Executive SummarySwiss private banking and asset management firm FINAPORT is on a growth track in Asia. The company has operated out of Singapore since 2009, having been established in Zurich only one year earlier. Alex Borissov, the Zurich-based Firm’s co-founder, partner and its Singapore CEO and Philipp Piaz, co-founder and managing partner in Singapore, met with Hubbis to explain the firm’s DNA and why and how they intend to further build the Asian business, especially in the South-East Asian countries. FINAPORT was founded in 2007 in Zurich and also has offices in Miami and Asia. Adhering to regulatory minimum requirements, their clientele’s assets range from entry-level private banking clients in Zurich up to tens of millions dollars for the ultra-rich category globally. The firm also manages the investable assets for several family offices as well, making use of their global connections and network to source attractive investments in the public as well as the private space. Within Asia, the firm operates from its base in Singapore, having opened there a year after the firm’s creation. Although a relatively small firm in numbers with just over 60 employees globally, FINAPORT leverages partner institutions around the world. By working closely with many of their over 60 banks and custodians globally, FINAPORT can, in turn, bring great scope and range to its clients and to its own bankers. Borissov and Piaz currently have several central and connected goals in Asia, namely, to bring in experienced new relationship management talent, to expand the understanding of FINAPORT, its essential characteristics and offerings, and also to become even more agile in terms of adapting to the vicissitudes of the wealth market’s evolution and the vacillations of the global investment markets.
Swiss wealth management firm FINAPORT is in an expansive mood in Asia, looking outwards across South-East Asia from its regional base in Singapore. Two of the firm’s key partners, Alex Borissov, Finaport’s Zurich-based co-founder, partner and CEO and Philipp Piaz, managing partner in Singapore, met with Hubbis to explain why they see opportunities and how they intend to grasp them.
Borissov began by highlighting the critical independence of thought and action that FINAPORT offers clients and its senior bankers. “The idea behind FINAPORT from the outset was to create the most suitable and the easiest environment for a banker to realise his, or her, abilities and bring the greatest capabilities to their clients,” he reports. “We wanted to create a platform that would not only open doors to many financial institutions and other companies in the market, but also to bring objectivity, independence, and global reach to the bankers and their clients.”
The finance space today, he expounded, is replete with many different players with many visions. “Our main activity is asset management,” Borissov says. “We firmly believe we can identify and then select the best public market investment options for our traditional clients, as well as offering our clients broad access to alternative markets, primarily the private asset markets.”
As to client relationships, Borissov explains that simplicity and objectivity are key. “If our clients see positive results and we produce optimal performance relative to the markets, they like it, and our relationships are solidified and then expand.”
A decade of growth
Borissov explains that working with some sixty financial institutions for execution and custody worldwide also brings one of FINAPORT’s biggest managerial and financial challenges in the form of adapting its technology to create a smooth, seamless technological interface to track and then report all the changes in the client portfolios.
Technology – a vital cog
Some banks or financial institutions use archaic systems, while some of them are very advanced. “We have invested a lot of time and money in handling this efficiently,” he explains. “It is always a challenge, as this space is very fragmented, everybody has their banking software, which does not really conform to one standard. And we are somewhere in the middle trying to harmonise the data, which can sometimes be very difficult.”
Exploring technological change in further detail, Borissov sees automation for the firm’s broader wealth management business as a major challenge. “We see many processes, techniques, and skills being transferred into artificial intelligence or semi-artificial intelligence as well as computer-based programmes,” he reports. “It is a profound change for us, because on the one hand, it helps us to do our business; for example, an innovation such as blockchain will probably help the harmonisation of the data I mentioned earlier, whilst on the other hand, it will result in greater competition in the marketplace in providing solutions for clients.”
Old school to new world
Borissov is excited about the future, as he sees the asset management business evolving from ‘old school’ thinking into something far more ground-breaking. “It is disruptive, it will need and use far more computer power, far more knowledge and data, and is driven by delivery of the right solution. And at the same time, technology will improve access for clients to our products and solutions through any fixed or mobile applications.”
He also sees the market for wealth management in Asia maturing positively. “The world of retrocessions is disappearing in Europe,” Borissov reports. “Although for emerging markets the practices are as yet still less strict, the market could go retrocession free, when the business environment is ready.”
For the time being, Borissov argues that disclosure is the key. “When a commission becomes an impediment to performance or efficiency of the portfolio then it is a real problem,” he comments. “It is absolutely right that the regulator is looking at this and making the clients aware that this problem exists today.”
FINAPORT’s entrepreneurial DNA
These technological and market evolutions aside, Borissov characterises the core of the firm’s DNA as its entrepreneurial mentality and explains how that impacts the firm’s hiring initiatives, which are a key focus currently, especially in Asia.
“We believe we are of very considerable interest for those more senior bankers who have already earned the trust of their clients, that have close ties to them and their families, and to their corporate environment” says Borissov. However, “we are probably not the firm for those bankers that are still in the early stages of developing their client base and have just started their learning and experience process.”
