Wealth Management-r1:AMM grid in qxp 12/24/09 9:45 AM Page 70
WEALTHMANAGEMENTFOCUS
TACKLINGWITHTALENTSHORTAGE Hecitedthemovetoallowforeignfirmstolistondomestic
Thedifficultyoffindingqualified,resourcefulChineserelation- exchanges,thelaunchofthenewNasdaq-styleChiNext
shipmanagers(CRMs)isoneofthegreatestobstaclestobuilding exchangeinShenzhenandthefactthatfundmanagerscan
upaprivatebankingpresenceinthecountry. nowgetalicenceforaroundUS$2milliontooperateinthe
LeeHsiao-yunhasspentthepast18monthssettingupthe country.
onshorebusinessofSGPrivateBank,establishingofficesin HesplitsChinaintotwomarkets,namelyoffshoreand
Shanghai,BeijingandGuangzhou. onshore.“ThedevelopmentofthelocalmarketinChinaiswhat
Shepointedoutthatof22foreignbankswithlicencestodo thegovernmentisputtingmoneyinto.Thatisgoingtocreate
businessinChina,“lessthansixhaveprivatebankingservices, wealthinlocalbusinesses,andlocalbusinesseswillhave
andoneofthemisSG.” moneyonshore.
Butshe,too,acknowledgedthedearthoftalentinthedomes- “ThatisgoingtocreatetheonshorebankingmarketandI
ticmarketplace,revealingthatChinawouldneednofewerthan thinkitisgoingtohappeninashortertimeperiodthananyone
7,000CRMsjusttocoveritscurrentpoolofwealthyhouseholds, expectsbecausethiswealthtendstogenerateveryquickly.”
whichBostonConsultingGrouprecentlyestimatedat418,000.
“Itisalmostimpossibletofindthismanyqualifiedindividuals LIKELYWINNERS
inthemarket,”shetoldtheforum.“Sohowarewegoingtogrow WylesWatersbelievesthewinnersinChinaaregoingtobethe
ourbusiness? domesticbanksthatadoptqualityservicesandpracticesand
“Humancapitalisaveryimportantinvestmentinanyorgani- cancross-matchbetweenlocalandinternationalstandards.
sation,especiallyinbanking.Sowehadtodesignaprivatebank- Healsocitesinternationalbanksthattakeadvantageoflist-
inguniversitywithinhouse,tryingtocultivateourownpeople ingonChina’sexchangessincetheiremployeeswillbecome
andresourcesinordertocatchupwiththegrowthinChina.” stakeholdersandtheywillbeconsideredlocal.
DBS’approachhasbeentofocusondealingwithbusiness “Chinaisamarketwithinitself,”hesaid.“Ithinkyouneed
owners,theso-calledSME(smallandmedium-sizedenterprise) totakeaclearChinafocusandworkouthowtomakeyour
segment,sothebanktendstolookinternallyformid-careerSME productsandservicesmeetthemarketandbebetterthanyour
bankerswhoaspiretobeprivatebankers. competitionontheground,notbetteroffshore.
“Ithinkthat[SME]isanimportantsegmentforprivatebank- “Asyougetthesmallerbanksandthesenewercompanies
ing,”saidLim.“YouneedthesepeoplewhocantalktotheSME developinginChina,youwillhavealotbettercorporategover-
owners,whounderstandthecultureandalsohavesomeexperi- nance,youwillhavealotbetterinvestmentopportunities.
enceintermsofcreditandlending. “Andthesethingsarenotgoingtohappenover20years.If
“CurrentlyinChinaweareveryrestrictedintermsofinvest- theyhappenedintheUSover30years,theyaregoingtohap-
mentproducts,soalotofproductsthatweoffertoprivatebank- peninChinaandbetwiceasbigin10years.Thingsaredevel-
ingclientsaresomehowcreditrelated,andweneedsomeone opingbuttheydon’tdevelopinastraightline,theydevelopina
withstronghandsinthatareatohelp.” reactivemanner.”
Leeagreed,admittingshetoohadbeenengagedin“creative Domesticplayersareevidentlyinthedrivingseat.Bankof
hiring”inChina.“Thetalentpoolforthetrueprivatebankerin Chinawasthefirsttolaunchprivatebankingservicesinits
Chinaisvery,veryshallow.SoIlookbeyondthatandlikewiseI homemarketin2007.Itwasfollowedbyanumberoflocal
successfullyconvertcorporatebankerstobeprivatebankersand rivals,althoughnoonehasestablishedadominantposition.
CRMs. LimpointsoutthatdomesticbankssuchasICBCalready
“WhenIdorecruitingIlookattheirhonestyandtheirintegri- haveabranchnetworkthatislargerthanthetotalofallthefor-
tyandIalsodoadiscreetcheckontheperson’sbackground, eignbanksputtogether.Thepotentialforprivatebankingbusi-
knowingtherecouldbealotofforgeduniversitydegrees. nessiftheyjustupgradetheirretailclientsonenotchishuge.
“Communicationsskillsareveryimportant.Andapartfrom “Mymoneyisonthelocalbanks,”statedWylesWaters.
IQ,EQ[emotionalquality]isalsoveryimportantwhentalkingto “Theseguysarefocused,theyaregrabbingnewbusiness,grab-
successfulentrepreneurs.” bingthetalentpoolandtheycanoperatewithinlocalinfra-
structure.
TRAININGTREND “Ibelievetheywillsetupopenarchitecturestructureswith
PanelistAndrewWylesWaters,aninvestmentbankerwhosetup privatebankingbrandsthattheybelievearerecognised
FirstCapitalPartners,saidhehaddetectedanincreaseinwealth enough,sotheywillhavelocalandoffshoreservicesthrough
advisersforthegeneralpublicinChina–asortof“poorman’spri- them.”
vatebanking”asheputit. Leepointedoutthatdomesticplayerstendedtospendmore
“Thatisthefirststageofprivatebankingatalowlevel,”he timebuildinguptheirfrontoffices,whileforeignbanks,
said.“Thisisevolvingandpeoplearegettingtrainedandjoining becauseofthegenerallystricterregulationstheyfaced,spent
associations.Ithinkthisisatrend.” moreoftheirresourcesbulkinguptheirmiddleandback
FirstCapitalPartnersstartedasanon-bankadvisoryfirmfor officestomitigateonshoreriskmanagementandcompliance.
localandinternationalcustomersbuthassubsequentlymade “Iguessthisisthedistinctivedifferencebetweenthelocal
investmentsinChinaandnowclaimstobethelargestissuerof banksandtheforeignbanks,”shesaid,predictingawarinthe
pre-paidcardsinthecountrywithmorethan24millionin38 marketplaceoverthenextfiveyears.“Whowillbethewinner
cities. onlytimewilltell.”
“Oneofthebeliefsthatwehaveisintheconsumermarketin WylesWatersconcluded:“Itisnotthatdifficulttoseewhere
Chinaandthatwealthwillbecreatedinternally,notbeheavily theregulationisgoinginChina,itisjustverydifficulttopre-
dependentonimports,”hetoldtheforum. dictwhenitwillcomein.Ithinkifyouunderstandthemarket
“Therearealotofthingshappeningthataregoingtoopenup andyouhaveseniormanagementontheground,thatiswhatis
regulationsandcreatebetterqualitystandardsforinvestments.” goingtomakeasuccess.”
70 DEC2009/JAN2010 ASIAMONEY
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