Broadening the scope of wealth management to stay competitive
The formerly conservative wealth management space now has to be a broad church, be it by teaming up with institutional banks, offering family office services, or digital solutions
No private bank can afford to stay still as market trends evolve. Ultimately, key ingredients of success are tapping into competitive strengths and bringing these attributes to the table for a discerning client base.
Lawrence Lua, deputy head of DBS Private Bank, remains upbeat about his bank's wealth management push into 2019. Speaking exclusively to The Asset, Lua said the recent announcement of wealth industry veteran Rudiger von Wedel as head of international at DBS Private Bank, who will report into Lua, flagged the lender's intention to keep up recent business impetus.
The appointment of Dubai-based von Wedel releases DBS' Rob Ioannou to look at the entire wealth proposition of the bank where he is expected to drive the family office offering, in addition to calibrating and expanding the bank's wealth planning, insurance solutions and EAM business. DBS sees a family office as an integral part of its value proposition which has acute synergies with Asian corporates, a great many of whom are family owned and operated.
"We streamline our business into three main regions – Joseph Poon runs the whole Southeast Asia piece from Singapore, Jun Junuar Tjandra is responsible for North Asia based out of Hong Kong, and now we have Rudiger von Wedel in Dubai who will run the international business," Lua says.
The bank's London wealth unit managed by Muriel Simon is also showing prominently on the radar. Even with considerable uncertainties swirling around the UK economy due to Brexit, DBS' ultra-wealthy clients are still investing in prime UK commercial property, according to Lua.
The senior management changes DBS announced last month will also see Tan Su Shan, who currently heads DBS' consumer banking and wealth management group, take over as head of the bank's institutional banking division.
Based on her significant understanding of the wealth management industry, Tan, who has enjoyed great success in leading and building the wealth division together with Lua, is expected to increase the business conduits between the private bank and institutional banking – therefore reinforcing DBS' 'one bank' offering and opening up additional revenue channels for the wealth division.
The ambitious bank had targeted adding headcount of client facing bankers in the growing wealth management unit by 20% this year, and that figure was breached with ease, according to Lua.
"DBS is by nature very careful and prudent in the way we hire. We hire people who are the right fit and share our culture. We don't believe in outbidding on salary packages," said Lua.
"We also don't believe in chasing titles. Notwithstanding, we've managed to exceed our hiring targets; we have grown our front office by more than 30% to date this year across Hong Kong, Dubai and here in Singapore, and have also beefed up our London team," Lua adds.
On digging down into the ANZ acquisition and what it meant for DBS' private banking space, he said he had been pleasantly surprised and had benefitted by adding a significant amount of assets under management (AUM).
"The quality of the AUM was strong, and we were able to distribute the assets across our wealth management business – assets went into the Private Bank (S$5 million threshold), as well as Treasures Private Client (S$1.5 million threshold) and Treasures (S$350,000 threshold)," says Lua.
On whether there had been any resistance to the takeover by DBS, Lua said they were able to retain most of the ultra-high net worth clients. "It was a smooth transition and many of them welcomed the change as they could do a lot more with us now," he says.
"We did lose a small portion because of our stricter KYC underwriting process. But it was a small number, and we managed to retain the majority," stressed Lua.
The threshold for ultra-high net worth clients to commence a relationship with DBS Private Bank is at S$5 million (approximately US$3.5 million).
"We don't expect clients to give us 100% of their wealth – while we would love that, it's only natural that they will diversify their service providers," said Lua.
When it comes to the Singaporean lender's product and services platform, the seasoned private banker is confident, based on detailed feedback and surveys from clients, that the wealth offerings the bank provides can match practically everything the global private banks offer.
"I would avoid using the word 'better'; that's something only clients can judge," says Lua.
"From old wealth to retirees, to businessmen and next-gen wealth, I think we have the platform to cater to everyone's needs," he adds.
Sometimes referred to as the digital bank of Singapore, the private bank at DBS has also immersed financial technology into its services.
According to Lua, it is not only the next generation of wealthy clients who are using the bank's digital wealth management platform, DBS iWealth.
"People of all ages love these omni-channels," Lua says of his bank's highly publicized use of technology tools.
"Our digital engagement score is very high, and it frees up the relationship manager to do what we call the higher-value services and have deeper client conversations," he adds.
When it comes to managing the booming wealth emanating from China, Lua and DBS are happy to play the long game.
The Singaporean lender has a well-established corporate, institutional and consumer business in the country; as yet they do not have plans to launch a private banking business there.
"What we want to do is to take baby steps; we may then reinforce our Treasures offering and see where it takes us to," Lua says.
"We're still optimistic based on the sheer size of the population. Even if 1% does business with you, it's a lot of people doing business with you, it's very big," Lua concludes.
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6 Dec 2018