Wealth Solutions & Wealth Planning
AAM Advisory’s Ian Black on the Art of Devising Holistic, Relevant Solutions for Private Clients in Asia
Ian Black of AAM Advisory
Apr 26, 2021
Ian Black is Director of Global Wealth Structuring at AAM Advisory. With over 25 years’ in Financial Planning practice, he has extensive experience in both corporate and personal financial planning in the UK, Singapore and South East Asia, and leads a multi-disciplinary team to design and implement solutions for the needs of today’s private clients in Asia. AAM Advisory has been steadily raising its profile in Singapore and further afield in the region, and especially since its acquisition by Quilter building the brand, expanding the client and revenue base and establishing partnerships with a variety of wealth and advisory firms operating in the Singapore wealth management industry, such as bankers, lawyers, accountants and external asset managers.
Black opens the discussion by reflecting on 2020 as a year of volatility and immense difficulty for all, reporting that AAM had managed to get most of its clients through the worst of the market turmoil, advising them to hang on the portfolios, which he is pleased turned out to be the correct course of action. “New business, of course, has been impacted, but overall revenue broadly held at 2019 levels so all in all a reasonable outcome,” he reports. “We are now intently building the platform, the proposition, and our partnerships in order to expand our client and revenue base.”
Building the proposition
AAM’s purpose is to help clients secure a better future for themselves, their loved ones and future generations. Their website details how the firm has grown significantly in the past decade, helping more than 5,000 clients across 80 nationalities.
In 2016, AAM was acquired by Quilter, a leading provider of advice, investments and wealth management in the UK and internationally. Quilter plc is listed in London and Johannesburg and manages around £117.8 billion of investments on behalf of 900,000 customers (as at 31 December 2020).
Expanding the client base
As to Asia, Singapore CEO Eryk Lee had told Hubbis in an interview last year that the firm was then advising on over SGD1 billion of collective wealth and protection needs of HNW and expatriate clients through a team of over 20 experienced authorised financial planners in Singapore, adding that they not only have outstanding technical knowledge and experience but also truly understand the evolving needs of those clients.
The core of the AAM business historically was the well-to-do expatriate market working in Asia, but that has evolved over the years to take in a wider cross section of Singapore residents, including Singaporeans, PRs, and of course the numerous long-term and shorter-stay expats living or working there. Lee had explained to Hubbis how AAM’s drive was to broaden this historic client base significantly, by a greater focus on the HNWI market.
Investment expertise
AAM’s success has been built on a solid investment proposition, the cornerstone of which is a dedicated investment research team who are in place to drive investment decisions and ensure clients are invested in robust and diversified portfolios that are appropriate for their circumstances, financial goals and tolerance for risk.
The AAM Investment Service makes recommendations for the investment portfolios, monitors, provides feedback and makes suggestions for adapting the portfolio in the future. The service works especially well for clients who have an interest in investments, or who even work in the investment industry but want the support of a professional, regulated financial company to provide ongoing advice.
Planning for an uncertain future
The firm’s AAM Advisory Global Wealth Structuring Team that Ian Black heads up helps clients organise their financial planning, to pre-empt key milestones in their lives, including moving to a new country, education, home purchases and property investment, and planning for retirement.
He observes that amongst the expatriate and other globally mobile clients, there is much greater uncertainty as to what the future holds, and even as to what their intentions are. “People who had fairly strong views on where and when they were going to retire, what they would then do are now faced with a very different situation ahead of them, so the lack of clarity on the future has impacted their approaches to wealth planning,” he reports.
Tax rises and inflation grey the skies
Black points to major concerns over taxation ahead, as governments will eventually have to refill state coffers to pay for the gigantic bailout and liquidity programmes, or reflate the economies and inflate the debt away, or more probably both.
“This means not only the risk of higher tax, but also of inflation, and of course political turmoil potentially,” he cautions. “Accordingly, it is even more important today to include flexibility in wealth structuring. Actually, we have been banging that drum for a number of years now, but now it is much more starkly clear that it is a vital component of sensible planning.”
Partnering for prospects
Black reiterates Eryk Lee’s comments from last year that while AAM’s history is deeply involved in the expatriate market, the firm has been diversifying, and is nowadays much more active in the HNWI space, both directly to the end clients and also working in partnership with external asset managers, bankers, lawyers and others to provide solutions or partial solutions to the client base.
“The strategy we devised is working well and is certainly the future of this business,” Black comments. “We continue to build a full advisory service for structuring, and incorporating the flexibility I mentioned, to truly meet the needs of our clients, and our business partners and their clients.”
Agility required
He reports that the firm has had to become more agile in terms of connecting to clients and to partners, adapting the business operations and psychology of the key team members to remote connectivity.
“It has been an exciting and encouraging journey for us, both as a company and as individuals,” he says. “An interesting and positive trend that has emerged with a number of wealth managers that we are working with is a shift towards annualised fees and therefore revenue streams, which helps hold and build client AUM and which of course is far more sustainable going forward.”
