Lok Yim, head of wealth management, APAC & chief country officer, Hong Kong, Deutsche Bank shares with Asian Private Banker his thoughts on the year that has been, and the upcoming year in the ‘Final Word’. This is 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?
We are competitive payers and Deutsche Bank Wealth Management global management has reiterated that we will remain competitive. Having said that, are we the highest payer in the market? No. Does that matter? No.
Why? What happened in our most challenging time has told me when it comes to talent, compensation is important but is never the most important factor. We are looking for talents who are committed to wealth management and are interested to join us on the exciting growth journey. These people are looking for a bank which provides them ongoing training, the best infrastructure, and the most comprehensive product shelf.
This December, DB WM will provide every client-facing colleague on a global level training by a professional consultant in order to enhance competencies in relationship management. The bank is also spending €65 million in the next three years to roll out digital tools aimed to offload admin work for RMs and shorten account opening times for clients. Further, we’re ready to innovate with tailored solutions and our connection to our corporate and investment banking colleagues has never been stronger — we are, in fact, having a record year in the number of transactions WM has done with global credit trading. I can’t see a reason why a committed private banker would not want to join a bank like us.
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?
In the volatile market situation, clients in general turned more cautious. They are concerned about any further downside risks in the financial markets.
However, some of our DPM strategies still receive inflows because of clients’ trust in our capability to protect their portfolios in the face of market volatility. Risk management is key in this environment and it supports our campaign: ‘stay invested but hedge’.
In the current market, clients would prefer delegation in our more actively managed DPM mandates. Besides, they also rely on our capability to invest in markets outside of the Asia region as they are less familiar with them. In this market environment, the alternatives business is getting more important for private banks in Asia because of the lower trading volumes in traditional product offerings.
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?
In the last ten years, the fundamental change is that there has been a move towards a more advisory nature. When you look at clients ten years ago, they were putting on trades and transactions which were, in some ways, very market dependent.
Clients look at a lot more downside protection now than they did ten years ago. Hence we are talking more about downside protection and hedging. Our theme has become ensuring clients have exposure to the upside of the market while they do not necessarily suffer the same amount of downside than they did in the past.
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?
My principle is: before going to the fancy stuff, don’t ignore the core platform and never forget there’s only one chance to impress new clients. I’m proud to share that we have transformed our account opening process and we can now onboard clients much faster. This helps to support our growth and, more importantly, helps us to make the best first experience for clients.
With our ambitious hiring initiative, the stakes are high for us in Asia. Once we can onboard all those clients brought to us by relationship managers, our ability to push our growth agenda becomes much easier.
In the next phase, we’re looking at integrating AI and client screening, and streamlining and automating the information-gathering process for clients and prospects. The account opening process is, indeed, the core to our strategic revamp to grow clientele and revenues. We aim to make the efficient account opening process our key differentiator.
Next year, we’ll begin to address the other parts of the overall process. For example, e-signatures, providing investment ideas and house views, and trade execution.
Meet 2018’s industry leaders in the full round up of of Asian Private Banker‘s the Final Word 2018.