HSBC’s Global Head of Advisory Discusses Strategies for Scaling Global Private Banking and Wealth Management Services

The anticipated rapid growth of private wealth in Asia - which could see the number of millionaires in Asia more than double by 2030 to over 75 million according to HSBC– means that private banks need to maintain and even increase technology investment to keep pace with rapidly evolving market demands and expectations, says Wei Mei Tan, Global and Asia Head of Advisory for HSBC’s global private banking and wealth division. She is passionate about the hybrid advisory model and deeply committed to helping evolve the investment advisory journey at scale as private wealth in Asia expands apace, and as the thrust to democratise access to relevant and personalised advice accelerates in the region. Hubbis sat down with her late last year to learn more about her vision to deliver an optimal advisory proposition to HSBC’s private clients and to do so both economically and at scale.

Tan opens the discussion by remarking that as the number of millionaires is projected to more than double to around 76 million by 2030, private banks will have dramatically more clients to service and therefore need to find the right models to deliver an institutional-level client offering and experience.

She says that is why HSBC in mid-November launched its HSBC Prism Advisory offering in Asia [see box below], and why she is entirely committed to the vision of hybrid advisory and to continuous investment in both technology and human expertise.

The hybrid approach to customised advice

“If I were to define the institutional-level approach we are taking, it is built around the expectations of clients to have their specific needs catered to, to receive relevant and timely ideas and recommendations, customised solutions, and to construct individualised portfolios with access to the right balance of digital and human touchpoints,” Tan reports.

“In short, a hybrid model is the way forward for us, as the combination of state-of-the-art technology and human expertise is critical to solving this equation.”

Taking advice to another level

Tan observes that traditionally, relationship managers (RMs) and investment counsellors (ICs) tend to advise clients on their positions and portfolios as part of quarterly or semi-annual reviews, and usually based on relatively basic models and data, with only modest personalisation and seldom involving different financial or economic scenarios ahead.

“But with Prism, the advisor has at their fingertips a far deeper and more sophisticated set of factors than previously available,” she says. “When the RM logs in to the Prism dashboard, they can see data and analytics driven by BlackRock’s proprietary Aladdin Wealth technology, combined with our own HSBC framework around investment suitability, the HSBC CIO strategic asset allocation models and specialists’ perspectives, and a rule engine that helps the RM advise clients on asset allocation discrepancies and portfolio optimisation, all specific to a client’s unique objectives.”

Portfolios and personalisation

Tan adds that everything is then viewed through a holistic portfolio approach rather than at a product by product level.

She says this is a critical evolution in how RMs and ICs bring concepts and recommendations to their clients, adding that the ability to also layer in hypothetical outcomes based on different scenarios – for example, a period of sustained inflation and elevated interest rates – brings a much deeper logic to decisions. 

HSBC Prism Advisory Flags the Bank’s Drive to Elevate and Scale Hybrid Wealth Advisory

In mid-November last year, HSBC launched its new data-driven investment advisory service for private banking in Asia, part of a broader drive to enhance private wealth advisory and roll out a more sustainable wealth management model for the future.

One of HSBC’s champions of the new-to-the-region offering is Wei Mei Tan, Global and Asia Head of Advisory for HSBC’s global private banking and wealth division, who told Hubbis at the time of the announcement that this was a vital step towards achieving a more scalable portfolio advisory proposition, while at the same time growing fee-based assets by shifting the bank away from the transactional model that has dominated Asia’s private banking landscape for many years.

In our recent Hubbis interview, Tan explains that the mission for HSBC is to help relationship managers (RMs) and investment counsellors (ICs) deliver high-quality and highly personalised advice with the aid of HSBC Prism Advisory. It is powered by BlackRock’s proprietary Aladdin Wealth risk platform that delivers sophisticated data-driven analytics that are then teamed with guidance from HSBC advisors in a hybrid delivery model to help private banking clients make better investment decisions.

“Prism monitors clients’ portfolios constantly, providing notifications on portfolio health and actions for the client to consider,” Tan reports. “Clients can also access personalised advice through an HSBC advisor, who can use Prism’s analytics to ascertain how an action would impact the portfolio and the implications for their goals. In this way, Prism instills greater investment discipline.”

