20 July 2021 |

Pandemic drives clients into wealth planning: Union Bank of the Philippines

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The private banking arm of the Union Bank of the Philippines (commonly known as ”UnionBank”) has been targeting the wealth planning needs of the wealthy families in the country, as the bank has seen a surge of interest since the pandemic.

Established in 2019 in alliance with Lombard Odier, UnionBank Private Bank incorporates its local expertise with the Swiss bank’s private banking know-how.

“Last year, our AUM reached PHP 37 billion and AUM in 1Q21 almost hit PHP 40 billion. Our target for the whole of 2021 is PHP 50 billion and I am happy to share that we are already at 80% of that number,” Atty. Arlene Joan T. Agustin, senior vice president and private banking group head of the UnionBank, shared with Asian Private Banker.

Atty. Arlene Joan T. Agustin, UnionBank

“A lot of investors are really keen on keeping their liquidity and investments during the pandemic. Since not much of their money or cash is flowing into their businesses, they remain invested, until the pandemic gets better and more flows go into their business.”

One of the key segments that drive business growth is wealth planning, she pointed out. “We did a market study and found that investors have become keener on ‘taking care of their wealth’.”

Wake up call for wealth planning
The pandemic has increased awareness of wealth planning, she explained. “When the pandemic hit, families realised how important it is to keep their wealth safe and ensure that wealth will be passed on to the next generation.”

Although UnionBank Private Bank has been helping clients with their wealth planning needs since 2019, Agustin explained that more clients than before are recognising the need for wealth planning and asking questions.

“Questions we get from clients include whether families should stay in the Philippines or move abroad; whether some of the wealth should be moved offshore, such as in the US or Singapore,” she said.

“Many private banking practitioners are experiencing the same thing. When I talk to my colleagues, a lot of their clients are into advisory and family services on wealth planning, estate planning, tax efficiency, and tax management.”

She noted clients nowadays are well aware of the continuing risk and the damage that the pandemic has brought. “That kind of awareness has translated into more investments, more diversification, so we were able to do a lot of valuable things for our clients,” she said.

UnionBank offers standard investment products and vehicles that are customisable to cater to clients’ profiles based on different requirements and risk appetites. The bank has an in-house legal and family services team to address wealth management concerns.

“In general, most clients are interested in trust structures, but our bank strives to offer a bespoke approach to wealth planning and management,” Agustin explained.

The Philippines government has just extended its tax amnesty for another two years. “[The amnesty] will now expire in June 2023. That gives clients more time to settle their estate without incurring any penalties,” she said.

Next-gen programme
The bank and its strategic partner Lombard Odier have been working on a next-generation programme — NextGen Academy — to educate the next-gen in the Philippines.

“For the academy, we have a curriculum, experts and professionals and we put this into a multi-day session. The people who participated are mainly the second generation of our clients, with some of them potential clients.”

Agustin said the NextGen Academy aims to better prepare the next-gen to take over their family business, which the curriculum will teach from basic investment concepts to leaderships to actual case studies.

“The programme has allowed the next generation not only to build up their skills, but also to develop a network of friends and business partners.”

“More noteworthy is that when we talk to the next generation, they attest to us that the programme has helped them to build confidence,” she asserted. “And to us, that’s important because we are able to achieve the goals of preparing the second generation to maintain the wealth.”