Four years on from its initial push into Thailand’s onshore wealth management space, Credit Suisse is now ready to enter “phase two” of its strategic plan for the high-priority market.
The bank will make a number of ‘significant enhancements’ to its platform in the coming months, according to Marcus Slöör, Credit Suisse’s market group head for Thailand and Vietnam, private banking.
Slöör was unable to provide details on the nature of those enhancements, but did disclose that the Swiss major was working on its private fund licence in Thailand, which brings with it the ability to provide discretionary portfolio management services.
That in itself would be an important next step for the business, which is arguably the flagship of Credit Suisse’s broader onshoring project in Southeast Asia and whose onshore Thailand clients already have access to the bank’s digital private banking platform.
“Especially since 2016, when we launched the onshore wealth management unit, we’ve seen strong growth, albeit from a low base, and a real increase in the quality of our relationships with Thai entrepreneurs,” Slöör told Asian Private Banker, pointing to a steady increase in average account sizes and headway the bank is making with semi-institutional onshore clients.
“‘Phase one’ for the onshore portion of the business was about bringing our Thai clients closer to the bank by giving them access to our international offering while being managed locally. Now, ‘phase two’ will see us invest further in our platform and capabilities to stay ahead of the game in this key strategic market.”
Growing but fragmented competition
Indeed, Credit Suisse faces stiffening competition in Thailand, spurred in large part by regulators’ moves to loosen restrictions on the types of products investors can access.
Local entities — essentially the private banking arms of larger domestic lenders, securities companies, and asset managers with an FIA or qualified investors — are expanding their shelves with international investments to meet rising demand for offshore diversification.
Foreign players too are slowly revealing their hands. Julius Baer’s high profile joint venture with Siam Commercial Bank pairs one of Switzerland’s largest wealth managers with Thailand’s oldest bank. LGT launched a wealth management outfit in Thailand in 2019 headed by a Thai private banking veteran from Morgan Stanley. DBS Private Bank last year unveiled a partnership with DBS Vickers (Thailand) and said it would double “wealth assets and RM headcount in Thailand by 2023”. And a handful of other global majors, while publicly shy about their Thailand agendas, have recently made significant yet-to-be-announced hires for the market.
“Competition is growing, but the reality is that the competitive landscape is fragmented in terms of individual players’ capabilities,” explained Edwin Tan, Credit Suisse’s head of wealth management Thailand and head of advisory and sales Thailand.
For instance, not every domestic wealth management player has a channel to access international investments. For those that do, the nature of that channel determines what can be done with that money. And even then, not every entity with a channel has the platform and product capabilities to capture the full spectrum of offshore investment opportunities, according to Tan.
Beyond product access
“What further differentiates Credit Suisse from the rest is that most of our competitors do not have the requisite advisory capabilities — they do not have the house view, the strategy, the ICs and RMs on-the-ground and properly trained to advise clients,” he continued.
“And it’s not just about providing access to the international equity and bond universe and the best of mutual funds because the majority of our business in Thailand comes from entrepreneurial clients who don’t merely look at plain-vanilla investments. So we need to be able to offer them sophisticated things, such as access to our strategic advisory team and special investment opportunities — all the way through to our investment banking colleagues.”
Tan said that the platform enhancements scheduled for the next six months would mean that Credit Suisse’s domestic Thai clients would soon have access to the same services and products the bank’s offshore clients enjoy. He also confirmed that the bank would launch a discretionary portfolio management service for Thai clients, once appropriately licensed.
At the same time, Credit Suisse continues to increase its RM and IC headcount in Bangkok, albeit at a slower rate than 18 months ago. Tan himself recently rejoined the Credit Suisse fold after a short-lived stint as SCB Julius Baer’s head of investment advisory and solutions, and earlier this year was appointed head of Credit Suisse’s onshore wealth management activities.
Education and development a priority
Slöör said it was important that the bank’s hiring and human resourcing activities were conducive to creating a “long-term sustainable business”.
“As we grow, there is a pressing need to continue to give more exposure and provide continuous learning for both our bankers and clients, many of which are more familiar with the local brokerage model,” Slöör explained, highlighting the bank’s “Grow Your Own” model, which is essentially a commitment by Credit Suisse to groom junior staff for relationship management roles and facilitate transfers between onshore and offshore businesses.
Accordingly, one of Tan’s immediate priorities has been equipping RMs and clients on fundamentals such as “asset allocation and strategic portfolio investments”, and less-familiar product areas where the bank is seeing increased demand in Thailand, such as private equity, private credit, and hedge funds.
“Sometimes, it is the case of clients not knowing what they don’t know,” continued Slöör. “The education piece is not about telling them ‘one and one equals two’. It’s more about providing our RMs with increased awareness and, more importantly, deepening their expertise on the full capabilities of the bank and how to tap into our infrastructure globally. And ultimately, it is about showing our clients the world of possibilities that their wealth can enjoy through the services that Credit Suisse has to offer.”
Meanwhile, Slöör said he had been “extremely heartened” by clients’ response during the coronavirus pandemic when asked how Credit Suisse ranked in terms of its service.
“My message to RMs during these challenging times was simply to ‘stay close to the clients’, to show them we care, and that we are providing them with the relevant information to make the investment decisions they want to make,” he said.
“And the fact that we’ve been able to provide seamless coverage from an advisory and execution perspective has been just amazing to me, because we had absolutely no disruption in Singapore nor in Bangkok.”