VIEW FROM ASIA-P A CIFIC
By Nicholas Moody
Editor, CampdenFB, Campden Wealth
This abuse of trust and
‘product-pushing culture’ was exactly what emerged over a decade ago in the northern hemisphere following the global financial crisis. Then wealthy clients were given poor advice, advised to remain in poor- performing assets, and in the worst cases locked into investments they couldn’t exit during the credit crunch. Reactions to this abuse of
trust differed, some clients took umbrage and sued their banks. Other clients struck out on their own, leading to a noticeable rise in family offices and private investment offices. In 2008, estimates of the number of
AUSTRALIA’S BANKING TRUST CRISIS A SPUR TO NEW FAMILY OFFICES?
A 8
ustralia’s Royal Banking Commission has turned up disturbing practices in the way its financial services industry abuses the trust of its clients. Are there parallels with the haemorrhage in trust suffered in the northern hemisphere after the global financial crisis? And could it lead to a jump in new family offices?
We’re in the midst of the commission’s investigation into
whether any of Australia’s financial service entities have engaged in misconduct and some of the findings have been shocking. The country’s largest bank, Commonwealth Bank of Australia, confessed its financial advisers were charging fees to dead people—in one case for more than a decade. Westpac admitted it paid bonuses to a financial adviser it knew was churning clients into high- fee investments. Then, on 20 separate occasions, AMP misled Australia’s corporate regulator over charging “fees for no service” to clients of its financial advice business.
CAMPDENFB.COM
single family offices in the UK stood in their several hundreds, almost a decade later its ranks had jumped 40%. In 2017, Campden Research estimated there were about 5,300 single family offices globally. Could we now begin to witness a surge in
the number of family offices across Australia, tipped by this loss of trust in Australia’s largest financial institutions among wealthy families? It is difficult to predict at this early stage, but the post-global financial crisis experience in other parts of the world supports this notion. There are several other reasons to think
the number of family offices will surge too. The first is that banks are getting out of the wealth management business—Australia New Zealand (ANZ) Bank sold its division last year and UBS divested its unit to Crestone Wealth Management. The second is the growing wealth levels in
Australia. The number of ultra-wealthy people in Australia rose by 9% in 2017, bringing the population to 1,260, according to Knight Frank research. Over the next five years, it is projected to increase by 37%. Many of these will be local, with a significant number of foreign families also establishing an Australian presence, according to industry sources. All this points to more families taking
control back from banks and the ranks of family offices swelling Down Under.
ISSUE 73 | 2018
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88