was right to create a structured voice for all those who share the

goal of offering high-quality and unbiased financial advice to

their clients.

Beyond being the voice that can be heard, the association aims

also to provide a forum in which all members can discuss the

various issues related to this nascent segment. By doing this we

put into practice the concept of sourcing best-of-breed solutions,

not only for our clients, but also for our members. •

Seven years later, we remain excited about the opportunity in this space and by the growth of the independent asset management industry.

jessIca cutrera

AIAM Hong Kong


I n d e p e n d e n t a s s e t m a n a g e r s a n d m u lt I - f a m I ly o f f I c e s I n a s I a • d A t A b r e A K d o w n

profiles of featured independent asset Managers and Multi-faMily offices

on average, featured Iams/mfos have eight members in their investment teams. the largest investment team comprises 14 members.

7years In

operatIon

Featured IAMs/MFOs are leaning towards discretionary services.

sIze of Investment

team

15%advisory

discretionary

85%

the oldest Iam/mfo

was set up in 2005.

Three of the 10 featured IAMs/MFOs offer only discretionary services.



generally, featured Iams/mfos have a good working relationship with existing partners. most Iams/mfos agree that the service provided by custodians have improved, with most providing ample support through dedicated desks. When quizzed on how custodians can help, this is what some of the Iams/mfos had to say:

hoW custodIans can help Iams/mfos

‘Better IT platforms.’

‘More systematic trading and compliance systems.’

‘Dedicated access to product specialists.’

‘Improved data and reporting aggregation.’

‘Better understanding of the fundamental dynamics of IAMs.’

senior client partner, credit suisse

Head of investments, efg Bank

senior advisor, Macquarie Bank

managing director, credit agricole (now indosuez wealth management)

head of asia pacific private banking, clariden leu

private client manager, HsBc private Bank

director, financialintermediaries, uBs

Bft financial group, investment adviser

deputy ceo, Bnp paribas private Bank

Head of china, aBn amro

Key challenge

educating cl ients

30%

participants were divided on the biggest challenge they face. most cited escalating regulations as the biggest hurdle in the business, but others found it most difficult to recruit qualified relationship managers and convince clients of the value of independent advice.

30%regulat ions

recruit ing relat ionship managers

40%

‘The regulatory environment has significantly changed over the past years and will continue to increase costs and complexity.’

Former roles oF key

representatives


singapore

what roles have you held prior to your current

firm? senior client partner, Credit suisse ag.

When was your company founded?

april 2007.

What’s the split between advisory and

discretionary assets?

advisory 25%, discretionary 75%.

What services does your firm provide?

asset management services.

how big is your investment team and how

are roles divided?

seven, led by leonardo Drago who is the

co-founder and Cio.

how can iaMs strike a balance between

offering in-house strategies and providing

independent advice?

unlike traditional fund managers who have

a single investment strategy structured into their

own branded fund and marketed to investors

through various distribution platforms, iaMs tend

to manage individual high-net-worth portfolios,

each having its own specific investment strategy

tailored to the client’s requirements.

usually, investment structuring is done

only after they have identified the client’s

requirements, after which they utilise the

platform of custodian banks or product specialist

providers to identify the available investment

vehicles and access to construct a solution.

it is therefore not branded as an in-house

product but rather an investment solution

tailored to the client’s needs.

Most iaMs operate under the fee-paying model

and do not rely on transaction volume •••

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to generate commission revenue, which is

typically what private banks and brokerage

houses do. this helps to ensure stable annual

revenue to the iaMs, reducing the incentive

for them to push products and transactions.

in which areas have custodian banks met your

expectations? What can they do to help your

business moving forward?

iaMs and custodian banks must work seamlessly

together to ensure accuracy, transparency,

low costs, responsive best execution, timely

reporting and last but not least no settlement

or operational errors.

in recent years, the enhanced due diligence

requirements practised by the banks and

custodian platforms has added a lot of

complexity.

often custodians must interpret how to

implement regulations, leading many to adopt

too extreme a stance and leading clients to feel

they have to prove their legitimacy.

Custodian banks should unite to provide

feedback to the regulators, presenting

a common approach on how to interpret

regulations to reduce the variance among them.

of the three main challenges faced by iams

– recruiting rms, educating asian clients and

keeping up with regulatory changes – which

do you think is the toughest and how do you

plan to overcome this?

this depends on which iaM/eaMs you are

addressing the question to. Some may find all

three are equally challenging, but not all IAM/

eaMs are the same. in general, for those •••



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who set up as iaM/eaMs, they

find the regulatory changes

are currently the toughest

to navigate followed by

educating asian clients

to pay a fee.

though recruiting rMs is

not smooth sailing, there are

qualified professionals looking

for career change and with

iaM/eaMs being increasingly

recognised in the market,

more of them will be attracted

to join the field.

do you expect to outsource

more functions as your

organisation grows? What

With IAM/EAMs being increasingly recognised in the market, more RMs will be attracted to join the field.

anthonIa huI

AIAM SIngAPore

are these functions and why?

outsourcing is not necessarily

a viable option in all aspects

of the business, especially

when it comes to

compliance and it control

tasks. additionally, current

regulations mean the founder

or key executive of the

business must have full control

of these activities and make

them directly accountable

for any mishaps.

