Ex-Bankers Following Swiss Gain Traction Advising Asian RichSanat Vallikappen
Independent asset managers, who advise rich clients of private banks on their investments, may at least triple the funds they oversee in Asia as demand for specialized products rises, said Taurus Wealth Advisors Pte.
Independent managers, mostly former bankers, will increase the assets they advise on in the region to about $70 billion by 2017 after boosting them to about $20 billion now from $4 billion five years ago, Mandeep Nalwa, chief executive officer of Singapore-based Taurus, estimated in an Oct. 23 interview. Nalwa was a founding member of the Association of Independent Asset Managers, which was formed in Singapore in March 2011,
The current asset total is less than 2 percent of the amount Boston Consulting Group estimates is managed by private banks in Singapore and Hong Kong. That compares with at least 15 percent of assets managed by private banks in Switzerland, according to Bank Pictet & Cie Asia Ltd.
“Savvy investors would have more sophisticated needs that require specialized knowledge or offerings in certain asset classes or investment markets,” said David Reymond, Singapore-based head of the Asia desk that engages with independent asset managers at Julius Baer Group Ltd. “While banks are certainly well-equipped to assist clients in their financial matters and investment decisions, one needs to acknowledge that they can’t be the industry leader in all investment areas.”
Independent asset managers help their millionaire clients choose and package a portfolio of investment products available at various private banks including Julius Baer. The external managers typically lead clients to banks or funds that specialize in particular products such as tax-saving instruments, asset-backed securities and commodities.
Each of the external advisers “have their niche, have their forte,” said Cyrus Daruwala, Asia-Pacific managing director of IDC Financial Insights, which provides research and advice to financial companies. “There are some commonalities that are expected -- they’re truly unbiased, truly independent, truly profit-driven.”
Offshore wealth assets held in Hong Kong and Singapore jumped 20 percent to $1.2 trillion last year as Asian millionaires led by China chose those local financial centers over Europe’s, according to a Boston Consulting Group study released on May 31.
The two Asian cities are projected to hold about 18 percent of global assets managed for people resident or domiciled in other countries by 2017, compared with 15 percent in 2012, the report said.
There are about 30 independent asset managers in Singapore, according to Sylvain Gysler, head of the Asia desk that deals with those advisers at Swiss bank Pictet. Hong Kong has about 12, estimates Philippe Legrand, the Asia chief executive officer of London & Capital Plc, an external asset manager.
Legrand has worked in BNP Paribas SA and ABN Amro Group NV’s private-banking divisions. Taurus’s Nalwa worked previously at the wealth-management units of Bank of America Corp.’s Merrill Lynch and Citigroup Inc.
Independent managers in Switzerland account for a little more than $300 billion of the $2.2 trillion of assets managed by private banks there, said Pictet’s Gysler.
Buoyed by economic growth, Asians with at least $1 million in investable assets are expected to see their riches climb to $15.9 trillion by 2015 from $12 trillion last year, according to Cap Gemini and Royal Bank of Canada’s 2013 Asia-Pacific Wealth Report released on Sept. 25.
“The more the private banking industry matures in the region, the more you will see senior private bankers wanting to become independent and set up their own business,” said Hans Goetti, who worked at Citigroup and LGT Group before becoming Asia chief investment officer of independent manager Finaport Investment Intelligence. “In Switzerland, the pinnacle of your career is when you become independent.”