Asia's Rich Are Wary of Private Bankers

Clinton Ang, the grandson of a Chinese merchant who emigrated to Singapore in the last century, oversees a fortune valued at almost $80 million for himself and three siblings. That makes him a prime prospect for wealth managers in Singapore, the private banking capital of Asia. Yet the 39-year-old managing director of Hock Tong Bee, which evolved from a humble seller of gunny sacks into a purveyor of $6,000 Grand Cru wines, has already fired two bankers. “We felt we could do better ourselves,” says Ang. He’s cut the portion of his family’s money managed by professionals to less than 5 percent, from 25 percent three years ago.

Disillusionment with investment products and returns is prompting well-to-do Asians to take greater control of their wealth. That’s a vexing development for several global wealth management firms that have made big bets on expanding in the region, now home to more millionaires than North America. Managers at HSBC Holdings, UBS, Citigroup, and other banks catering to high net worth clients in Asia have full discretion over their portfolios for just 4 percent of assets under management, according to a June report from Boston Consulting Group. That’s down from 7 percent in 2006. In Europe it’s 23 percent, rising from 18 percent six years ago. (The report did not cite comparable figures for North America.) “Asia’s wealthy lost a lot of trust in their private banks and private bankers during the 2008 financial crisis,” says Peter Damisch, a BCG partner who co-authored the report.