Local staff
Pictet Wealth believes it can attract more money to discretionary mandates because it has a local team to service clients as opposed to a team in Europe managing the full portfolio of Asian clients.
“Asia investors are very demanding in terms of the performance and are very focused on their home and regional markets. So private banks in Asia need to have a local investment platform for both their discretionary and advisory businesses,” Pictet Wealth’s Haberer said, noting that 80% of Asian investors’ assets are invested in regional assets.
Haberer explained that Asia-focused investments are managed from Hong Kong and in Singapore, while assets invested outside Asia are managed from the firm’s European offices in Switzerland and in Europe. In Asia, the firm’s discretionary business has 15 investment professionals.
The firm also increased the number for its relationship managers in the region. At the moment, Pictet Wealth has 45 senior bankers, which compares to 12 seven years ago, Haberer said.
Deutsche Wealth’s Huynh also noted the importance of having staff on-the-ground.
“We have been aggressive in terms of hiring new bankers over the last 18-24 months. These new bankers also come from firms where discretionary management was also part of their former employers, so they also bring over clients who are interested in Deutsche Wealth’s discretionary services,” he said.
Product offerings are also a factor in attracting discretionary clients.
“Seven to 10 years ago, investors would be offered one specific mandate on the basic grid, such as dynamic, balanced and conservative. It would be very standard,” Pictet Wealth’s Haberer said.
Now, the firm has a multi-strategy approach, he said, adding that his firm identified 50 different investor profiles, which includes investment and asset allocation preferences, investment needs and currencies.
“Especially for the larger clients, we use different mandates for them. It is important that you adapt to the client who may want different strategies for different parts of their assets,” he said.
At the moment, the firm is developing new equity and fixed income mandates, according to Harberer, adding that investors have become concerned that interest rates are rising and have become confused about managing their fixed income sleeve.
“Everybody needs a fixed income compartment. We have to further differentiate our mandates in order to help our clients in this delicate phase.”