Insurance in the spotlight
Insurance is also a growing element in the business, Black notes, explaining that the firm has done quite a lot of work with Mainland Chinese living in Singapore either as residents or working there, and who have been adapting to changes in China’s taxation laws.
“We find that insurance wrappers certainly can provide a very attractive means of mitigating the impact of tax,” he explains, “and for all types of clients, insurance does tend to help simplification when it comes to Common Reporting Standards, to consolidate reporting in a format that is simple and doesn't raise unwarranted concerns for tax authorities over individuals holding assets in a number of different locations for perfectly sensible reasons. That is driving a lot of conversations as well.”
Best-in-class
Black reports that the Singapore operation is agnostic in terms of products. “We are part of a group that creates insurance-based products, but we are agnostic as to platform, so we propose the solutions that we deem right as part of the broader structuring for the client and the jurisdiction, for the beneficiaries and so on,” he states. “We do not simply offer a menu of PPLI, or VUL or another solution, we aim to discuss how the wealth is going to be managed, and ultimately given all the different requirements what products and what structure offers the best outcome for the client. And within all that, insurance is an important tool, but should not drive the overall solution.”
He does, however, consider that life insurance remains an underused tool and adds that there are more discussions taking place with clients considering a full-time move to Australia. “For that purpose and given the investor regime there, life solutions, international pension plans, trusts and some fairly sophisticated structuring can be considered as part of the overall plan,” he says. “And more generally, structures and solutions need to be more cost-effective, open architecture, and streamlined solutions that allow assets to be held in a tax compliant but tax mitigating manner, given the likely increasing ravages of taxes around the globe.”
Another trend Black is witnessing is the expansion of cost-effective investment products such as ETFs, as well as the rising diversification in passive strategies that offer some characteristics of active, such as smart beta ETFs.
Relevance and agnosticism
“Ultimately,” he comments, “it is all about offering the best solutions whilst containing costs to hopefully result in better end returns to the client. We also observe the beginnings of a shift away from the type of ‘flavour-of-the-month’ funds to a more sophisticated portfolio composition as the focus on the client outcomes intensifies in our industry, and as banks and other firms focus more intently on strong, enduring, more predictable and more profitable businesses.”
Key Priorities
Amongst AAM’s key missions are the continued enhancement of digital solutions, as well as building out the investment advisory proposition and also perhaps adding discretionary services. A fourth priority is to further build the HNWI client base, either directly, or through the growing range of partnerships and collaborative arrangements with advisors and other service providers across the region.
Far from remote…
Black also observes that the success of remote engagement will likely mean that there is less travel, and fewer face-to-face meetings in the future, even if the world somehow returned to its pre-pandemic norms. “We have in fact managed far more client communication in the new environment than before,” he reports. “We have been very successful in highly targeted engagements with clients and we have been in many ways even more focused and active than before. From my perspective, this is absolutely an improvement.”
Getting Personal
Ian Black was born in Kent, England, and the family then moved to Scotland, where he remained throughout his education.
He moved back to England in his late 20s and later moved into the financial services arena only in his mid-30s when Prudential was looking to recruit sales managers from a non-financial services background. “It was a great transition for me,” he recalls. “
“It was refreshing to be in a role where I was well paid for making people better off rather than my earning being linked to the amount of money spent by a customer and gained by my employer and I feel privileged every day that I have been able to make a career of improving people’s lives.”
He then evolved his career more into the world of the IFA, or Independent Financial Advisor. “When I joined AAM, having worked for both a product provider and as an advisor seemed to work well for me in the context of this firm, allowing me to see both perspectives within our wider group,” he explains. “today, my Global Wealth Structuring team has bigger ambitions than ever before, as we seek to create and deliver holistic and relevant advice to clients, and my combined experience and background all help me in that mission. We are relishing the prospects ahead.”
Black has three children, the oldest working as a director for Deloitte in Sydney and married to a Singaporean, the second, a daughter married and living in Perth, Australia, and the youngest, 25, finishing her studies in Singapore. “I am guessing she will then head to Australia as well,” he jests, “seeing the track record of her older siblings. We are close-knit family, and it’s nice to imagine them all pretty close in the same country in the future.”
He is a keen rugby fan, supporting his adoptive Scotland, which he describes as a bitter-sweet lifelong commitment. He is also a keen ski buff, but has not been able to do that for some while. “Saalbach in Austria is a favourite destination, I must say I have really missed that since the pandemic struck,” he reports. “But I do love playing golf, albeit not very well, so if the outcome of this pandemic is some more golf but less skiing then I can happily accept that. But it is sad not to be able to visit the family in Australia; I really hope we can sort that out before too long.”
Black closes by recalling more active times in the pre-Covid world, when some years ago he took part in a ‘ski marathon’, skiing 24 peaks in 48 hours to raise money for SCOPE. “It was an utterly tremendous experience, not only doing something I loved but actually giving something back to those less fortunate.”
Director of Global Wealth Structuring at AAM Advisory