Crossinvest (Asia) COO & Head of Wealth Management on Building the Female Clientele in Asia and the Value of Loyalty
Hubbis hosted a fascinating panel discussion on May 11 in Singapore titled ‘The Pathway to Inclusive Investment’. The conversation was hosted in partnership with Pershing Singapore, a BNY Mellon company, and featured as the second panel of our Independent Wealth Management event at the Pan Pacific hotel in Singapore. One of the expert panellists was Lucy Gao-Azak, who since January this year has been the Chief Operating Officer & Head of Wealth Management for Crossinvest (Asia). She offered delegates some valuable insights into issues such the reasons there remains what can be called a gender investment gap, and how the wealth industry can build a more inclusive investment environment. She explained that female clients are often more loyal to those who provide them good performances and services and tend towards more discretionary mandates that can provide a greater degree of revenue certainty for leading independent firms such as Crossinvest (Asia). We have distilled some of her valuable observations and advice in this short report.
Crossinvest (Asia) is a leading privately-owned wealth & asset management company in Asia and Singapore that in late 2020 announced a change in ownership with Cem Azak joining as the Chairman & CEO and becoming the majority shareholder. Before the move, Azak had been Senior Managing Director, Market Head International & Member of the Private Banking Council at EFG Bank. The release at the time stated that Azak's move had resulted in Crossinvest (Asia) more than tripling its client base of Ultra High Net Worth (UHNW) individuals and families.
Cem Azak stated at the time that the plan was to further develop the family office services for wealth planning through the firm’s global network of experts to structure efficient and bespoke solutions for every client's specific estate planning objectives.
“Whilst we continue to focus on investing across the global financial markets with access to multi-asset class solutions, Crossinvest (Asia) will also be offering more private equity and venture capital opportunities for our clients,” he stated at the time. “This could include financing solutions and investment opportunities for clients' companies as well. I like to call it ‘private investment banking’. We aim to be a ‘one-stop-shop’ for our clients where they can receive comprehensive advice and integrated solutions for all their needs – from investment needs to business financing needs, from wealth planning to legacy planning.”
With a heritage and pedigree that dates back to 1985 in Switzerland, Crossinvest (Asia) is one of the first such firms to have received a full licence from the Monetary Authority of Singapore for fund management in 2005. Crossinvest (Asia) is also a founding member and one of the largest members of the Association of Independent Wealth Managers in Singapore.
Relevant HNW and UHNW experience
Lucy Gao-Azak is the fairly recently appointed COO and Head of Wealth Management of Crossinvest, and introduced herself to delegates at the May 11 event, remarking that she had spent over 15 years in the wealth management industry across London and Singapore, and had worked for different types of banks from major US names such as Morgan Stanley to Swiss boutique banks such as EFG, as well as regionally at DBS Private Bank.
“I have always covered (UHNW) ultra high net worth clients across Europe, Middle East and Asia,” she explained. “And during my career, I've done quite a bit of mentoring as well as working on some next generation programmes, trying to encourage different types of investors, including younger investors particularly female investors to become more involved in the financial markets. I have an educational background in engineering science, which is also traditionally a very male dominated arena, so from both a personal and professional perspective I have been a keen proponent of inclusivity.”
Lucy explained that she and Crossinvest (Asia) agreed with several conclusions from the recent study Pershing Singapore had conducted and just published on the need for greater financial inclusion amongst women, especially in Asia.
The study concluded that women could add at least USD3.22 trillion to global investments and increasingly want to invest in businesses that can have a positive impact on society. The study surveyed 8000 women and men and 100 asset managers with nearly USD60 trillion in AUM.
Three barriers to entry
It found that there are three main barriers that deter women from investing. One is an income hurdle, the second is the perception that investing is inherently high risk, and the third hurdle is lack of engagement by the investment industry.
“We often see from reports such as from Forbes that the main sources of wealth for UHNW females are derived from inheritance or even from divorce, and that the proportion of women who are actually deemed self-made is still far lower than for men,” she observed. “Women often feel their wealth is more finite, and they may fear investment losses can take longer and be more difficult to replenish. And that could be one of the reasons more females may be more hesitant when it comes to investing.”
More women wanted
She said another core impediment was the under-representation of female practitioners in the wealth & asset management industry, and that much of the investment language may appear over-complex at times. The hurdle she said was not intellectual capability, but more the specialisation and apparent complexity around investments.
“Typically, men have perhaps a higher interest in investing from an early age, but for women there seem to be more barriers,” she explained.
“And much of the investment product marketing still appears to be tailored to men and seems to liken investing more to the gambling or trading mentality. Women, however, are likely to be longer-term investors and want to plan more for the future, and thus short-term gains with higher potential risks are often less appealing.”
Nevertheless, she observed there is an encouraging shift taking place. “One of the findings of this study is that with younger women, they are keener on investing now, and that might be down to more engagement through social media, and the proliferation of different methods of delivery and information, as well as the improving education and awareness of women in general.”
Asia lags behind
She observed that from her experience of working in the wealth management industry, there are individual and institutional reasons for women’s lower participation. “One thing I've noticed is that in the US and in Europe, there have for quite a number of years been many next generation programmes encouraging young or female investors, and there are a lot of effort within the banks and other financial institutions to encourage diversity in participants, whereas in Asia, it appears considerably less,” she reported.
Additionally, from a client or individual perspective, wealth in Europe consists of higher proportion of multi-generational wealth or “old money” whereas in Asia it is more first generation wealth. “The result is that wealth is actually more spread amongst women and amongst the generations in Europe, whereas in Asia it is more first or creator generations, so there has been less time to spread that amongst the younger generations and amongst women,” she commented.
Nevertheless, Lucy explained that time is moving on in Asia and progress is being made. “We are approaching more of the second generation of wealth now, and although as yet the numbers might not be so big in the region, it is still sizable, growing fast and an important market that I think our industry would like to capture. Moreover, from my personal experiences, female investors and female clients can often be very loyal, and they take a longer-term view on managing their wealth and are more patient in achieving their ultimate investment objectives.”
At Crossinvest, for example, she explained they have legacy clients who have been with the firm for more than 15 years and a sizeable proportion of those are female.
“We have very large, sophisticated clients who have given us more and more assets to manage over the years, many of whom are women, and they focus on the next generation of wealth and estate planning as well,” she said. “They tend to also be more involved in wealth planning structures. Many are also discretionary clients whereby a flat % annual management fee is charged for the portfolio management, and those recurring revenues compared to the more volatile brokerage fee model are very important for our business and this industry in terms of sustainability.”
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