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Robo advice not for HNW, says Citi

Asia's wealth and asset managers weighed in on tech developments that are expected to impact the industry during a panel discussion at Fund Forum Asia 2017 in Hong Kong.


Asia’s high-net-worth investors are unlikely to embrace robo-advisers, said Roger Bacon, Citi Private Bank’s head of investments for Asia-Pacific, who was on a panel discussing the state of the industry.

“To assume that [robo-advisories] will pervade the higher echelons of the wealth spectrum, I think we are probably getting ahead of ourselves a little bit. Certainly, for information dissemination, it could be used for clients. But for actual advice, I think it’s a very different answer.”

Robo-advisors are likely to continue gaining clients in the mass retail space, Bacon said. “But once you get into the high-net-worth and ultra-high-net worth space, the reality is that robo advice has no traction.”

Bacon acknowledged robo-advisors may have a more prominent place in the upper client segment as wealth is handed off to the younger generation. 

“But when I think about first generation wealth, it’s very hands on, it’s labour intensive, very human-based at the moment, and I don’t think it will change dramatically while the first generation is pulling the strings.” 

AI and end clients

Speaking on artifical intelligence, Pedro Bastos, HSBC Global Asset Management’s Asia-Pacific CEO, said he is excited about the role AI can play for end-clients.

For example, he envisions Alexa, an intelligent personal assistant developed by Amazon (similar to Apple’s Siri and Google Assistant), to give him the progress of his investment portfolio when he wakes up or during the end of the day.

“Or when I’m deciding to take a taxi, [Alexa would] say how much will I be saving or how it will impact my pension if I don’t take a taxi for a hundred days or whatever,” he added.

Tech and operations

On the asset managment side, management believes technology will have the biggest impact in making business operations more efficient.

A technology adoption strategy could be aimed at the processes involving a large number of employees in Asia doing repetitive tasks, said Lieven Debruyne, Schroder Investment Management’s Asia-Pacific CEO.

Elliot Shadforth, Asia-Pacific wealth and management leader at EY, added that global asset managers have commonly transferred some operations from high-cost locations to low-cost centres, but the result is that firms just increased the number of working hours and the number of people. 

“We still haven’t really in many ways replaced that model. As [Debruyne] said, there’s lots of repetitive manual work,” Shadforth said.

During a polling session of the delegates who attended the panel discussion, a majority of them believe that operations will benefit the most from digitisation and advances in technology.



Part of the Mark Allen Group.