Opinion-r1:AMM grid in qxp 12/30/09 10:18 AM Page 8
OPINION
.....FORMOREOPINIONONCAPITALMARKETMATTERSINASIA,LOGONTOWWW.ASIAMONEY.COM.....
Banksmustimproveinwealthmanagement
Thetraditionalroleofbanksasprovidersofwealthmanagementisunderthreatasneverbeforefrom
increasingcompetitionandachangingregulatorylandscape.Theyneedtoadoptappropriate
strategiestosurviveinamoretransparentworld.
The role of banks as providers of wealth have faced in recent
management services to some of the world’s times.
richest families is being challenged as never But whether or
before. not these local banks
Most did a terrifically bad job of protect- are able to rise to the
ing client assets during the global financial challenge and provide
crisis, which is not something that will easily the sorts of services
be forgotten. that wealth-owning
And as reported later in this edition (see families are going to
story on page 68), even industry heads need is another ques-
themselves are at a loss as to how to win tion entirely.
back customers’ trust. Clients will need
The high turnover of relationship man- strategic advice that is
agers, in Asia especially, is a problem that not only tax compli-
needs to be solved. Clients are clearly fed up ant, but effective. It is
with advisers moving from one institution to worth noting the
another. scope of information
Furthermore, the drive towards global that authorities can
transparency and the elimination of tax request from jurisdic-
havens has changed the competitive land- tions the world over
scape further. In many cases banks have had has expanded from
too easy a time in terms of hiding behind income tax to all
secrecy laws to shelter client funds. taxes.
Contrary to expectations, Asia will not It emphasizes the
offer a port in the storm. Perhaps it is being point that banks must
wrongly viewed by Europeans as a play- focus on education. A
ground to hide undeclared money. Even good private banker
some banks appear to believe they can shel- needs to understand
ter funds for clients from other parts of the the needs of his
world in Asia because its various govern- clients and be able to
ments are not yet focusing on enforcement. raise awareness of a
But the truth is that wealth owners are broad number of PHILIPMARCOVICI
effectively being given two choices: abide by issues ranging from
chiefexecutiveof
the rules of your home country or go and live tax and asset protec-
LawInContext.
somewhere else. tion to succession
Most of the jurisdictions within what is a issues. Marcovici. “These MFOs are taking away 60
richly diverse region are striving hard to The danger if they don’t is that wealth- to 70 basis points of revenue from the banks
build legitimate wealth management indus- owning families will shift relationships to that only become pure custodians.”
tries. They are scarcely going to put that at other parties that give them the level of conti- Evidently there will be a shift in terms of
risk by failing to comply with internationally nuity and degree of input they are looking for. where the offshore business goes and who
accepted standards. Rather, those that stand Philip Marcovici, the chief executive of the successful players will be, and there will
out will provide the clearest guidelines. LawInContext, the interactive venture of be some that simply aren’t able to transform
The real needs of the wealth-owning global law firm Baker & McKenzie, recently into what they are going to need to be in a
families in Asia require a true understanding told
asiamoney.com about the growth of more transparent world.
of the region’s different regimes, including multi-family offices (MFOs) in Asia, some- Banks had better be prepared to deal
the tax, legal and political issues that drive thing that has been going on for some time in effectively with clients who want a portion
them. Europe and North America. of their assets stored overseas in a legal way
In short, banks can no longer afford to be MFOs are firms that provide a variety of where privacy is preserved, where there is
distracted by the past. They need to adopt services to wealthy families, including tax asset protection and where succession is
appropriate strategies for the future. and estate planning, risk management, objec- taken into account.
Many of the onshore banks have the tive financial counsel and investment advice. As Marcovici added: “I don’t see that
advantage of not being sullied with the “They have services that are much more demand declining, I see that demand
issues that some of the offshore operators bespoke for wealth-owning families,” said increasing over time.”
8 DEC2009/JAN2010 ASIAMONEY
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