Shortage of wealth managers for Asia's rich in S'pore, HK

Cash-rich clients flock to 2 cities, but industry faces talent crunch

By Yasmine Yahya, The Straits Times, 20 Sep 2012

RICH people from across the region are flocking to Singapore and Hong Kong to have their cash managed, but experienced wealth managers are in short supply.

The talent squeeze is so serious that financial firms are having trouble dealing with the clients who come through the door.

The problem reflects the trend of Asia's emergence as a destination in itself for the wealthy.

While Switzerland is still the world's largest offshore wealth centre, Singapore and Hong Kong are gaining ground.

"The centres offer relatively stable currencies and political environments, favourable tax policies, transparent regulatory and legal systems, and well-developed capital markets," said a report by RBC Wealth Management and consultancy Capgemini.

Mr Barend Janssens, the emerging markets head at RBC, said that much of the wealth pouring into Singapore and Hong Kong is coming from Asians themselves.

"Many people think that the growth of the wealth management business here is mainly due to a migration of wealth from Europe to Asia but in fact, wealth management is growing because Asian clients are increasing their wealth."

The Asia-Pacific is now home to the highest number of wealthy individuals in the world - 3.37 million people in the region hold investable assets of at least US$1 million (S$1.23 million), excluding their homes, the report said.

However, the scarcity of skilled talent is the most critical challenge for wealth management firms in the region, it said.

"The shortage of talent constrains firms from effectively serving an increasing number of clients, potentially leaving (high net worth individuals) unserved or under-served," it noted.

Mr Anuj Khanna, chief executive of Swiss private bank Pictet & Cie Asia, also feels the effects of the shortage. He said that the talent needed to support the growth of the industry extends beyond relationship managers.

He pointed to a need for people proficient in research, managing portfolios, evaluating investments across global markets and speciality areas such as foreign exchange.

"A wider lack of talent in these areas means not all banks can offer this to clients," he said.

Other challenges facing Singapore and Hong Kong wealth managers include dealing with the cost of regulatory compliance, offering more attractive investment products, raising service quality to meet global industry standards and adapting to increasing client sophistication, the RBC and Capgemini report said.

It also noted that wealthy Asian investors are increasingly interested in alternative investments and "investments of passion" such as art, jewellery and luxury collectibles like cars.

Art auction revenues rose 22 per cent last year in Singapore, noted Mr Janssens.

"The female population is also becoming more prominent in what used to be staunchly male areas, like automotive investment."

For example, women bought nearly 30 per cent of the 300 Porsches sold in Singapore in the first half of the year, and account for one in three of Maseratis and one in five of Ferraris sold in China.