He expands on this theory. “Working with a major institution, bankers are usually faced with one set of interests, one set of products, one set of corporate regulations and it is difficult to realise their own personal ambitions. Accordingly, a lot of bankers find independent asset management, in general, a very attractive proposition, both financially and for their own personal enrichment.”
The FINAPORT website and a recent corporate brochure provide further insight with a comment that evidently aims to encapsulate the firm’s appeal to bankers seeking pastures new.
“We strongly believe that, by giving talented financial experts the freedom to select products, services and providers, the resources they need to conduct their business and the right setting to operate from, they can improve their performance manifold and become a far more valuable adviser to their client,” the company literature states. “The combination of traditional Swiss Private Banking and cutting-edge technology, into a forward looking modern partnership structure where financial advisers play the leading role, is a winning formula for the company, the financial adviser and above all for the client.”
Asia’s growth means the firm is eager to find and hire such senior bankers who want to take the leap to an established independent wealth management company.
Singapore serves as FINAPORT’s gateway to Asia, described “virtually our second home” by the company. FINAPORT established their office in Singapore in 2009 and holds a Capital Market Services License (CMS) under Singapore’s MAS regulatory oversight. The firm is also a founding committee member of the Association of Independent Asset Managers Singapore (www.AIAM.org.sg), where Philipp Piaz is currently the acting president after having served as treasurer and committee member since inception.
“Asia has been a key priority for us since we set the firm up on day one and it was absolutely a logical step for us to open here early on, with Philipp being the founding cornerstone for us from the very beginning,” Borissov reports. “It is a marketplace we cannot neglect if you want to be international, if you want to capture all the opportunities that the world has to offer. This region also produces the greatest number of rich and newly wealthy clientele and is expanding in all key areas.”
Singapore the hub for SE Asia
Accordingly, Asia is integral to the FINAPORT offering. “We work with clients from this region by expanding further into the banking scene and by attracting Asian bankers attuned to the environment,” explains Borissov. “Philipp was born in Thailand and is half-Thai, half-Swiss. We also recently welcomed Elaine Foo on board, alongside a team of experienced professionals, who will bring exciting new opportunities to the table with her regional presence and clients in various locations like Singapore, Malaysia, and Hong Kong.”
Key Priorities – growth, talent and agility
The most urgent priority for both Borissov and Piaz is to first expand the Asian operations by attracting more bankers, professionals of such a level as to be able to bring their own clients to the firm and to operate in an entrepreneurial manner and on their own, albeit supported by the global FINAPORT resources.
“We are focusing primarily on the regional South-East Asian markets, as the Singapore market is very well banked, possibly overbanked,” Piaz explains. “However, we see a lot of growth potential in the surrounding cities and countries in this region and we want bankers that are active in these robust wealth creation and growth markets. We see the growth there as both substantial and sustainable, and we want to be a part of that. Consequently, we are seeking quality, experienced bankers that want opportunities to realise the best that the world of independent asset management can bring them.”
Spread the word
Another associated priority is to more broadly spread the word about FINAPORT and its DNA and ambitions. Piaz, who since 2009 has been FINAPORT’s Singapore managing partner, adds that one of the most important tasks on his agenda over the next 12 months is to spread the message widely about FINAPORT, and to generally convey the appeals of the independent wealth management business in Asia, and thereby attract some established, successful private bankers to join the firm.
Piaz is both pragmatic and excited about the road ahead. “I believe to grow the business we should be focussing on two things,” he explains. “One is to raise the awareness of our company, in essence across banks and bankers in order to spread the word about who we are and what we do, and the other is to basically demystify how the external asset management industry operates in Asia. We are working within a well regulated environment and, with the Singapore MAS, have a very business oriented authority guiding the industry from a regulatory point of view.”
Piaz also believes the suite of offerings to both new and existing clients is now increasingly attractive as the firm expands further, adding another lure to attract new banking and relationship management talent to the firm.
Another priority for both partners is to enhance agility, especially in face of the more uncertain global economic and investment conditions since February 2018.
“We have adapted to the increasingly volatile markets in terms of our investment activities,” Piaz comments. “Apart from the bonds and equities that everybody handles, we have been looking for more and more opportunities to invest our clients’ wealth in assets outside what is normally available within the big international private banks. We still offer regular portfolio management services as our core, particularly on the equity side, but we are also a lot more opportunistic than we used to be. Much value for clients can be found in alternative assets classes, such as quantitative trading strategies, real estate investments, insurance solutions or private placements for example. I feel that the clients and us have to be much nimbler on our feet these days.”
There are plenty of uncertainties ahead in 2019, but at least the US Federal Reserve has taken some of the stress off the table with its latest comments and guidance on the interest rate outlook for the dollar. Finaport’s strategy to widen its footprint across the region around Singapore appears both wise and timely.