Therefore, most firms

outsource some of the

work but bridge the gap with

in-house staff. However, •••



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the rapid development of FinTech and

robo-advice means some iaM/eaMs who

have a more standardised approach may find

it possible to outsource some of their portfolio

management functions.

What advice would you offer an individual

who is keen to set up as an iaM?

analyse why you want to take this route, what

you wish to achieve out of this, when you will be

ready, who your target clients and staff team are,

and how you wish to structure your business.

second, consider the physical implementation

– you cannot delegate and you have to begin

with micro managing until your foundation is

solid. Don’t forget the regulator will hold you

as the director/principal accountable for

anything that happens to your company.

unlike being an employee of a bank, there is no

one to take the fall for you even if the mistake

was made by your employee.

third, do you have the heart to act for the

benefit of your clients or are you only doing

this for money? if you want to take home no less

than you did at the bank you are bound to be

disappointed, unless your business fee income

is more than sufficient to cover your salary and

your staff cost. As any entrepreneur, you must

be prepared to sacrifice and prioritise your

expectations. No pain, no gain. •



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what roles have you held prior to your

current firm?

i have had over 26 years of experience in the

private banking, wealth management and asset

management space. My previous roles include:

senior adviser - Macquarie Bank Limited (Asia);

CEO, Religare Macquarie Private Wealth, India;

and managing director – Macquarie Group

(various).


2005.





We are an independent private wealth

management company offering exclusive

discretionary management, financial advisory

and family office services and solutions. Our

business proposition is predicated on providing

independent, fee-based investment portfolio

and advisory solutions for our clients.

owing to the long-term nature of our client

relationships, our value add extends to other

services that we help facilitate through selected

third parties. these vary but broadly cover legal,

tax, estates, insurance, other advisory services

such as art and collectibles, corporate finance,

real estate, and concierge.

how big is your investment team and how are

roles divided?

our investment committee comprises eight

members including the Ceo and the Cio.

how can iaMs strike a balance between •••

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independent advice?

having in-house strategies does not preclude

an iaM from providing independent advice. the

perceived independence, or the independence

itself, is compromised the moment multiple

layers of fees are introduced and/or there is

a relative lack of transparency with respect

to the fees being charged.

Most iaMs charge fees at the portfolio level

and not at an internal fund or investment

strategy level. if there were a fee at these levels

for whatever reason, they would be disclosed.

So in a sense, the balance between offering

in-house strategies and providing independent

advice becomes academic so long as there

is complete transparency.

there are a number of iaMs, like Crossinvest,

that have made a strategic decision to not

have any in-house products. For us, remaining

independent in the truest sense of the word

is one of our critical success factors.




iaMs are now considered a premium alternative

to the larger private wealth firms. As a result,

we have seen an increased focus from custody

banks with many large banks establishing, or

in the process of establishing, iaM desks to

service the industry. this has made it easier for

IAMs to quickly establish business relationships

with their choice of custodian bank.

the overall support, service and solutions •••


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offered by the custodian banks could be further

enhanced through the custodian banks forming

a better understanding of the fundamental

dynamics of the iaM business proposition.






all three present challenges at multiple levels.

however, it is important to note that these are

challenges not only faced by the iaMs, but the

entire industry. While these challenges are real,

they have served as the catalyst for the success

of the iaM industry.

With respect to each of the challenges:

• The regulatory environment is a reality and

a necessity in my view as we enter a more

digitised world.

• Clients have evolved over the years and are

a lot more educated than we give them credit

for. the industry, however, has not been able

to match this enhanced client education with

that of the rM’s dealing with them.

• Recruiting an adviser with the right talent and

skills remains the key challenge. the change

in the way investors invest has meant that

there is now a need for more advisers,

and less sales-oriented rMs.

these advisers are few and far between,

but they exist. the challenge arises as a result

of the fact that this adviser pool is small and

demand is high. the only way to overcome this

challenge is to recruit only when there is a •••


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clear strategic and cultural match between what

we believe in and that of the person we hire.

do you expect to outsource more functions

as your organisation grows? What are these

functions and why?

over the past 10 years we have developed

our own in-house systems, infrastructure

and processes. We have control over all the

critical functions within the business. We have,

however, outsourced certain non-critical support

functions. at this stage, we are more likely to

build and enhance our existing functions than

to look at outsourcing.

What advice would you offer an individual who

is keen to set up as an iaM?

unless you have the right mix of capital for

increased investment as well as regulatory

capital for balance sheet strength, patience,

high perseverance, strong business acumen

and clients who are willing to wait and provide

leeway until the business has established the

critical functions, my advice would be not to set

up as an iaM.

