Asia’s chronic talent shortage has become a key constraint to growth in wealth management in a region where the wealthy, according to consultancy Capgemini, are forecast to more than double their wealth to $42trn in a decade from $17.4trn today.
But the traditional push to address the shortage by hiring from Europe has come to an end, said Abimanu Jeyakumar, a headhunter for private wealth management at Carlton Senior Appointments in Hong Kong.
“Transferring people from the US, Europe and the UK has not worked well because the cultural competencies are so vastly different,” Jeyakumar said.
“European clients tend to work more on a discretionary portfolio mandate where they trust the relationship manager and the advisory team to take care of their assets whereas in Asia the clients want to be involved in absolutely every decision-making process.”
Chinese language barrier
Jenkins added that Asia was often viewed in a similar way to the Middle East in the sense that there was “not enough rigour there”, adding that “anyone moving there will be working with less talent”. However, in Asia, Singapore is seen as favourable.
“Nobody we know would go to Hong Kong now,” Jenkins said. “Hong Kong is seen as fully Chinese now and it is difficult to get along culturally if you do not speak Mandarin or Cantonese.
Thomas Stemp, a managing director at Stemp International in Hong Kong, a boutique executive search firm specialising in asset and wealth management, said the wealthy in Asia wanted to speak to the person managing their personal wealth in their own language – or even dialect.
“They will want to work with people that they can easily understand and minimise any chance of making poor investment decisions as a result of key risks being lost in translation,” Stemp said.
There is also broad cultural diversity in Asia, and it typically takes foreigners a long time to appreciate the cultural sensitivities.
The relatively small number of expatriate client advisors who have managed to be successful in these positions have typically been in the region for many years, in roles which Stemp said had given them long-term client exposure and cultural understanding.
One false assumption is that most candidates would move to Asia from abroad if the compensation package was generous, said Matthew Jenkins, a partner at Syracuse Partners in London, an executive search firm focusing on senior appointments in asset and wealth management.
Senior candidates are particularly reluctant to relocate to Asia despite better compensation.
“What we have seen is that there is actually a flow the other way,” Jenkins said. “We have had long phone calls this year with people in Asia who were trying to relocate to London.”
Ayyaz Ahmad, the Asia Pacific director of Funds Partnership in Singapore, which recruits for asset and wealth managers, said that after more than a decade of importing talent, it was time to focus on training up local candidates.
“[Locals] are more than capable and they have the language skills,” Ahmad said.
Wealth managers are increasingly looking for local people to develop, hiring candidates straight out of university or from non-finance backgrounds such as luxury real estate or even recruitment firms.
Connections still get candidates far. Jeyakumar said while some candidates had made valuable contacts through family connections, others had done so while working in sectors where they were dealing with wealthy clients. Those contacts, all of which could become potential clients, are attractive for wealth managers.
For example, one candidate, who had been working for a top investment bank, left to join an auction house and built a network of wealthy Chinese that were bidding for diamonds, watches and paintings, before moving into wealth management.
Even if candidates have the polish, confidence and skills to close a deal, the move into wealth management is not always straightforward. Jeyakumar said these candidates often lacked knowledge about financial services or the creativity to come up with new ideas for client portfolios.
Candidates in other sectors, such as brokerages or luxury real estate, often focus on closing a deal. In wealth management, however, it is about building a long-term relationship with clients who are used to telling others what to do and therefore hard to convince.