She explains this hybrid advisory offering combines institutional-quality analytics with HSBC’s in-house human expertise to offer optimal portfolio recommendations and provide timely investment and other data and news that are relevant to client portfolios. Via Prism, clients can also view model portfolios based on HSBC Global Private Banking’s strategic asset allocation and the CIO’s tactical and thematic views, then potentially personalise those models to express their own views with the support of the advisors.

“With the in-built stress testing and projection functions, clients can plot a course ahead based on different models and different scenarios,” Tan elucidates. “Working closely with an advisor to build a portfolio from the ground up using Prism’s Bespoke Asset Allocation capability gives these clients and their advisors far greater clarity and confidence in their decision-making.”

It is of course immensely challenging to make this transformation to more of a fee-driven model, as wealthy clients in the region are well known for playing the field, often holding multiple private banking accounts and working with them largely for product and research ideas, rather than for advisory or for discretionary portfolio management (DPM), the latter still struggling to gain the traction seen in the more mature wealth markets of Europe. Moreover, clients in Asia have yet to make the transition seen in the more mature markets of Europe towards protecting rather than growing family wealth for the generations ahead and optimising their estate and legacy planning.

However, Tan is confident in the value of the new Prism Advisory offering and believes more and more clients will adopt it. The fee-based service is available to HSBC Global Private Banking clients booked in Hong Kong and Singapore and eligible retail banking clients in Hong Kong. “HSBC Prism Advisory delivers a significantly more structured approach to planning and executing your investment strategy,” she concludes.

Looking ahead to future advances

Tan notes that further innovations ahead are likely to include even more sophisticated predictive analytics to help drive more definitive results from the optimisation engine.

“These analytics will also include more client preferences in the future,” she reports. “Today, optimisation works predominantly based on risk factors, but optimisation can be expanded to include even more specific client preferences. In short, the next step will be to capture behavioural aspects from past client activity along with their stated and constantly updated preferences and to embed this information as part of the optimisation journey.”

Deep pockets required

Tan says that in general terms and based on the anticipated rapid growth of private wealth in Asia, the private banking industry on average is still underestimating the technology investment needed to keep pace with the market needs. She notes that in Asia alone, HSBC Global Private Banking has invested over USD200 million over a four-year period to build and innovate its core banking and digital platforms to meet the fast-changing wealth and lifestyle needs of clients. And that type of investment will continue apace.

“I am passionate about the hybrid model and evolving the investment advisory journey, and I believe that we will need to keep investing rapidly and significantly in technology in order to deliver the best proposition and to do so economically at scale,” she states.

“We want to stay ahead of the competition, and upgrading is a constant requirement; it is not a one-off action.”

The client experience and the long-term vision

Tan closes the conversation by also pointing to the need to elevate the client experience, or the ‘last mile’ as she calls it.

“The actual client experience cannot be forgotten amidst all this, and users must be comfortable with and enjoy processing information and ideas across multiple channels, including digitally, of course,” she says. “We are working on that continuously and striving to ensure that the HSBC Prism Advisory service is enhanced and embellished constantly. WealthTech is about that longer-term vision, and to achieve that, we must invest continuously and ever more astutely.”

Getting Personal

Wei Mei Tan was born and educated in Singapore and later went to Harvard in the US to further her executive qualifications. She has since enjoyed a varied and dynamic career spanning over 22 years.

“I am lucky to have held global roles, including five years in Hong Kong, and I have managed to pivot from an earlier investment role as a fixed-income portfolio manager, shifting first to credit products structuring in investment banking and then moving into wealth technology over the past decade,” she explains.

Tan says this was a very conscious evolution into WealthTech, wanting to help more clients manage their portfolios in a more scalable manner.

“The passion for me is both the investment side and the advisory platform, aligning both to help the bank to achieve better and more sustainable revenues, while delivering the best possible solutions for clients,” she reports.

Spare time is often spent practising high-energy martial arts-inspired workouts that allow her to de-stress through highly disciplined and intensive routines. She professes a love of BodyCombat, a cardio-intensive and mixed martial arts-based workout, as well as BodyPump, which is more of a strength and resistance training programme using weights.

“And after that, to wind down, I  often head to the spa,” she explains. “And my love of spas might also see me sometimes on my travels to Japan, my favourite destination, to enjoy the incredible food and visit their wonderful ‘onsens’.”