My advice would be to rather join an

existing iaM that has its own tried and tested

infrastructure, that has a strong foundation and

pedigree, and which provides you the platform

to do what you do best. Most importantly,

find one whose strategy and business culture

resembles your own. •


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current firm?

i have spent 20 years in the private banking

industry in hong kong, london, Paris and

singapore. Before co-founding eightstone,

i was managing director at Credit agricole

Private Bank (now Indosuez Wealth

Management), in charge of international

HNW clients.


2015.



Discretionary 100%.


Founded by experienced bankers and

entrepreneurs, we are a 360-degree financial

and wealth management firm. EightStone is

neither a bank nor a family office. Instead, we

bring together the best of both worlds: the high

service standards and transparency expected

of a private family office, combined with the

quality of investment expertise and operational

excellence typically associated with a major

global financial institution.


are roles divided?

our investment committee is headed by olivier

Destandau, partner and head of investments.

olivier brings over 20 years of investment

banking experience, deep knowledge across

asset classes and an excellent global network.

he worked for Deutsche Bank and royal Bank

of scotland in london and singapore. our •••

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investment decisions follow an

all-weather strategy, a model

we have built that aims to

produce long-term, stable and

positive returns for our clients.

how can iaMs strike a

balance between offering

in-house strategies and

providing independent

advice?

there should not be any

attempt to challenge

or reduce the independent

status of the company. By

the nature of the setup, iaMs

benefit from wide market

access and they should

There should not be any attempt to challenge or reduce the independent status of the company.

cyrIl malapert

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enjoy it fully. in recent years,

iaMs have become more

sophisticated and are able to

deliver high-quality in-house

strategies to their client base.

When doing so, there should

always be an associated

check confirming the strategy

is in the client’s best interest.

in which areas have

custodian banks met

your expectations? What can

they do to help your business

moving forward?

First of all, working with more

than one custodian offers the

advantage of choice for •••


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our clients and more flexibility in some of the

services we can provide, but it also adds a

significant extra layer of complexity to our

back-office work, and also to the front office.

Processes and data systems have to be

retooled and our client services team and

advisers must learn multiple platforms. this

extra work should not be underestimated.

As a consequence, Eightstone has deliberately

chosen to only work with a handful of custodian

banks. our banking partners were carefully

selected on reputation, solidity, price structure,

reporting and quality of execution. In that

sense, our custodian banks have fully met our

expectations.

The IAM industry will surely benefit from better

inter-bank compatibility in terms of data and

reporting aggregation.






We believe rising awareness of the concept

of truly independent advice among asian clients

is a crucial pre-requisite for the IAM industry

to grow. as of today, many asian clients are

still accustomed to working with private banks,

and may not be aware of the value of working

with an independent asset manager. We foresee

growing demand for boutique firms from

traditional clients that will make easier for

the iaMs industry to recruit rMs.

The regulatory environment has significantly •••



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changed over the past few

years and will continue to

increase costs and complexity.

We tend to believe that it will

ultimately increase confidence

from clients.



organisation grows?

what are these functions

and why?

We do not expect to

outsource more functions.

as our business grows,

eightstone’s intention will

even be to on-board functions

such as human resources

Being your own boss requires risk-taking, vision, reliable strategic partners, financial acumen and a strong client base.

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or a finance department.

What advice would you offer

an individual who is keen

to set up as an iaM?

setting up an iaM is above

all synonymous with becoming

an entrepreneur. Being your

own boss requires risk-taking,

vision, reliable strategic

partners, financial acumen

and a strong client base.

if you are able to withstand

the additional rigours and

stress that comes with

starting and owning a

business, please come

and join the club. •


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current firm?

My previous roles include head of Asia Pacific

for Clariden leu (2004-2009), head of asia

Pacific ABN AMRO Private Banking (1999-2004),

and head of south east asia Credit suisse

Private Banking (till 1999).


2009.





Discretionary investment management, advisory,

family office services.


are roles divided?

Chief investment officer, plus two portfolio

managers, supported by a risk analyst.



independent advice?

We have two in-house strategies but did not

develop them to be sold as products per se.

We use them so that we can replicate our

best ideas in the relevant spaces in the most

cost-efficient way. It is operationally far easier

to run a strategy through such a structure,

rather than executing every transaction in every

client’s account.

to make matters more complex, these

accounts are held with different custodian

banks. this way we ensure that all client

portfolios are treated the same way: •••

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there is no difference in execution price, and

the risk of losses due to operational mistakes

is substantially reduced.

the two structures are also entirely

transparent: clients can see through the

strategies on a daily basis. For our fee

calculations we reduce the amount of the auM

by the amounts invested into our two in-house

strategies. that is in line with our philosophy

that no investment decision should be driven

by revenue considerations. We believe that this

is the most honest way of managing money.




in general we have a good relationship with our

custodians. they usually understand our needs

and the business model. however, banks are

increasingly difficult to work with as they come

up with new documentary requirements on an

almost daily basis. it would be nice if a certain

level of common sense would return.






