What content have you seen recently that's potentially interesting to this industry? - Malik S. Sarwar

Video transcript

1. What content have you seen recently that's potentially interesting to this industry?

Thank you all. The last panel was really interesting because of diverse views. I'll try to, thanks to you, summarize 20 points that were mentioned, and I'm sure we missed a few that were highlights from the day. We'll put those together. Let me just start with what we heard, and this right now randomly, hot of the press. First, productivity and talent has not gone up, the cost of talent has gone up because they keep moving from bank to bank, charging more, interesting. Clients have become a lot more demanding. The quality of the RM and the field dealing with the clients has not kept up with that. Need to challenge to clients is a very interesting one. We're always talking about educating clients, absolutely. Sometimes you need to challenge their beliefs or something that they may be unrealistic about. Continuing on that, we need to make sure clients are always educated. I call it, initiative RED, Reassure, Educate, Deepen the relationship, not sell, especially in bad markets. Millennials, a vast majority, at least in the U.S., are closing their Papa and Mama accounts, and going either online, to ESG, or doing something else. Then we found why wealth managers have to rethink their revenue mix. That was a very good presentation, especially because the margins are going down from 70 bps to 60 bps, and they're likely to continue going down in Asia. D Discretionary is not a big deal here yet in terms of size, though it is growing, versus the US, and that has opportunity, but it has always been an uphill task. In terms of the cost allocation transparency, there’s less of that and clients need more of that. Conversely, the problem is we have the, somebody said 90-10, at least 80-20. We keep going to the same clients for most of our business, and inadvertently ignoring, because the books are so big, the service for most of the clients deteriorates. What else do we have? Wealth preservation, I think was a family governance, very interesting. Focusing on external threats and internal threats. The toolkit for wealth structuring, I think was another very interesting one. End to end, how you actually help families. They make money by taking risk, but they need to preserve it by what they made so it passes on to the next generation and the following generation. There was a talk on private banking at crossroads and how private banking can become a lot more meaningful to clients. On the products side, we actually heard quite a lot. There was the dynamic risk management by Harold, very tempting. There were Shark [structured] notes, 100%, or 95% principal protected, that may have a place in asset allocation for clients, especially those that are sitting in deposits, scared of the markets, could be a step into getting into the investment field, but at a cost to them. China versus US, the last panel was very interesting. Gold, and I never thought jewellery as an investment. My wife got jewellery, luckily, she works, so she pays her own money. I said, "Can I add that to the net worth?" She said, "No." "Why not? The price has gone up. I did some calculation on that." She said, "Absolutely not, because when you put it in net worth, you're being cheeky and one day you'll say we'll have to sell it because you'll lose everything else." I said, "So what's wrong with that?" She said, "Before that happens, I'll choke you and I'll collect the insurance. But you're not touching my jewellery." I don't believe it is part of asset class in the context of how its viewed. If it's different, so be it, tell me, because I'll add that, and she has a fair amount of that. Finally, ESG. That seems to resonate quite a lot. We did recognize that Europe is the leader and continues to. The US is sort of in between, and Asia is behind the curb, but it looks like accelerated interest. Perhaps some of your enhanced products that are linked towards the millennials will actually become even more meaningful, because they like that kind of enhanced products, it seems. To pull it all together, there are three things I'd like for the delegates to take away from this conference. First, if you're leaders of people, show tough love. You don't have to be a rugby player, like Tobias. You can be a great leader but tough love is important. Not this, "Oh, you're doing great and, you know, thank you and all that." There's too much of pussyfooting and trying to be politically correct. We need to be tough with the generation that has to work the hard way to earn it. Secondly, the banking industry has nobody. Nobody has come up with a name globally that says, "This is the Disney of financial services. This is the Ritz of financial services. This is the Amazon of financial services." When we asked a panel, all they came up with was one regional Asian bank, a few people and that's only regional. There is an opportunity for those who can actually come to the fore and succeed. The final thing I wanted to share was Yuval Harari. I think asked other people, some of you may have been in the room, how many of you know Yuval Harari? Okay, so one, two, three, four, five. He is, ladies and gentlemen, the visionary of the future, because he is original. Please read Homo Sapiens, 21 Lessons for the 21st Century. The curiosity will get you knowledge. It will challenge your assumptions, expand your horizons, and make you a better person and a better professional. He is that original, that good. I only found out about him because Barrack Obama, as president was carrying his book, and all of a sudden, people said, "Who is this guy?" He's Israeli and now working as a PhD professor of history in Oxford. This is something that I would suggest you do every day, every week, every month, with your staff who excel. I worked 17 years at Merrill Lynch. When I was a junior staffer, the CEO of Merrill Lynch gave me this. It's a silver. Its value today is $16, one ounce. I wish it were gold. I wish it were diamond, then it'd be millions. It says, "One troy ounce silver. A tradition of trust, Merrill Lynch." I keep it with me, I take it with me everywhere, because the recognition by the CEO and I meant nothing to him, meant a lot to me, and I stayed there 17 years. I didn't retire there, I stayed there 17 years. While we are doing our businesses, we need to make sure we're taking care of ourselves, our families, our friends, etc. This is a plane. My younger son gave to me because I was always on the plane. He said, "Dad, keep this with you in your briefcase, you will think of us when you're away." Between recognition of staff, which is so easy to do, and so uncommon to do, and putting on top of that your own values and family, makes life worthwhile. You're all part of the 0.1% of the world. You're all gold-getters. As you become gold-givers as well, you will be more satisfied in what you do, not necessarily financially, but in the satisfaction, and make the world a better place, where the majority are still suffering at the bottom of the pyramid. Thank you, Michael and Michelle, for hosting this, and making it worthwhile, and sharing all the ideas with you great folks. Let's make wealth management great, again and again. Thank you.