Awards for Distinction 2013 – Discretionary Portfolio Services


AFD2013_Best Private Bank - Discretionary Portfolio Services

BNP Paribas Wealth Management

Stephanie Lair

Stephanie Lair
Head of Investment Services, Asia Pacific
BNP Paribas Wealth Management

A compelling confirmation of trust between a client and a bank, some consider discretionary portfolio management the Holy Grail of private banking. For the more sceptical, it is a business model that offers revenue visibility in a fickle market. Hence, although it has yet to find wide acceptance in Asia, discretionary portfolio management is an area that many private banks in the region are focusing considerable time and resources developing.

Of these banks, BNP Paribas has distinguished itself on the basis of team size, AUM, ability to customise global solutions to Asian preferences and performance. Whilst industry estimates peg average AUM in Asian discretionary accounts at 4%, BNP Paribas Wealth Management has bettered that with 6%. Asian Private Banker attributes this outperformance to the quality of the bank’s discretionary services as well as its long history of service to clients.

That said, the bank has also demonstrated, via several case studies, an ability to take an informed view on the markets and implement that view consistently in discretionary portfolios. Confirming that when it comes to discretionary accounts, clients expect advisors to be completely aligned with their own interests, BNP Paribas Wealth Management outbid five other private banks in Hong Kong last year by differentiating its pitch and arguing for a higher allocation to equity than competitors. The client’s decision to invest with BNP Paribas Wealth Management, and thus allocate more aggressively to equities, led to a stronger performance than they would have had otherwise.

Equally important in gaining and maintaining the trust of clients, the firm “does not treat its discretionary portfolio management offering as a distribution arm for the wealth management business,” in the words of Garth Bregman, Head of Portfolio Management, Asia. Unlike at some banks, where discretionary mandates had a surprisingly high percentage of in-house funds, BNP Paribas Wealth Management was able to demonstrate that it operates on an open architecture platform.

Proving its ability to adapt to Asian investor preferences, the bank has introduced a new solution – the Individual Mandate – for clients who want to determine the initial neutral asset allocation which the client can change at any point during the life of the discretionary mandate with a single instruction. Individual Mandates have allowed the bank to win mandates from clients who have not used discretionary services before.
All of these factors, coupled with its overarching commitment to client interests, make BNP Paribas Wealth Management the deserved winner of the award for Best Private Bank – Discretionary Portfolio Services.