Definitely recruiting RMs. To educate clients

is not really difficult. In fact, I would argue that

the growth of the iaM industry will be driven

by clients who look for truly independent advice.

regulation is something we all have to deal

with – it’s affecting everyone the same way.

do you expect to outsource more functions •••

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as your organisation grows?

what are these functions

and why?

Unlikely. We believe that

we already ‘outsource’ the

functions of custody and

execution to our custodian

banks. Furthermore, we

outsource internal audit.

the only other outsourcing

i can see at the moment

is accounting, but for a firm

of our size it’s fairly easy

to handle that internally.


an individual who is keen

to set up as an iaM?

go for it! if you have enough

traction with enough clients

then you are good to go.

however, don’t underestimate

the logistical challenges.

as such, it may be wise to

also explore joining an

established iaM, so that you

can get going immediately. •

The only other outsourcing I can see at the moment is accounting.

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current firm?

i was head of China at aBN aMro Private Bank

(Hong Kong) where I led the bank’s efforts

to expand its Chinese business, as part of

its strategic build-out of wealth management

capabilities across the aPaC region.


thirdrock was founded in 2010 as a fully

integrated investment management group.





since thirdrock was established in 2010, we

have expanded our investment capabilities

considerably. apart from private wealth

management, our services now include

corporate advisory and also funds management.

another key pillar of our business in financial

technology, particularly in the iaM space.


are roles divided?

2015 was a year of active hiring. We’ve grown

our investment team to 14, comprising client

advisers and portfolio managers. We expect

another three client advisers to join us by

mid-2016.



independent advice?

as an independent adviser, thirdrock has

built its business on a foundation of strong

relationships with our clients so we fully •••

J A S O N l A I

f O u N d E R

& C E O

t h i r d r o C k

Q&a singaporewitH tHirdrocK



understand their needs. and in choosing the

right investments for our clients, we impose

the same exacting client-product suitability

standards on our in-house strategies as we

do on other investment solutions.

What we have done is segregate distinctly our

wealth management business from our in-house

strategies, prioritising the holistic management

of our client’s overall wealth and imposing

only a single layer of fees. this way, there’s

no unjustified inclination towards in-house

strategies.




to better serve our clients, support from

a custodian bank that fully understands our

needs and has the capability to meet these

demands is crucial. to their credit, private banks

have been swift to set up dedicated desks to

service iaMs.

how well a custodian fares, in my view,

depends on various elements: its digital tools

and platform; quality of sales and execution

support, product range and innovation; and

flexibility in pricing models.

one area where custodians can make

a big impact is investing in state-of-the-art it

platforms. improved execution services such

as stP, transparent pricing and ease

of retrocession calculation are also areas

to consider. Custodians can also go beyond

standard custody services to offer IAMs

dedicated access to product specialists •••

J A S O N l A I

f O u N d E R

& C E O

t h i r d r o C k




or even advisory know-how in

areas of legal and compliance.

of the three main challenges

faced by iams – recruiting

rms, educating asian

clients and keeping up with

regulatory changes – which

do you think is the toughest

and how do you plan to

overcome this?

For the IAM industry to

develop more quickly and

sustainably in the long run,

there needs to be better

awareness and understanding

among clients of the iaM

model. as the iaM concept is

still fairly new in asia, many

UHNW and HNW clients may

not even be aware of the

existence of the independent

industry as an alternative.

While the media will play

a significant role in the

education process, regulators

and the industry need to stage

a concerted effort in investor

education. an industry

association such as the aiaM

in singapore could take the

lead in raising awareness.

the education process

also needs to extend to the

financial industry, explaining •••

J A S O N l A I

f O u N d E R

& C E O

t h i r d r o C k

One area where custodians can make a big impact is investing in state-of-the-art IT platforms.

jason laI

tHIrdroCK




the opportunities related to the iaM industry.

Banks can be more proactive in engaging their

relationship managers and clients about the role

of iaMs in the wealth management space.



functions and why?

As our firm expands, we hope to reduce our

reliance on service providers, so we can have

better control over our processes, and also

better manage client confidentiality. While

smaller iaMs may have little option but to

outsource various functions due to a lack of

scale, we made the decision earlier to keep

as many functions in-house as possible.

it is also why we chose to invest substantially

in an end-to-end technological platform that

centralises risk management, reporting and

analysis and automates associated daily tasks.



Be aware of the rising costs of regulatory

compliance and the challenges that complexity

of operations management might bring, be

it putting in place a robust risk management

framework or infrastructure, or ensuring

processes are executed correctly.

