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Ready to ride the dragon

Published on Friday, 06 Jan 2012
Hong Kong-based banks are busy hiring and training a new breed of wealth managers to serve and profit from China’s high net-worth individuals.
Photo: AFP

Escalating numbers of wealthy mainlanders with ties to Hong Kong are expected to create opportunities for financial planners and wealth managers with the necessary experience and training. According to the Boston Consulting Group, the level of wealth creation in China is growing at a very noteworthy rate of nearly three times the global average.

In its recent "Wealth Report on Asia", Swiss private banking group Julius Baer concluded that China will have as many as 1.4 million high net-worth individuals by 2015.

According to the standard used by the lender, each will have investable assets of at least US$1 million (HK$7.8 million) and as a group will account for US$8.76 trillion (HK$68 trillion) in wealth by 2015. Adding to this, many in the wealth-management business believe that the increasing liberalisation of the yuan and potential easing of capital controls over the coming years will spur even more opportunities to tap into this multitrillion-dollar pot.

While the mainland may be minting millionaires at an unprecedented rate, financial planning is still at an early stage. "At the moment, wealth-management education is our primary focus," says Thomas Tang, a private client services manager at ipac Financial Planning. 

In addition, Tang notes that the financial group's internal training emphasises teaching clients to navigate the emotions triggered by market volatility - namely, adjusting goals.

The education process also focuses on holistic financial planning. Tang says it is customary to have as many as four meetings with a potential client to fully understand his circumstances, needs, risk profile and objectives, before any mention of a financial plan is even mentioned, let alone implemented. 

Another factor fuelling wealth-management opportunities is the increasingly favourable regulatory environment that's emerging. As China's central authorities gradually relax operating and service restrictions on foreign banks, private and multinational institutions seem to be quickly responding, by way of expansion.

In recent years, HSBC, Standard Chartered, Bank of East Asia, Hang Seng Bank, and DBS have all broadened their business scope to focus on the national wealth-management market as opposed to just Hong Kong. However, talent shortages have been a drag.

To overcome this, ABN Amro has devised a strategy to double the number of its private-bank relationship managers over the next five years. The Dutch bank, which employs 200 frontline staff, has teamed up with the INSEAD Business School to provide training and certification for its relationship managers. Core areas of study include financial service delivery, culture, processes, and service to clients.

"This way, everyone wins," says Hugues Delcourt, CEO of ABN Amro Private Banking Asia. "The client is reassured... while the relationship managers gain a qualification that's highly valued in the industry. The bank also wins because our staff are providing a quality of service that will help deepen our client relationships." 

In terms of which levels the bank will be recruiting for, Delcourt says that ABN Amro is investing heavily in developing the skills and opportunities for junior, middle and senior personnel.

"Ultimately, the wealth-management business is people-centric. Our strategy is hiring and developing the 'right' managers," says Delcourt. "We're looking for those with a 'strong people' attitude."

ABN Amro recently announced an Asian expansion plan centred around its global energy, commodities and transportation (ECT), private banking and clearing businesses.

Maaike Steinebach, CEO of ECT for Asia and country executive for Hong Kong, says expansion would create opportunities for graduates from Hong Kong and the mainland with a background in finance, economics and engineering.

"Because of the shortfall of university-level commodity training, we provide extensive on-the-job training," he says. "We look for people with an exploring, open mind, and entrepreneurial spirit, and who want to gain on-the-ground experience."

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