The firm’s main markets in Asia are mostly in developed markets, including Hong Kong, Taiwan and Singapore, Haberer told FSA in a recent interview. But the firm is now planning to target the growing wealth in China and Indonesia.
Haberer explained Indonesia provides significant opportunities for wealth managers, especially after the country’s government launched the tax amnesty programme in 2016, which encouraged high-net-worth individuals and families to transfer their offshore wealth back to Indonesia.
Claude Haberer, Pictet Wealth Management
Wealth in the country rose significantly after the amnesty. With around 124,090 HNWI individuals in Indonesia, HNWI wealth increased to $700bn in 2017 from $184.27bn in 2016, according to data from Capgemini.
“The Indonesians have now clarified their financial situation,” Haberer told FSA.
Other wealth managers have begun targeting Indonesia’s wealthy following the tax amnesty programme. Lombard Odier, for example, formed a partnership with Bank Mandiri in April 2018 to develop the bank’s private banking arm through investment and family services. In 2017, Singapore-based OCBC launched an onshore private banking business in the country.
China also continues to grow. According to a Knight Frank report, the country has the world’s second highest number of individuals having at least $30m in investible assets (9,953). The number is expected to grow 30% in the next five years.
The wealth in China is also expected to flow into Hong Kong. Up to 49% of Hong Kong’s private wealth AUM could come from by mainland China by 2023, according to a KPMG report.
To capture these opportunities, Pictet WM plans to hire more bankers in Hong Kong and Singapore, which are the firm’s regional hubs, according to Haberer. The Hong Kong office focuses on Greater China clients, while the Singapore office covers Southeast Asia, which also includes non-resident Indian portfolios from clients in Dubai.
Without giving exact numbers, Haberer noted that the firm will not be hiring aggressively. Currently, it has 52 bankers based in the region.
“We must be in a position where a client has access to a banker, an investment specialist, a product specialist, as well as a partner within the firm.
“I still meet most of the clients, but you can’t do that if you have 500 relationship managers and thousands of customers,” he said.
The firm is also engaging with fintech firms to gauge the effectiveness of tools that could be used in wealth management operations, including face-to-face interactions with clients, client onboarding and communications, according to Richard Mak, Hong Kong-based managing director and head of Asia advisory.
Mak noted, however, that the firm has no plans to offer a robo-advisory service or any platform that will allow clients to make direct transactions online.
The firm’s wealth app, for example, which allows clients to access market information as well as their accounts, does not allow client transactions, according to Haberer.
“We are not in the business of pure transactions. We are in the business of the transaction being a consequence of the recommendations and advice that we provide.
“Our purpose is not to industrialise, like what a retail bank would do with robo-advisory, but to enrich the investment content and insight,” Haberer said.