But more importantly, to truly unlock the

value of the iaM model, you need to have

sufficient scale and a certain level AUM.

the ability to give clients holistic investment

advice rests on the firm’s capability to

provide a consolidated overview of their

portfolio and statements, which requires •••

J A S O N l A I

f O u N d E R

& C E O

t h i r d r o C k




intensive investment in technology, which many

of the smaller iaMs are unable to do. this is also

why practitioners expect consolidation among

iaMs as the model evolves.

that said, experienced private bankers who

wish to become independent wealth managers

also have the option of joining an established

platform such as thirdrock. this way, they

benefit from an integrated and experience

business administration team to perform

the necessary compliance operations and

administrative tasks, and can also leverage

our advanced proprietary it system and

preferential terms with top-tier banks to

build their business. •

J A S O N l A I

f O u N d E R

& C E O

t h i r d r o C k




what roles have you held prior to your current

firm?

I was head of Investments Asia at EFG Bank.


2014.



Discretionary 100%.


Discretionary managed global accounts for

UHNWI.

how big is your investment team and how are

roles divided?

The investment team is four members of staff,

of whom three are portfolio managers and

one is an investment mid-office person.



independent advice?

Most iaMs will focus on independent advice

and use input and investment strategies from

different investment providers to build a proper

investment portfolio for their clients. the key

word is ‘independence’ as an IAM is really

on the client side.

Private banks still have a tendency to promote

in-house products or investment products on

which they are making higher fees. this will

change in the coming years, as we believe

asian regulators will place more and more

emphasis on fee transparency, similar to the

trends we have seen in the us and europe.

this will be a positive development for the

iaM industry. •••

H A R M E N

O v E R d I J K

M A N A G I N G

P A R t N E R

C a i d a o

W e a lt h

Q&a Hong KongwitH caidao weaLtH



in which areas have

custodian banks met your

expectations? What can they

do to help your business

moving forward?

some banks see iaMs as

competitors, while other

banks see iaMs as an auM

acquisition channel without

some of the liabilities.

these banks are also much

more focused on providing

services to iaMs that help us

conduct our business, such

as efficient 24-hour execution

and automated data feeds

for client reporting. We like

to work with banks that are

focused on the iaM business.

of the three main challenges

faced by iams – recruiting

rms, educating asian

clients and keeping up with

regulatory changes – which

do you think is the toughest

and how do you plan to

overcome this?

regulatory changes apply

to the whole industry, so

it doesn’t matter if you are

a large private bank or a small

iaM, you have to comply

with the same regulations.

that might be challenging •••


H A R M E N

O v E R d I J K

M A N A G I N G

P A R t N E R

C a i d a o

W e a lt h

Regulatory changes apply to the whole industry, so it doesn’t matter if you are a large private bank or a small IAM.

harmen overdIjK

CAIdAo weAltH



sometimes, but that is not specific to IAMs.

educating asian clients about the added value

of independent advice is a process that will

continue over time.

the biggest challenge is probably recruiting

RMs to your business for two reasons: first Asian

rMs are very highly paid compared with their

us and european counterparts.

second, not many understand the concept

of what an IAM can offer them and their clients.

With this second part in mind, we recently

launched an association of independent asset

Managers in hong kong. this body aims to

define and promote what the industry stands for

and help our members to overcome the hurdles

mentioned above. it will create a platform can

share, for example, regulatory knowledge, and

also help promote the advantages of the

iaM model for both clients and bankers looking

for a change in work culture.



functions and why?

as an organisation grows you typically

in-source more services as you want to be

in control of the quality of your services. The

beauty of today’s world is that it is possible to

outsource many services to very high-quality

service providers, which means you can

start a small firm and quickly be able to

offer professional services to clients.



First of all, you need to know what your •••


H A R M E N

O v E R d I J K

M A N A G I N G

P A R t N E R

C a i d a o

W e a lt h



business focus is going

to be. As a smaller firm you

cannot offer the same breath

of services that you could at

your private bank. however,

you can offer a service that

typically gives you a much

deeper relationship with

your clients.

When setting up your own

firm you need to realise you

must run a business, not just

a client book. to manage

your own firm you need to

dedicate time and resources

to many different aspects,

such as legal and compliance,

it systems and hr. that also

means you need to make

sure you reach a certain scale

to make sure you can afford

to maintain a proper business

infrastructure. •


H A R M E N

O v E R d I J K

M A N A G I N G

P A R t N E R

C a i d a o

W e a lt h

When setting up your own firm you need to realise you must run a business, not just a client book.

harmen overdIjK

CAIdAo weAltH



current firm?

Prior to my role in asia, i worked for Charles

schwab. i am still licensed in the us today

as an independent adviser affiliated with a

US broker-dealer and US financial planning

firm and insurance agency, and through these

affiliations, serve clients in the US and across

Asia Pacific.

in addition to my work in asia, while in tokyo

i completed my MBa at the temple university

Japan campus, graduating in 2006. Previously,

i graduated from indiana university with

honours, completing two undergraduate

degrees in three years. i also spent a year in

ameriCorps, the domestic Peace Corps, working

with individuals with severe disabilities.


2007.

What’s the split between advisory

and discretionary assets?



EXS Capital Group is an independent

investment firm dedicated to Asia Pacific.

Owned entirely by its partners, the firm has

offices in Hong Kong and is active throughout

the region.

