Wealth Management in Asia: The New Gold Rush

Introduction
The opportunities
The threats
- Commoditisation
- Product selling
- Product vs. advisory
- Returns over planning
Important developments in Asia in 2009
Market activity 2008/9
The rise of the new wealth
So what changed?
Deregulation
The importance of fee income
Increasing customer sophistication and the chase for rate
How financial institutions reacted to the boom
Asians like to save
How consumers buy (and how banks sell to them)
Case study: Large commercial bank based in Asia
Case study: Retailer/manufacturer and distributor of investment products
Relationship vs. product
What is trust?
Sell vs. buy
Consequences of ‘buy’: why are customers disloyal?
Changes in client behaviour since the crisis
What is the role of the Wealth Manager?
After the crisis:
After the bust - preparing the relationship managers
Case study: Communications skills 1
Back to basics on investments
Case study: Sales processes
Structuring teams to deliver relationships rather than product
Opportunity cost of not investing in a relationship
The perfect RM
Conclusion

Chapter 04: The competitiveness of Singapore, Hong Kong and Shanghai as international centres for private banking

By Justin Ong, Partner, Asia Pacific Private Banking Leader, and Kai Wing Shiu, Senior Manager, PricewaterhouseCoopers

Overview
Singapore
- Economic development
- Client markets
- Singapore as a regional and global private banking centre
Hong Kong
- Economic development
- Client markets
- Gateway to China
- Gateway from China
- Hong Kong as an international private banking centre
Shanghai
- Economic development
- Client markets
- Development of Shanghai as a global financial centre
Can Asia support so many international finance centres for private banking?
Unique value propositions
Conclusion

Chapter 05: Product innovation in post-crisis Asia

By Gregory Yu, Head of Equity Derivatives Structuring, Asia, JP Morgan

Structured products before and after the financial tsunami
The recovery of structured products: U shaped? V shaped? W shaped?
The key elements that investors will look at in structured products
ELN variations: back to the comfort zone
First-to-Market certificates: Alternatives to ETFs
JPMorgan Almea Segregated Portfolio set-up
Managed accounts: returning to the arms of hedge funds
Conclusions

Special focus section: China

Chapter 06: Navigating a path through China’s regulatory maze – a practical guide

By David Olsson et al, Mallesons Stephen Jaques

Introduction
The domestic wealth management sector
Commercial banks
- Issuing wealth management products
- Providing investment consultancy services (private banking business)
Trust companies
Fund management companies
- Public offering of securities investment funds
- Providing asset management services
Securities companies
- Specific asset management service provided for a single client
- Collective asset management plans provided for identified groups of clients
- Asset management services for specific purposes
Insurance companies
Offshore investment (QDII)
Opportunities
Challenges
- Legal uncertainties
- Overlap of scope of regulatory bodies
- Distribution
Looking forward
More innovative financial instruments will be available
Private equity will be popular with a steady growth rate
Competition will be fierce
Market segmentation

Chapter 07: Wealth management in China – opportunity, fact and fiction

By Brian Metcalfe, Ph.D, Associate Professor, Business School, Brock University, Ontario, Canada

Introduction
The wealth management market
The Hurun Rich List
- Characteristics of Hurun Rich List members
Geographic distribution
Wealthy Chinese households by urban tier
Behaviour of wealthy households
Types of wealth management clients
Asset allocation across segments
Players in the wealth management segment
Foreign banks
Locally incorporated foreign banks in China
Conclusion

Chapter 08: Institutional and corporate wealth development in Asia

By Peter Kerger, Managing Director, Head of DB Advisors Asia/Pacific, Deutsche Bank Group

Asian wealth after the crisis – an unprecedented opportunity
Accumulating wealth
Growing national reserves
Lasting impact of the financial crisis
Wealth preserved
Liberalisation: work in progress
Foreign entrants spur international investment cultures
Implications for institutional wealth management
Islamic investing
Closing the gap

Chapter 09: Development and prospects for philanthropy and wealth transfer in Asia

By Cynthia D’Anjou-Brown, HSBC Private Bank

Introduction
Influence of religion, philosophy, and culture
Regulatory and tax incentives
Managing a burgeoning charity sector
Private or public responsibility for meeting universal needs
Differences in giving practices
Viewpoint on beneficiaries
Growth of philanthropy
More wealthy, self-made individuals with the means to give
Downturn is likely to dampen philanthropic interest
Profile of philanthropists is changing
The new social economy
Corporate versus private family philanthropy
Philanthropy as part of family governance
Opportunities
What’s ahead

Chapter 10: Managing human capital in Asia’s wealth management sector

By John Koh, Managing Director, WMRC Recruitment

The current situation
Current opportunities
HR strategies to employ
Hiring strategies
Talent development
Remuneration structures
Performance monitoring

List of Tables and Figures

Table 4.1: Competitiveness of international financial centres for private banking
Table 5.1: Sample Terms for Super ELN
Table 5.2: JPMorgan FMCs - LED TV theme basket constituents
Table 6.1: Commercial banks providing private banking services in China
Table 7.1: Hurun Rich List Top 10, 2009
Table 7.2: Peer ranking of foreign banks active in private banking
Table 7.3: Locally incorporated foreign banks in China
Table 9.1: Donations to sample public campaigns

Figure 1.1: How much do you need to fulfil your life ambition?
Figure 1.2: Anatomy of a financial crisis
Figure 1.3: Wealth no longer whispers, but it doesn’t shout either
Figure 1.4: Financial self-confidence in Asia
Figure 2.1: Returns by asset class, 2008 (%)
Figure 3.1: Typical client planning flow is linear
Figure 3.2: … but clients’ needs are not linear
Figure 3.3: The trusted advisor model – key attributes
Figure 3.4: Sell vs buy products
Figure 3.5: Market capitalisation by region, 1990–2008 (US$trn)
Figure 4.1: Most successful financial centres to 2014
Figure 5.1: JPMorgan LED TV theme basket vs. JPMortan LCD TV theme basket
Figure 5.2: Historical performance of CISDM-CTA Assewt Weighted Index vs market indices
Figure 5.3: Overview of a principal protected note with exposure to a CTA
Figure 6.1: China wealth management market by participant share, 2008
Figure 7.1: The rise of millionaires in China, 2002–2012 (p)
Figure 7.2: Population and wealth distribution of HNWIs in China, 2008
Figure 7.3: Location of wealthy households in the Top 10 cities
Figure 7.4: Risk preference across segments
Figure 7.5: Distribution of investable assets
Figure 7.6: Foreign bank interest in private banking is high
Figure 8.1: Regional asset managers’ institutional assets by type, 2008 (%)
Figure 8.2: APAC population growth, 207–2009 (m)
Figure 8.3: Asian sovereign wealth funds by value, 2006–2012 (e)
Figure 8.4: Asian FX reserves, 2009 (US$bn)
Figure 8.5: Market capitalisations, A-shares, B-shares, H-shares (US$bn)
Figure 8.6 A-share market float by industry, 2009
Figure 9.1: Number of registered charities in Asia, 2000–08
Figure 9.2: Growth in approved charitable donations, 2000–08 (US$m)
Figure 9.3: The new social economy

Reports

Wealth Management in Asia: The New Gold Rush

Table of Contents

Introduction

Chapter 01: The future of wealth – and just what exactly it is looking for

Chapter 02: Shaping a new Asian wealth management paradigm

Chapter 03: Wealth managers - building relationships in Asia