Michael Blake, CEO wealth management Asia, UBP shares his views with Asian Private Banker in ‘The Final Word’, a year in review by the region’s private banking leaders as they share their thoughts and opinions on key issues around industry trends, business performance, investments, regulations, and technology.
Industry Trends | In what ways has the COVID-19 pandemic irrevocably changed the private banking industry and your own bank’s approach to operations and service?
We have become more digital in terms of how we work with clients and across teams. This is here to stay. However, in the past, the digitalisation debate was often presented as a zero-sum game between the competing models of robo-advisory and high touch relationship management. COVID-19 has shown that digitalisation isn’t just about building “low-touch” client systems, but is also about ensuring strong IT resilience to support higher-touch relationship management, which UHNW clients rightly expect.
Industry Trends | Few can deny the importance of Asia’s onshore wealth markets — in terms of asset pools and the need for wealth management from increasingly sophisticated domestic investors. What opportunities do these markets bring to your business, and to what extent will ‘onshoring’ shape your strategic agenda?
International wealth management remains our core proposition: we see increasing flows to international financial centres, particularly Hong Kong and Singapore, supported by the growth of family offices in the region and the continued internationalisation of regional wealth.
At the same time, we retain an open mind about domestic partnership opportunities. Local client proximity combined with international investment expertise is a winning combination on paper. The question is how best – and with whom – to bring it to life.
Business Performance | NNA gathering and account opening have proven challenging in a pandemic-affected world. If we continue to experience lockdowns and travel restrictions in 2021, how can private banking businesses adapt?
Three trends in onboarding have supported strong NNM inflows in 2020. First, a shift in prospecting to focus on the domestic markets of Hong Kong and Singapore, supported by the continued growth in family offices there. Second, a renewed focus on External Asset Management, which is leading to significant new client relationships. Finally, we have made some carefully calibrated adjustments to our onboarding processes, to ensure that we can continue to serve clients during the pandemic.
Investments | From a portfolio perspective, how important will (a) Chinese assets and (b) alternative investments be for delivering clients’ objectives over the next five years?
Near term, China’s early emergence from COVID-19 will continue to stimulate investment inflows in both equities and fixed income. Longer term, the themes articulated in China’s Five Year Plan — a pivot to domestic demand, to high-end, intelligent and green production, to modernisation through technology — continue to lay the foundations for a sustainable growth trajectory, which will become increasingly attractive to international investors.
Client demand for alternative investments continues to increase as a means of diversification and as part of the search for yield. When the UBP direct investment proposition was launched in 2015, most investments were focused on yield-enhancing opportunities. We have now distributed approximately US$2 billion of private market investments and are constantly broadening our offering. Additions to the proposition in 2020 include: growth equity, pre-IPO, private equity and mezzanine private debt, with tenors ranging from 1 quarter to 10 years.
Investments | What important steps did your bank take to drive the sustainable investing agenda and to increase access to sustainable investing opportunities in 2020?
In 2020, we have continued to broaden our sustainability agenda, both by strengthening our impact investing proposition and by launching several internal CSR initiatives. In Asia, we have launched a new emerging equity impact strategy to complement the existing global impact equity strategy and have a full agenda of initiatives for 2021 to ensure that we continue to build on this momentum.
Regulations | Both Singapore and Hong Kong are placing a strong emphasis on cultivating a competitive and supportive environment for family offices. What further initiatives should each/either regulator undertake to nurture the development of a family office-supportive ecosystem?
The attributes that make Singapore and Hong Kong attractive as international financial centres also make them attractive as family office jurisdictions. The priority now is to build on this strong foundation by developing the legal, tax and wealth structuring sectors, encouraging centres of expertise on family governance and family offices and supporting the emergence of family office networks across the region.
Meet 2020’s industry leaders in the full round up of of Asian Private Banker‘s The Final Word 2020.
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