EXS Capital is engaged in two separate

businesses: alternative investments and

wealth management.


are roles divided?

We have four in the private equity team, •••

J E S S I C A C u t R E R A

P A PA d O P O u l O S

PA R t N E R ,

M A N A G I N G

d I R E C t O R

A N d H E A d O f

O P E R A t I O N S A N d

C O M P l I A N C E

e X s C a p i t a l

Q&a Hong KongwitH eXs capitaL



seven in wealth management, and two in

client services.



independent advice?

We don’t see these as conflicting items.

independent advice, where the adviser is

paid only by the client, not by commissions,

retrocessions or kickbacks, is the only way

to provide truly unconflicted advice in the best

interest of the client. that independent advice

is tailored to the needs of each client.




We’ve largely been disappointed with custodian

banks. Fees are high, trading inefficient, service

poor and all very manual. trading through

custodian banks is manual and their technology

offering very poor.The brokerage firms deliver

a better product at a lower cost.

We would like to see all of the Asian based

platforms we use develop the technology, tools

and service level similar to that found in the

us or australia. our custodians can best help

grow our business by offering ways to make

our trading and compliance more systematic

and streamlined.




do you think is the toughest and how do

you plan to overcome this?

We believe keeping up with regulatory •••

J E S S I C A C u t R E R A


PA R t N E R ,

M A N A G I N G

d I R E C t O R

A N d H E A d O f


C O M P l I A N C E

e X s C a p i t a l




challenges is a big hurdle for small firms.

We partnered with two other IAMs to set up

the aiaM in hong kong late last year. a key goal

of this professional membership organisation

is to help small firms pool their resources

and manage regulatory changes efficiently

and effectively.



functions and why?

We are open to outsourcing as a solution for

various aspects of our business but have no

immediate plans. We are currently using some

back office staff support based in the Philippines

to effectively handle some of our admin.



Plan carefully and seek support from peers and

professional service firms to ensure everything

is set up correctly at the outset, so that you can

begin operations as soon as possible. Devote

the time and resources to staying current on

all of the various professional and regulatory

issues facing the industry and have a plan

for ongoing review. keep very good records

from day one, and set up systems to prevent

business lapses in important areas. •J E S S I C A C u t R E R A


PA R t N E R ,

M A N A G I N G

d I R E C t O R

A N d H E A d O f


C O M P l I A N C E

e X s C a p i t a l




current firm?

Prior to my current role, i served as deputy

Ceo at BNP Paribas Private Bank, regional

head private banking North asia at aBN aMro,

and executive director at Bank sarasin.


london and Capital asia was founded in 1986

in london, and 2010 in hong kong.





established in 2010 in hong kong our primary

focus is to service the full spectrum of needs

related to families’ financial assets. This entails

serving families’ private wealth management

needs as well as the financial and corporate

advisory needs generated from their family

businesses. A ‘one-stop solution’, we position

ourselves as their private investment office

within a regulated multi-family office structure.


are roles divided?

our group investment team comprises

12 people. under the leadership of our Cio,

the investment team is split by asset class.



independent advice?

Our offering is based on a ‘can do attitude’

combined with being a lot of things to a limited

number of clients. this stems from a mind set

of making the time to listen and understand •••

38


issues while at the same time

having the knowledge and

experience to be able to

deal with these issues.

given that the issues faced

by clients are wide in nature

and require a broad set of

competencies to meet them,

it is important for trusted

advisers to keep their

minds open as to finding an

appropriate solution in each

case. Whether this comes from

an internal pool of knowledge

or from external providers and

partners, the key is to remove

ego from the equation in

finding the right solution

for the client. As such finding

the best of breed solution for

the client will always come first

before egoistically placing any

in-house strategy.

in which areas have




moving forward?

Custodian banks are a major

service provider for safe

custody of our clients’ assets,

which is of prime importance.

Some banks also offer good

execution services and •••

P H I l I P P E

l E G R A N d

C E O

l o n d o n a n d

C a p i t a l a s i a

Q&a Hong KongwitH London and capitaL


It is important for trusted advisers to keep their minds open as to finding an appropriate solution in each case.

phIlIppe legrand

london And

CAPItAl ASIA


most have positioned themselves in one area

or another in regards to the quality of their

offering. As an independent entity, we can take

an overall view and choose the various parts

that each bank excels at, but most importantly

we seek a similar can-do attitude from them.




do you think is the toughest and how do

you plan to overcome this?

Concept awareness is our biggest challenge.

When London and Capital Asia was founded

in 2010, it was one of very few alternative

solutions to setting up your own family office.

Indeed, the few multi-family offices that existed

then were owned by its families and not owned

by a management team emanating from the

banking world that independently serviced the

families. six years later, although the number of

players is growing along with awareness of such

alternatives, the concept of independent wealth

management and multi-family office remains

relatively new to asia.

although we believe that this represents an

interesting option for families looking for service

beyond brand, we are also cognisant of the

fact that we remain a pioneer in the field and

as such, all eyes are on us to continue setting

a high benchmark for all those that follow.

as a pioneer we have spent a large amount

of effort in promoting the concept in the press

and at numerous Industry events. We have

since seen an increase in the knowledge •••

P H I l I P P E

l E G R A N d

C E O

l o n d o n a n d





awareness of our concept as an alternative

option within the wealth management industry.

