Vincent Chui, head of Morgan Stanley Private Wealth Management Asia 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, investments, regulations, and technology in 2021, as well as providing their predictions for 2022.
Given the majority of Asian wealth is located onshore, how should international private banks best target and differentiate themselves in these markets? For domestic regional private banks, what is the most effective strategy for competing with international players?
Onshore and offshore private banking present two very different sets of services and products for the same segment of UHNW and HNW clients of international private banks. There is definitely synergy between these two sets of businesses, particularly in terms of client referral, but client motivations and expectations differ between the two.
Generally speaking, offshore private banking focuses on global asset diversification, wealth planning, capital markets and access to sophisticated products and global connectivity. Onshore private banking provides a much larger range of local products which could involve both simple and sophisticated banking needs. Because of the changing global and regional political, economic and health challenges, there remains a strong secular growth opportunity for offshore private banking, even though the majority of wealth will always be onshore.
What will be the key investment themes that shape both global markets and those in the region in 2022 and how is that feeding into how you advise clients?
Sustainable investing will accelerate as the core investment approach by asset owners in Asia outside Japan and Australia. Globally, sustainable assets have reached US$35 trillion, accounting for a third of global AUM and dominated by assets based in the US, Europe and Japan. It may grow to US$53 trillion by 2025.
Investors should focus on companies for which ESG creates new opportunities for topline growth, reduces regulatory and public policy risks and aligns with COP26 goals.
Sustainability is higher up the agenda for investors than ever, with last year’s United Nations COP26 event underscoring the scale of effort needed to achieve global net zero emissions by the middle of this century. How are you helping your clients to remove ESG risk from their portfolios and embrace sustainability in their investment strategy?
Firstly, we must understand a client’s ESG goals. Once that is done, a combination of approaches ranging from restriction screening, ESG integration, thematic/impact focus and issuer engagement, should help clients build a robust ESG process.
Sourcing talent in the region’s private bank industry is becoming tougher than ever, pushing up hiring costs across the region. How can private banks ensure they have adequate access to the talented relationship managers and other front-line staff over the coming years? What is the key to attracting the right candidates?
The core of UHNW private banking always lies with the relationship with clients. RMs hold the key to such relationships whilst giving free rein to their respective firm’s core competencies to deliver excellence. We focus on RMs from top-tier firms who have established and strong client relationships, but who will benefit from our robust integrated platform to fully monetise such relationships and provide holistic services to their key clients, across the spectrum of individual, family and business needs.
Through such new RMs, we are eager to expand and deepen the client reach of Morgan Stanley in Asia, particularly in the Greater China region, growing our client franchise as well as our institutional securities and wealth management businesses.
Meet 2021’s industry leaders in the full round up of of Asian Private Banker‘s The Final Word 2021.