From Europe to the UK, and now conquering Asia’s shores, HSBC Global Private Banking’s (HSBC GPB) Prism Advisory platform is transforming the way affluent clients manage their wealth, according to Stefan Lecher, who is seeing new account openings every week.
Launched in Asia last November, the hybrid advisory service was first introduced to clients in European locations in 2019 and the UK in 2020. Now, Prism is available to private banking clients in Singapore and private banking and eligible affluent clients in Hong Kong.
In a world where private banks strive to stay ahead amid the rise of digital offerings, Prism is “the first contractual advisory service that’s available to affluent clients in the region, and we have seen a steady rise in client assets in advisory mandates,” the Asia Pacific head of investments and wealth solutions (IWS) shared with Asian Private Banker.
“Europe is ahead of Asia right now on this front, but here in Asia, we are seeing strong traction to the extent that we are opening and funding one-to-two new Prism accounts per week on average,” he said.
Not sales driven
Powered by BlackRock’s Aladdin Wealth technology, Lecher refers to Prism as a platform not driven by “product sales.” Instead, it uses portfolio analytics to lure clients by helping them to make improved investment decisions.
“I think it’s fair to say that the concept of paying a fee for advice is gaining currency here in Asia across all wealth segments.”
Sophisticated clients with investable assets exceeding US$10 million are primarily interested in Prism’s detailed risk metrics. The affluent client segment, on the other hand, finds the scenario analysis feature particularly exciting because it allows them to factor in various scenario analyses in their portfolio.
“This feature provides a good entry point to understanding risk,” he said. “I’m not aware of any other big institutions that use the same platform [Aladdin] as their risk engine.”
It will show, for instance, if a client’s portfolio exceeds the desired equity range, experiences an increase in risk, and if there is a new investment opportunity worth considering. “If the portfolio deviates from the indicated asset allocation, Prism would then alert a client about the deviations digitally and trigger a follow-up through HSBC advisor.”
These are early days, but HSBC does have a data analytics engine to analyse user behaviour, Lecher pointed out. The team also relies on feedback from client discussions to enhance the level of personalisation in the insights and recommendations they share.
“We’re collecting all that information… And what we are seeing – that really captures most of [our clients’] interest – is the scenario analysis function. And that drives engagement,” he said.
“What we do is we reach out to our partners in Aladdin to mobilise the scenarios, and then we bring those insights back to our clients in a systematic way. We also look at the alerts our clients are most interested in and adapt and update as we go.”
“I’m surrounded by a skilled team […] We all work together seamlessly to cook and serve meals of the highest quality and nutrition.”
He added that HSBC’s fee-based advisory model is capturing a lot of interest. Clients can choose a pricing model that suits them best, for example, a hybrid fee structure or a flat fee structure where all transactions are included.
“We find that more sophisticated clients don’t really want to pay for each transaction and so they tend to opt for the flat fee structure,” he said. “But overall, I think it’s fair to say that the concept of paying a fee for advice is gaining currency here in Asia across all wealth segments, especially if the service helps them remain on track and sleep better as a result.”
Chef in the kitchen
The Prism offering is the latest launch from HSBC’s IWS division, where Lecher leads the team in Asia. In essence, he equates his role to that of overseeing a restaurant’s kitchen.
First, he sources all the investment ingredients HSBC uses by working with asset managers and capital markets providers to bring together the very best local and international, organic and specialty ingredients for customers.
Second, he designs the menus like a chef would in the kitchen. “And because we have different restaurants, for example, in mainland China or Hong Kong and for retail or private banking clients, the menus must be tailored.”
“One restaurant could serve a bento box; another could serve a full tasting menu. I also need to ensure the menus are fresh and seasonal for their markets.”
“I’m surrounded by a skilled team – spanning research, CIO, funds, DPM, alternatives, capital markets and insurance – we all work together seamlessly to cook and serve meals of the highest quality and nutrition,” he concluded.