Sentiment among many professionals in Asian wealth management is towards fee-based services,but this relies on the right people, processes and culture within an organisation.
Panel members
- Eng Huat Kong, Chief Executive Officer, Singapore and South-east Asia, EFG Bank
- Richard Piliero, Regional Executive, Finaport
- Noor Quek, Founder/ Managing Director, NQ International
- Bert-Jan van Essen, Head APAC, Assentis Technologies
Panel highlights
Significant regulatory-driven shifts in many countries towards a more fee-based approach to advice is forcing the wealth management industry to assess how to adapt models accordingly prepare financial advisers, and ensure clients fully understand the implications, said speakers at Hubbis’ Indonesian Wealth Management Forum 2012 in Jakarta.
Among the panel members, the general consensus was that transparency plays an important part, both in attracting interest as well asin the advisory process, too.
Richard Piliero, regional executive at Finaport, said clients are beginning to realise that transaction-oriented business is costly and often doesn’t produce the desired results. Therefore, when advisers start to recommend a fee-based approach it resonates with the client.
“At Finaport, we prefer the client to pay us a fee and then whatever retrocession we get back from the client’s bank, we give it to the client,” said Piliero. “That is very transparent and it is attracting a lot of interest.”
For Bert-Jan van Essen, head of APAC at Assentis Technologies, transparency is the key to building up the client’s trust and ensuring that practitioners provide the right advice to service a client’s needs.
“In all of a client’s contact points, be it a relationship manager or even an iPad, organisations need to be very transparent on what the costs are and how the fees are calculated, because that will gain you the trust in the end,”he said, adding that he believes there will be a quick shift to a fee-based model.
Eng Huat Kong, chief executive officer of EFG Bank in Singapore and South-east Asia,said that there are also cultural challenges when trying to introduce the fee-based model in Asia.
“It is very challenging in Asia because clients feel that they’re paying the 1% and not really getting anything in return,” said Kong.
Firms need to be different ways to approach clients in different jurisdictions, due to the differences in culture.
“Different markets have different cultural nuances so whilst we may get the best from the Swiss, American and European market places, we have to understand the different cultures [in Asia] and react accordingly,” explained Noor Quek, founder and managing director of NQ International.
Another obstacle, added Kong, is that some clients aren’t very willing to pay the 1% fee in an environment where the return is usually only around 5% to 6%. As a result, having the right people in place to advise clients is essential.
Click these links for more details about the Indonesian Wealth Management Forum 2012:
Video highlights: http://www.hubbis.com/video.php?vid=1352439422
Agenda: http://www.hubbis.com/forum/wmf2012_id/agenda.php
Photos: http://www.hubbis.com/forum/wmf2012_id/photos.php
Presentations: http://www.hubbis.com/forum/wmf2012_id/presentations.php
You might be interested in
