Jimmy Lee, head Asia Pacific and member of the executive board, Bank Julius Baer shares his views with Asian Private Banker in the ‘Final Word’, a ten-part series where the industry’s leaders share their thoughts and opinions on key issues around industry trends, business performance, investment solutions, regulations and compliance, and technology.
Industry trends | What is the state of Asia’s talent pool and did your firm pay significantly higher for new talent? What is your view on private banking talent development in Asia?
In general, we all know we have quite a limited talent pool. The clients are growing faster than the number of wealth management professionals in the market. Of course, some banks are paying more than others when they hire. Our payment practices are in line with the industry. There is a lot that we can do to further develop and strengthen the private banking talent pipeline in the industry. One example is the HKMA/PWMA Apprenticeship Programme, in which we actively participate.
Industry trends | How important is it for your business to make substantial inroads in China to ensure sustainability and growth over the next decade?
The Chinese economy is a very attractive market. As China is the second largest economy, demand for wealth services is growing rapidly. We can see a very strong demand for asset diversification in China. While focusing on organic growth, we will continue to look for strategic initiatives that match our criteria.
Investment Solutions | Though continued geopolitical uncertainty and volatility pose a challenge for DPM performance, will this ultimately prove to be a boon for the discretionary business, converting clients from trade to delegation? In these same market conditions, how critical will the alternatives business be for private banks in Asia moving forward?
Typically, uncertainty and volatility are friends of the DPM business. Having said that, we see multiple reasons for sustained growth in discretionary assets. Regulation in terms of risk rating and product suitability is changing the landscape of the business. Market access in certain assets and scale benefits that accrue to institutional-type long- term investing are trends that will make the DPM business more appealing to clients. While returns on profiles across asset classes have reduced the time and effort required to harvest, these returns have gone up, making a case for handing assets to professional investors. As wealth grows, the need to diversify is helping the discretionary business. As generational wealth transfers happen, it hastens the conversion to discretionary and professional asset management.
Investment Solutions | Ten years on from the GFC, how has your product shelf evolved and how has clients’ perception of structured products changed since then?
We look upon the evolution more in the sense of a holistic approach to wealth advice and management as against a product shelf change. On structured products, they — like any other solution — are an effective tool to have in the portfolio mix. The understanding, knowledge, and disclosure levels of the structures themselves have seen significant improvements since the GFC.
Technology | What is your view on robo-advisors and is your firm developing robo-capabilities of its own? Have you observed any robo-advisory developments that could materially disrupt the industry?
The goal of robotics, as we define it at Julius Baer, is to automate processes instead of having robo-advisors. Therefore, we use the term RPA — Robotics Process Automation. RPA is not just about reducing costs and improving processing time — it is about allowing employees to focus on complex tasks which no computer can do. In Asia, the RPA initiative kicked off earlier this year.
Meet 2018’s industry leaders in the full round up of of Asian Private Banker‘s the Final Word 2018.