From a handful of banks willing to offer

their platform to us, we now have all major

international and local institutions offering

their services and in the past year alone we

have also seen more bankers venture into

the entrepreneurial world by either joining

existing boutiques or setting up their own.


as your organisation grows? What are

these functions and why?

Not more than we presently do. at present

it being the only function we outsource.



Be true to yourself and assess the clients

that are with you because of the logo of your

business card and those that are because

of your relationship with them.

Don’t set up your own only for your ego.

Join an existing one if your aim is to better

service your clients’ needs, but make sure

you join a team that share the same mind-set

as you and with whom you feel chemistry.

always have a can-do attitude, be patient,

and prepare to work hard, but more importantly

work smart! •P H I l I P P E

l E G R A N d

C E O

l o n d o n a n d




M a y 2 0 1 6 42



current firm?

various roles at hsBC including corporate

financial planning adviser and latterly HNW

private client manager before leaving in

2014 to join strabens hall.


2007.





Strategic financial planning and asset

management.


are roles divided?

We have five internal investment team members

and 12 outsourced.



independent advice?

at strabens hall, we feel that the best way

to serve our clients is to operate on a totally

independent basis. We do this by creating an

overall investment structure tailored to the

client’s return and risk objectives and then

allocate the capital to a blend of external

discretionary fund managers.

We deliberately allow the managers to operate

within broad risk guidelines so to allow the

managers to take active decisions at portfolio

level with the overall risk being controlled

at the core account level. By diversifying

through several managers and specialist •••

d A v I d b E N S K I N

d I R E C t O R

s t r a b e n s h a l l

Q&a Hong KongwitH straBens HaLL



funds this introduces new ideas and reduces

the concentration risk.

We then monitor the managers that have

been appointed to ensure that their views are

reflected within their asset allocation decisions.

underperforming managers will go through a

defined review process before the final decision

is taken to terminate or redeem and reallocate.

By not operating an in-house strategy, we feel

that we are far better placed to independently

assess which investment professionals are best

placed to deliver results. We see little value

in employing top-class investment managers,

paying their fees and the overriding their

decisions centrally.




the custodian banks that we work with have

been excellent in taking the time to understand

our business and in particular developing their

pricing so that we are able to work on a no

retrocession basis. the service has also been

excellent in allowing us to be able to deliver

what we need to our clients.

Moving forwards we see technology as an

important opportunity and in particular allowing

data to flow more freely from the custodian

banks to our back office CRM software to help

facilitate consolidated reporting where clients

hold multiple custodian banking relationships.

of the three main challenges faced by iams –

recruiting rms, educating asian clients

and keeping up with regulatory changes – •••


d I R E C t O R





which do you think is the

toughest and how do you


Recruiting high-quality RMs

is always a key challenge

as it typically means that the

individual will be leaving what

is perceived as a more secure

environment of working for

a private bank to joining the

independent advice world.

An RM will effectively go from

being employed by a private

bank to being employed

by their clients.

this means taking on a

different role for a client where

you are now responsible

for advising a client on how

they engage with the wider

financial markets rather than

how they engage with just one

institution. Much of the value

that can be added to the client

relationship is by coordinating

a team of other professional

advisers, banks and other

financial institutions, while

maintaining a high-level view

of what the client is looking

to achieve.



organisation grows? •••


d I R E C t O R




An RM will effectively go from being employed by a private bank to being employed by their clients.

davId benskIn

StrAbenS HAll


What are these functions and why?

at present we are very happy with the balance

of work that is outsourced. one challenge we

face is being able to recruit chartered financial

planners in asia, when in london there are

many more qualified and experienced financial

planners. As our Asia office grows we will look

to further utilise our London office’s resource

in this area and their ability to more easily

recruit into the financial planning team.



initially, having a clear proposition and being

able to define and articulate how you are going

to add value to your clients is key. utilising

technology allowing you to streamline your

internal processes to maximise your time spent

understanding and working with your clients

also presents a significant opportunity.

spending time and building relationships in

the wider advisory community is also very

important. after leaving hsBC, i was delighted

to find out how many other independent asset

managers were operating in asia and how

open they are to sharing ideas of best practice

and supporting other businesses. the recently

formed association of independent asset

Managers (aiaM) has also been very positive

step in formalising an environment in bringing

members together to exchange ideas of

best practice. •


d I R E C t O R




46


c i t y w i r e a s i a . c o m M a y 2 0 1 6

what roles have you held

prior to your current firm?

Before joining swiss-asia

in March 2015, i was in

charge of managing client

relationships at uBs ag’s

Financial Intermediaries Desks

in singapore, vienna and

Frankfurt since 2002.

