The growing number of independent asset management firms (IAMs) and multi-family offices (MFOs) in Singapore and Hong Kong provides a compelling case for VP Bank to continue to build out its offering to service this important segment.
And if the first few months of 2017 are anything to go by, all signs are positive that this is the right strategic decision in a market in which many of the bank’s competitors are finding conditions tough generally.
For example, VP Bank has added new relationship managers (RMs) in Singapore who are specialised on the intermediaries segment. Plus, it has seen a positive development in term of new AUM as well as profitability, explains Sylvain Gysler, head of intermediaries and multi-family offices for VP Bank in Asia.
“Overall, the restructuring and additional investments we did in 2016 are bearing fruits and we are on track to go beyond initial targets,” he adds.
This gives Gysler cause to be optimistic about the prospects for his business for the rest of the year.
Regardless of unpredictable external factors such as geopolitics and financial markets, which might have a serious impact on today’s valuations, there is a growing number of financial intermediaries and family offices in Asia.
At the same time, the consolidation of the private banking industry benefits firms like VP Bank, which he describes as “stable and focused”.
He has given himself three goals to help the firm make the most of the opportunity.
First, it aims to further grow its team of RMs to 10 specialists servicing intermediaries – excluding its dedicated investment advisory team and credit specialists. “This will make us one of the most dynamic players in the region,” says Gysler.
Secondly, VP Bank will continue to make significant investments in digitalisation.
“With our new information platform we are delighted to present a further innovation to our intermediary clients,” he says.
The new platform gives access to a range of services like detailed information on market developments, regular publications on economic issues, a knowledge base providing easy access to information on current tax and legal issues, and various forms and brochures assisting intermediaries.
“Moreover,” adds Gysler, “we are further investing in the bank’s sophisticated e-banking, giving smartphone access to trading capabilities as well as data-feeds to Intermediaries’ portfolio management system.”
The third objective is to capitalise on the bank’s stability. “In this volatile environment, where our competitors seem to have lost focus, our stakeholders are looking for stability which starts with staff retention while attracting the best talents,” explains Gysler. “This has been my aim since joining VP bank at the beginning of 2016 and now we are glad to bring it to the next level that I see as a key differentiation factor. Let’s call it, being the ‘employer of choice’.”
Keeping intermediary clients at the centre of all the bank’s decisions will continue to a critical success factor in the current environment.
Combined with a stable, nimble and lean organisation, this can help address concerns that Gysler says intermediaries seem to have more broadly about the alignment of the strategy and commitment to their own segment from their custodians.
“[IAMs and MFOs] want to partner with an organisation which is dedicated to grow its intermediaries platform over the long term, without relegating it as a second priority behind their own in-house bankers,” he explains.
“At VP Bank, the intermediaries business is part of our DNA,” he adds. “The bank’s founder, Guido Feger, was himself one of the most successful trustees in Liechtenstein, and the intermediaries business is a core competency of the bank.”
The bank’s reporting structure, which sees its Asian business answer directly to the local chief executive officer also ensures a better understanding of the clients’ needs, plus provides instant flexibility and support when needed.
This is coupled with what Gysler describes as a strong governance framework in place, to avoid any conflict of interests with clients of intermediaries. “Not only are we segmenting clients by AUM but we treat all partners on their own merit, without a rigid grid structure, but instead by taking a pragmatic business approach.”
Being able to offer tailor-made solutions to clients also gives the bank an edge over any competitors that try to standardise or institutionalise the offering to intermediaries, believes Gysler.
At the same time, each of the RMs servicing intermediaries has a dedicated assistant. “This is important at a time when some of our competitors have been freezing headcount in this segment or, even worse, downsizing,” he adds.
Sticking with a proven principle
It goes without saying demographic changes are bringing about a more diverse client base in Asia – and hence new challenges.
Yet for all the market upheaval, technological change, generational shift and reallocation of wealth, in Gysler’s view, the essence of the advisory relationship has hardly changed
“Regardless of whether a ‘baby boomer’ or ‘digital native’ is thinking about asset management or financial planning, the fundamental mechanisms remain the same,” he says. “They invest in what they know. Their number-one priority is to provide security for their family. Despite all announcements to the contrary, humans will not be replaced in the foreseeable future.”
As a result, instead of competing against machines, he believes the industry must consider their added value as a complement to the possibilities of the digital age.
“The goal is to skillfully combine digital platforms and personal advisory,” adds Gysler.