Su Shan Tan, managing director and group head of wealth management at DBS Bank, explains to Hubbis what wealthy Asian clients want and need in today’s environment – and outlines what she is doing to try to deliver this.
Date: June 29, 2012
What is required to deliver value to clients in today's environment? And what are you doing to achieve this?
While investment performance is a part of any wealth management strategy, prudent and well-rounded wealth management involves more than that. Clients appreciate our emphasis on asset allocation, and we are proud of our Asia-centric asset allocation models.
Unlike the traditional Western-style asset allocation model which has a greater percentage in the US, Europe and other developed markets, our asset allocation for our Asian clients has a higher weight in Asia ex-Japan equities or Asia fixed income. Our clients, who are obviously primarily Asians, want an Asian flavour to their asset allocation. They want their assets to be in a market they understand, in a currency that they require, and also to benefit from the longer-term growth in Asia.
Last year, we also set up our family office advisory team, as we realised that most of our clients, who are first-generation entrepreneurs, have reached a stage in their lives when they are thinking about wealth succession and building a legacy.
We also strongly believe in delivering value to our clients by combining wealth creation with a solutions-driven approach to wealth management. DBS' strong corporate and commercial banking franchise in Asia allows us to provide our Asian-based customers with regional connectivity and understanding of all our major markets in the region. This is invaluable to our clients, whose main business activities are centered on Asia.
How do you bridge the gap between a client’s business and personal needs?
Our understanding of our clients’ business needs in Asia also enables us to provide a holistic solution to their wealth management needs. We are then better able to re-position our clients' priorities for wealth preservation, risk management and succession planning, so that they can provide for their futures and their families' futures.
For example, if we have clients in the oil and gas sector, we work closely with our sector experts from the corporate and investment bank in order to add value to their business. This also enables us to be far more effective in suggesting the right kind of wealth management tools, such as hedging strategies or addressing liquidity needs. We often link them up to potential partners or co-investment opportunities in their sector, too.
Ultimately, delivering value to our clients is about understanding and anticipating what they need, and we are fortunate that as part of a universal bank, we can leverage the entire bank to meet those needs.
How is the new-norm of volatility and an uncertain investment outlook affecting the conversations clients have with their bankers about products, services and strategies?
The last global financial crisis has taught investors about the downside risk of leverage, and this time round, investors are definitely less leveraged than they were, and more well-prepared in times of market downturn and volatility.
In the past few months, with the Eurozone situation still uncertain, both clients and bankers have acknowledged the volatility of the markets and are now working on diversifying their assets. The conversation now is very much about asset allocation, and also on looking for value amidst the market turmoil.
How critical is technology to a private bank's ability to provide the right client experience?
Technology has also become a key differentiator. Last year, we enhanced our internet and mobile banking platforms to enable our clients to view their investment portfolio online while they’re on the move.
We are also proud to be the first bank in the region to provide a consolidated online view of our clients’ banking facilities (credit cards, current account, etc) and investment holdings.
The usability of our platform – in terms of how convenient and easy it is for the client to access his data – will drive and differentiate the client experience.
Can clients really engage and prepare the next generation?
Yes, definitely. Last year, we organised our inaugural “2nd Generation Program”, which we are holding again in the third quarter of this year in Hong Kong. While European and US wealth can be classified as “old wealth”, Asia is “new wealth”.
The objective of the programme was to give the next generation of wealthy families in Asia a sense of ownership of what they need to do for their own future. They need to recognise that their parents created this wealth fairly recently and this is wealth that they may choose to take over or not. They need to start thinking for themselves.
Most of the wealth creation right now in Asia has been in businesses, and a lot of Asian parents have high hopes for their children to carry on their legacy. This may or may not happen, but it is important to engage and prepare the next generation, especially during their formative years of 18 to 25, when they are just starting to carve out their own lives.
The “Gen Y” or “Gen Z” that we have met have all said to us that they want responsible investing, and socially-responsible actions. It was definitely an eye-opening experience for them, and for us as well, and it was heartening to watch them take such a keen interest in their own and their families’ futures.