When was your company

founded?

Swiss-Asia’s Hong Kong office

opened in 2010, we opened

in singapore in 2004.

What’s the split between

advisory and discretionary

assets?

Discretionary 100%.

What services does your firm

provide?

Swiss-Asia Hong Kong offers

a platform solution for wealth

managers. We provide

financial services support to

ex-private bankers who aspire

to become independent

wealth managers. our

extensive experience and

networks in the financial

services industry allows

iaMs to focus on client

relationships, as we take

care of supporting activities

like risk management, •••

We provide financial services support to ex-private bankers who aspire to become independent wealth managers.

rIccardo lehmann

swiss-asia am

R I C C A R d O

l E H M A N N

d I R E C t O R

s w i s s -A s i A

a s s e t

m a n a g e m e n t

( H o n g K o n g )

Q&a Hong KongWith sWiss-asia asset ManageMent

ClICK CIRClES tO REAd MORE



compliance, accounting and reporting in a

professional manner. this reduces the time

spent on operational issues required of an IAM,

which in turn optimises the time spent on actual

wealth management and the performance of

client’s assets.


are roles divided?

swiss-asia has four independent wealth

managers with expertise in fixed income,

equities and macro-themed investments. Based

in hong kong, these managers have access

to the operations, wealth management and

research teams mainly located in singapore.

this ensures that business supporting activities

are carefully and efficiently managed, while

remaining compliant to the ever-changing

regulatory environment.



independent advice?

To differentiate themselves from private

bankers, IAMs should offer truly independent

and tailored client advice. after all, they have

known the clients for a long time. in order to

do this well, iaMs must have the freedom to

suggest suitable strategies and investments that

are aligned to the specific client’s risk profile

and the portfolio. as such, it is important to

find a supportive external wealth management

platform which puts client needs in the focus

of all they do.

For example, the Swiss-Asia research team

produces reports and opinion pieces on •••

R I C C A R d O

l E H M A N N

d I R E C t O R

s w i s s -A s i A

a s s e t

m a n a g e m e n t

( H o n g K o n g )




topics, sometimes even

requested by the IAMs.

We however don’t implement

these in a certificate or a fund,

which many firms actually do

to manage more portfolios on

a semi-consolidated manner.

they also do not necessarily

need to find their way into

client portfolios.

in which areas have




moving forward?

in recent times, we observed

that banks are moving

away from the private

banking approach towards

an industrialised custody

service offering, with less

of a personal touch. others

are also increasing the auM

required for each account,

which makes it challenging

to find a suitable bank for

some iaMs’ clients.

When it comes to interacting

with us, many custodian

banks are still very archaic.

For instance, orders need

to be transmitted over

the telephone instead of

transmitted electronically. •••

When it comes to interacting with us, many custodian banks are still very archaic.

rIccardo lehmann

swiss-asia amR I C C A R d O

l E H M A N N

d I R E C t O R

s w i s s -A s i A

a s s e t

m a n a g e m e n t

( H o n g K o n g )




it would help for custodian banks to be better

equipped with digital technology that meets with

21st century demands. over time, we also hope

that iaMs can be viewed as business partners

instead of competitors as going independent

will become the norm in the near future.






of the three, it is the toughest and most

important for an iaM to keep abreast with

regulatory changes. Before recruiting rMs and

educating asian clients, this is the fundamental

task an IAM should master. For many smaller

companies this will be a challenge, as it is

costly to do just that consistently. as such, it is

important to be supported by an external wealth

management platform which has the scalability

and experience to do this well.

at swiss-asia, we aim to overcome the

challenge by sourcing for the right talents

and partners in the regulatory field to help

us navigate growing regulatory demands.



functions and why?

From a risk management perspective, Swiss-

asia always takes a considered approach

towards ensuring sustainable growth.

outsourcing decisions need to make sense,

because our head is on the chopping block

if something goes wrong. By carefully •••

R I C C A R d O

l E H M A N N

d I R E C t O R

s w i s s -A s i A

a s s e t

m a n a g e m e n t

( H o n g K o n g )




weighing the pros and cons,

we expect to outsource

functions like complex

compliance advice and it

reporting, as industry experts

in these areas are not readily

available.


an individual who is keen to

set up as an iaM?

When you become an IAM,

it will offer a real taste of

independence and change

your lifestyle. But do not

underestimate the time,

money and effort required

to become a really successful

iaM. think it through, get your

main clients involved early on.

When it comes to anticipating

how many clients will accept

this move and follow you,

make a conservative estimate

and plan the worst case

scenario. your business

needs to be durable, it needs

to be sustainable even if it

takes a longer time to land

your first clients. •

R I C C A R d O

l E H M A N N

d I R E C t O R

s w i s s -A s i A

a s s e t

m a n a g e m e n t

( H o n g K o n g )

When you become an IAM, it will offer a real taste of independence and change your lifestyle.

rIccardo lehmann

swiss-asia am


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