Economic forces drive expansion
So, with every economic indicator now pointing to sustained growth in Asia in the next few years, accompanied by a rapid rise in high-net-worth individuals, it doesn't take too much to figure out where to focus.
"Any private bank or wealth manager that doesn't have a presence in Asia has definitely got its strategy wrong," says Joanna Chu, head of North Asia, Barclays Wealth. "We are focused on the three key markets of Greater China, Indonesia and India, and are looking to hire across the spectrum including investment advisory, trust structuring, research and [financial] products."
Providing further context, Chu says that the Merrill Lynch Capgemini 2009 Asia Pacific Wealth Report estimated the combined wealth of the region's high-net-worth individuals would grow at an annual rate of 8.8 per cent until 2018. According to the report, this easily surpasses the global average of 7.1 per cent. The mainland accounts for 22.7 per cent of the region's high-net-worth individuals.
"We are looking to exploit an opportunity, and are committed to addressing the needs of clients by continuously building our capabilities," Chu says.
The group has earmarked an additional £350 million (HK$4.1 billion) to invest in people and technology over the next two years. That sum is for worldwide investment but, logically, a higher proportion will be directed to markets offering the best opportunities for organic growth and stakeholder value. Chu indicates both headcount and assets under management in Asia have more than doubled since 2008. Net new assets have also grown "in the double-digit range" in both of the last two years, despite the downturn.
To keep expanding, a priority is to take on senior private bankers with 15 to 20 years' experience. Having been through one, if not more, full economic cycles, they have likely seen it all, so they are ideally placed to offer clients appropriate advice and guidance.
Acknowledging that the wealth management sector faces a talent shortage - not just for senior roles - Chu says the firm is looking to resolve this from the bottom up. That means taking a "resourceful and multipronged approach" by also hiring people with experience in corporate and investment banking, and giving them the tools and training to perform.
"[We] believe it is essential to continue investing to transform the next generation of high performers into true fiduciary investment advisers," she says.
Another key aspect is the search for 120 high-calibre candidates for a three-year private banking graduate programme. Run on a worldwide basis, a percentage of places are for applicants in Asia, who will get extensive training, international experience and a range of professional challenges.
"Ensuring the currency of skills and knowledge is an important part of our strategy, [so that] we are well positioned to take advantage of market opportunities and build our business in Asia," Chu says.
Sermon Kwan, chief executive of the recently formed Bank of Singapore's Hong Kong branch, has broadly similar corporate ambitions. Born of OCBC's acquisition of ING Asia Private Bank in January this year, his organisation's goal is to achieve significant expansion on the mainland by winning new business from high-net-worth clients.
"We have made it very clear that the main purpose is to grow, not consolidate," Kwan says. "Hong Kong and [the mainland] are definitely very important. GDP and assets under management are growing faster than [in other parts of the world] and we expect to see that continue for the next many years."
To advance this agenda, the Bank of Singapore intends initially to implement a four-part strategy. This will entail learning from OCBC's existing eight-office network on the mainland, leveraging strategic partnerships, opening a representative office by the end of the year and expanding the workforce.
"Basically, we are building a platform in Hong Kong which will have very large responsibility for China," Kwan says. "We see a lot of emerging wealth there, which has already grown very substantially in a short period, so we are willing to start off with a minimum threshold for new investors of only US$1 million."
He says there will be regular additions to the 50-strong team, with roles for senior and junior private bankers, and back-office positions in compliance, risk management and human resources.
The general response from candidates during earlier rounds of recruitment has been encouraging, even though the bank's name and separate brand are still getting established.
"We are looking for senior people with entrepreneurial spirit and juniors with a good academic background," Kwan says.