Private bankers face heavy odds amid staff shortage
Singapore may be short of 900 private bankers; premium on experience now
By CONRAD TAN 11 September 2009
(SINGAPORE) The wealth management industry in Singapore has shed some 300 private bankers in the past two years - mainly inexperienced staff hired during the boom who were unable to cope when the financial crisis struck.
That leaves Singapore short of roughly 900 private bankers that it needs to replace those fired, and to meet the demands of projected wealth growth over the next five years, said Christine Ong, Singapore chief executive of UBS wealth management, at an industry gathering yesterday. ‘This is probably a conservative estimate,’ she said, adding that it was based on a ‘back of the envelope’ calculation.
‘During the crisis, many bankers were weeded out - those who could not deliver on their promises, engage their clients, or win their trust,’ Ms Ong said.
That doesn’t mean another hiring binge is likely, however. Private banks are now seeking mainly seasoned bankers who can handle the complexity of clients’ demands in a financial crisis - and there are too few such people around. ‘We still are short of experienced private bankers,’ Ms Ong said.
The industry’s soul-searching was evident yesterday at the wealth management seminar organised by the Institute of Banking & Finance and CFA Singapore, attended by nearly 300 people. Ms Ong and other top private bankers spoke about the difficulties they and their peers now face in the wake of the crisis: assets under management (AUM) have slumped, regulations are stricter, and clients’ faith in private bankers has suffered.
Some of their difficulties pre-date the crisis - wealthy clients’ habit of using multiple private banks, for instance, which makes it hard for any one bank to attract more than a fraction of their customers’ assets.
Some 62 per cent of private banking customers in Asia held accounts with more than five banks, said Jan Richards, head of private banking at JPMorgan in Singapore, citing industry estimates. One client she knew had accounts with 18 banks, she said, eliciting gasps from the audience.
The speakers also attempted to sketch broad scenarios of the industry’s future in Asia.
Thomas Meier, Bank Julius Baer’s chief executive for Asia, the Middle East and Eastern Europe, said further consolidation is likely as some banks that expanded rapidly into wealth management in recent years shrink and return to their core business.
Peter Flavel, global head of private banking at Standard Chartered, said he expected greater integration of business- and private-banking services to cater to the large proportion of Asia’s wealthy individuals who are entrepreneurs.
Stanchart’s research suggests that some 58 per cent of ‘high net worth’ individuals in Asia have more than half their wealth invested in their own business, including 12 per cent who have more than 80 per cent of their wealth tied up in their business.
Marcel Kreis, head of private banking for Asia-Pacific at Credit Suisse, said that stricter rules and closer supervision of banks’ advisory and sales practices ‘will be a much more permanent legacy of this crisis’ than the flight to quality among clients in recent months.
Pierre Baer, SG Private Bank’s chief executive for Singapore and South Asia, said the crisis had showed that the traditional European approach to wealth management - usually seen as more mature and sophisticated than in Asia - had not spared clients from equally steep losses.
‘If we look at the past year’s numbers, despite the different approaches, the result was the same’ - high-net-worth wealth in both Europe and Asia slumped by some 20 per cent, Mr. Baer said.
To win more clients in Asia, wealth managers will have to adapt to their clients’ preferences, ‘not the other way around’, he added.
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Private bankers face heavy odds amid staff shortage
Singapore may be short of 900 private bankers; premium on experience now
By CONRAD TAN
11 September 2009
(SINGAPORE) The wealth management industry in Singapore has shed some 300 private bankers in the past two years - mainly inexperienced staff hired during the boom who were unable to cope when the financial crisis struck.
That leaves Singapore short of roughly 900 private bankers that it needs to replace those fired, and to meet the demands of projected wealth growth over the next five years, said Christine Ong, Singapore chief executive of UBS wealth management, at an industry gathering yesterday. ‘This is probably a conservative estimate,’ she said, adding that it was based on a ‘back of the envelope’ calculation.
‘During the crisis, many bankers were weeded out - those who could not deliver on their promises, engage their clients, or win their trust,’ Ms Ong said.
That doesn’t mean another hiring binge is likely, however. Private banks are now seeking mainly seasoned bankers who can handle the complexity of clients’ demands in a financial crisis - and there are too few such people around. ‘We still are short of experienced private bankers,’ Ms Ong said.
The industry’s soul-searching was evident yesterday at the wealth management seminar organised by the Institute of Banking & Finance and CFA Singapore, attended by nearly 300 people. Ms Ong and other top private bankers spoke about the difficulties they and their peers now face in the wake of the crisis: assets under management (AUM) have slumped, regulations are stricter, and clients’ faith in private bankers has suffered.
Some of their difficulties pre-date the crisis - wealthy clients’ habit of using multiple private banks, for instance, which makes it hard for any one bank to attract more than a fraction of their customers’ assets.
Some 62 per cent of private banking customers in Asia held accounts with more than five banks, said Jan Richards, head of private banking at JPMorgan in Singapore, citing industry estimates. One client she knew had accounts with 18 banks, she said, eliciting gasps from the audience.
The speakers also attempted to sketch broad scenarios of the industry’s future in Asia.
Thomas Meier, Bank Julius Baer’s chief executive for Asia, the Middle East and Eastern Europe, said further consolidation is likely as some banks that expanded rapidly into wealth management in recent years shrink and return to their core business.
Peter Flavel, global head of private banking at Standard Chartered, said he expected greater integration of business- and private-banking services to cater to the large proportion of Asia’s wealthy individuals who are entrepreneurs.
Stanchart’s research suggests that some 58 per cent of ‘high net worth’ individuals in Asia have more than half their wealth invested in their own business, including 12 per cent who have more than 80 per cent of their wealth tied up in their business.
Marcel Kreis, head of private banking for Asia-Pacific at Credit Suisse, said that stricter rules and closer supervision of banks’ advisory and sales practices ‘will be a much more permanent legacy of this crisis’ than the flight to quality among clients in recent months.
Pierre Baer, SG Private Bank’s chief executive for Singapore and South Asia, said the crisis had showed that the traditional European approach to wealth management - usually seen as more mature and sophisticated than in Asia - had not spared clients from equally steep losses.
‘If we look at the past year’s numbers, despite the different approaches, the result was the same’ - high-net-worth wealth in both Europe and Asia slumped by some 20 per cent, Mr. Baer said.
To win more clients in Asia, wealth managers will have to adapt to their clients’ preferences, ‘not the other way around’, he added.
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