As Asia continues rising, opportunities in private banking have never been better, says Credit Suisse’s Jullie Kan
With an estimated seven million millionaires in Asia today and only 10,000 private bankers to serve their wealth management needs, the growth potential for private banking in the region and the opportunities for those joining it are significant, says Jullie Kan, managing director and vice chairman of private banking for Southeast Asia at Credit Suisse.
In her role as senior advisor for Credit Suisse’s “Grow Your Own” programmes for private banking in Asia, Kan was in Hong Kong in September on a recruitment drive. She says private banking is still a very new industry in the region and is substantially short of talent.
“On average, a dedicated, successful relationship manager [RM] will handle around 35 to 40 good relationships. If you do a bit of maths, you realise that for seven million millionaires who could be potential private banking clients, you probably need 200,000 private bankers.”
From 2012 to 2014, Credit Suisse reported growth of more than 60 per cent for its private banking business, taking the value of its assets under management to 149 billion Swiss francs (HK$1.1 trillion), as of June this year.
Kan explains that the bank’s Grow Your Own initiative seeks to hire and develop talented individuals in two categories.
Fresh graduates will join the business as analysts and undergo a rigorous training programme. Upon completion, they will have gained hands-on experience as an assistant to an RM, received technical training on products, markets, economics and selling skills, and rotated to middle and back office functions in the COO office.
“This will give them ‘front to back’ experience and enable them to embark on a junior banker track,” Kan says. “After they have been successfully onboarded as a junior banker, based on their performance, they can be upgraded to assistant vice-president.”
Private banking associates, on the other hand, are recruited from MBA holders who have four to six years of work experience, which may or may not be related to banking.
“Within 24 months, associates will have learned about the products, the private banking platform and the skill sets required when prospecting for new clients. They will also have the opportunity to service a portfolio of clients that a mentor or sponsor ‘downloads’ to them,” Kan says.
If associates meet the criteria and do well, they can carry a business card as an RM within two years. Within three years of joining the bank, if they perform well, they can be upgraded to vice-president.
Kan says Credit Suisse is looking for distinct qualities when recruiting for its wealth management operation.
“Private banking is a relationship business that is less based on transactions and deals; we are there to drive long-term relationships. A good private banker needs to be an extrovert who enjoys meeting people, engaging with them and building relationships.”
Kan sees the raft of new regulations introduced in many countries following the 2008 global financial crisis as a positive thing. But it has also increased the range of an RM’s responsibilities, as well as their workload.
She adds that much has changed since 30 years ago, when clients’ investment options were usually limited to equities and bonds.
“Coming out of the Asian financial crisis, we saw that our clients didn’t just want to trade in the stock markets. FX trading had become popular, particularly among Indonesians,” she says.
“There were structured products – different kinds of derivative-based solutions – created by investment banks and some of these were starting to become available to private banking clients. There were new IPOs coming up in the US and Asian investors were asking why these weren’t available to them. And in the 1980s, hedge funds and private equity funds were unheard-of asset classes for private investors.”
The demographics and needs of private banking clients across Asia have also evolved in the past three decades, Kan explains. Asia has gone through several financial cycles and new economies and frontier markets have emerged. Many new rich people have been created and their needs, in terms of demographics, are different.
“You have an entrepreneur who says ‘I can take risks, I am still young and building the business.’ There are also those who say ‘my entire savings are in the business that I have already built, I don’t want to lose it, I want to unlock it,’ and you [have to] help him think of how to monetise some part of the hard-earned savings he has put into his business – for example, through listing or merger.
“[You also have] successful business owners in their 60s and 70s who are beginning to think thinking of how to hand over to the next generation – is it handing over the business, creating a safety nest, or planning for grandchildren.”
This article appeared in the Classified Post print edition as Growing assets.