The growth path of Leo Wealth

Video transcript

1. Can you please give us an update on recent developments within Leo Wealth?

We've seen quite strong growth within Leo Wealth in 2022. Despite it being a difficult investment year, we've seen tremendous growth in new clients, new client accounts, but also in client assets. But, the key reason for our growth last year is the fact that we've greatly expanded our tech services and our financial planning services. One of the things we did is we opened an office in Tokyo, which now has eight colleagues working there, with a strong focus on tax, US tax, Japanese tax services, and financial planning, especially for ex-pats in Japan, but also for the wider region. Then we acquired a small business in Singapore, Yakin Capital. We are very happy to have them merge into the Leo family and, since the 1st of January, they’re formally Leo Wealth Singapore. Yakin was very much focused on investment advice, discretionary portfolios, and has developed a technology called iAdvisor, which makes it much more efficient to manage discretionary portfolios, and we plan to use this technology across the board of all our other officers in portfolio offerings. In January alone, we have grown the number of colleagues by about 20%, again, with a strong focus on the tax team and on financial planning because we see and notice that a lot of clients need really integrated wealth management. Even though my job is running portfolios, I can see the real value in being able to offer tax advice, tax preparation, and financial planning. We always said that is what we want to offer for global citizens, people who live in different countries who have assets or interests in different countries, and it turns out it's very difficult. There are not many good service providers who can really understand the space between Asia and the US, especially, but also between European countries so we have a lot of families in the last couple of years who moved countries. They don't necessarily need investment advice, they need financial planning and tax advice so we've been greatly expanding on that. Also, because we noticed that there is more and more demand for US tax advice. It's not just a typical American ex-pat that we can help, it's also a lot of Asian families who have either children living in the US or simply have assets or operating businesses in the US and there are simply not many international tax advisors like us who have tax preparers and tax specialists on the ground in Asia and who speak Asian languages to help clients, and that has been a great introduction for a lot of our new clients last year.

2. Why do you think tax and planning has such an important role in wealth management?

Tax planning becomes more and more important. Obviously, in the old style, like 20 years ago, a lot of tax planning quite often amounted to tax evasion. In today's world, that doesn't exist anymore. You want to be fully tax compliant and tax rules differ per country and are complex but, at the same time, a lot of countries offer different opportunities, especially for internationally mobile families. Helping clients find the right way and to understand some of the liabilities or risks they might be taking that they might not be aware of is actually very important. Together with financial planning, those areas are actually what wealth management is really about. The investment piece is important but it's only the last step in the cycle. It's a means to achieve your long-term objectives. But tax planning and financial planning are your first step, which is determining what are actually your financial objectives and how you get there in an optimal way, and what if things change along the way. What if I move to another country or things in my life happen and I need to adjust? That is where financial planning and tax planning are really important and that is also why we are now focused much more on building out those teams both here in Asia with our offices in Hong Kong, Tokyo, and Singapore, and our three offices in the US where financial planning is much more common We noticed that that sort of financial planning is actually very valuable to a lot of families in Asia. In the investment part, portfolio management only comes last. It's important because we need to deliver returns for our clients to achieve their long-term goals but first, you need to be clear about what your goals are. That includes estate planning, generational planning, or simply sometimes includes tax planning when you move to another country.

3. Why do you only do discretionary portfolio management?

I've always been a strong believer in discretionary portfolio management, that's what I've been doing here for 20 years. In Asia, still today, it's not the most common way of providing investment advice while in the US and Europe, it's much more common that clients who want to achieve certain investment objectives as their money manager to manage parts of the portfolio for them. I always strongly believed in that. I always, in my background, I always run discretionary portfolio teams at the different banks I've worked at and I believe it's the best way for clients to have their money massed. We are focused, and we are much more consistent than clients typically are in their own personal portfolios. We tend to pay more attention to risk than most of our clients do themselves. At the same time, we don't offer only core portfolios because we do realize that for clients investing. Entertainment is a large word but clients would like to choose where they want to put their money to work. The way we deal with that, especially with the more advisory mentality we come across here in Asia, is to offer a wide range of different model portfolios, from really core portfolios to very thematic portfolios. We allow clients and our advisors together to build a portfolio strategy that suits them and that can include up to eight different model portfolios combined in one portfolio to build a portfolio that suits the clients best with all these elements or these modules, so to speak. They're actively managed by our investment team that's based here in Hong Kong and Singapore, and in New York and in Dallas. We work as a global team so our clients in Hong Kong will get the same portfolio choices as our clients in Dallas and New York.

4. What's next?

We said, among the partners, we want to be the best in offering a combination of tax advice, financial planning, and portfolio management. It will be hard to be the best in every single piece of it but we believe we can globally be one of the better firms that offer an integrated package of tax planning, financial planning, and portfolio management. For that, obviously, we also need to be in different jurisdictions and places. Last year and this year, we actively grew our footprint in Asia by opening an office in Tokyo and in Singapore and we have already a nice spread in the US, so what is next? We still see a lot of opportunity to develop management space in the US, so we are looking at several new locations in the US to open offices, whether it's the northeast, the southeast, Florida, or the west coast, which has a strong connection with Asia. At the same time, we're looking at other opportunities in Asia and, of course, we are missing an important step between Asia and the US. Currently, we do not have a base in Europe, and that's another area that we're seriously looking at and hopefully establishing a presence in Europe in the coming month to three years. At the same time, we also keep growing our teams. We've grown our team last year by more than 30% and we reckon we can continue doing that. Now that we have more and more momentum and more and more clients, we are able to attract more high-quality people to our firm and we reckon that we will continue to keep hiring both in the US and in Asia. All our locations actually keep growing at the moment.

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