Among Chinese wealth management (WM) companies, Guotai Junan (GTJA) Securities has vowed to be the pioneer in the external asset management (EAM) business where it sees “high potentials and anticipated growth” in Asia.
“The EAM business has been dominated by key international private banking (PB) and WM players,” Joseph Chan, head of EAM business, WM at GTJA Securities told Asian Private Banker. “Further, currently there is no formal and structured EAM business function set-up amongst the Chinese PBs/WMs in Hong Kong to compete with international players in the EAM business.”
Chan believes that the end clients of quite a number of EAMs, especially those newly formed ones, might not be pleased with the services provided by PBs, due to their comparatively smaller investible assets. “And GTJA is so keen to lure them onto our book,” Chan said.
Gaining market share with competitive edge
In March this year, Chan joined GTJA from Bank of Singapore and started to build the EAM business in the Chinese wealth manager from scratch. The EAM business was officially launched in early June.
As of today, GTJA has over five EAM partners who have been onboarded while another ten are in the onboarding pipeline. Chan expects at least 20 EAMs to be onboarded with GTJA by end 2020 and another 50 in 2021.
“The senior management of GTJA WM has demonstrated strong commitment to the development of the EAM business,” he asserted. “As a Chinese WM company with a long history and good reputation in Hong Kong, I do believe GTJA should be able to gain market share within the EAM sector, especially when you consider that quite a number of Chinese-background asset management companies or family offices — acting for their mainland Chinese investors — have been so aggressive in penetrating the EAM sector and expanding their footprints in both Hong Kong and Singapore.”
According to Chan, what makes GTJA attractive to EAMs is its “efficient and agile” client onboarding process, due to its non-banking nature. Other plus points are the flexible fee sharing model and the lack of a minimum AUM threshold, Chan said.
In addition, the firm is working on remote onboarding for mainland China end-clients during the COVID-19 pandemic and expects to officially launch this new service in 3Q20.
Data feed solutions to boost efficiency
In addition to proactively acquiring EAM clients, the digital transformation of the business is of crucial importance, Chan said. Providing EAMs with data feed solutions is on his ‘wish list’ to enhance GTJA’s competitiveness.
Data feed solutions include: accessing underlying client holdings and mark to market values as well as purchasing power of the EAM managed accounts on a real time basis (view only); aggregating holdings across client portfolios for analysis and investment decisions; directing access to GTJA’s product platform on sourcing and pricing of OTC products; single logon for EAM managed accounts; and online trading for EAM for most of the products.
“In offering data feed solutions to EAMs,” Chan explained, “our aim is to enhance our competitiveness, create a better EAM client experience and improve front-office efficiency by allowing EAMs, ultimately, to self-serve.”
