Asian millionaires and billionaires are getting younger – and that’s forcing private banks in the region to refocus their hiring plans for 2018.
Asia now has the highest number of billionaires in the world, leapfrogging the US for the first time, according to a UBS and PwC report released earlier this year. In China, two people – mainly self-made entrepreneurs – become billionaires every week. And the average age of these new entrants is just 55, which is six years younger than their American peers.
Meanwhile, older Asian businesses leaders, who set up family-run companies in the latter third of the 20th century, are increasingly handing over the reins to their sons and daughters, now in their 30s or 40s.
Alongside their ongoing recruitment of relationship managers, private banks in Hong Kong and Singapore – led by UBS, Credit Suisse and Citi – will be hiring more product specialists, investment advisors and technologists next year to meet the needs of their more youthful clients.
Product developers will be particularly in demand, building on a trend which began this year. Recent high-profile hires include Deutsche Bank taking on two directors in October: Wee Teck Tay as head of private markets APAC, and John Lilley as an APAC funds solutions specialist.
“The new generation of wealthy people in Asia have a higher risk appetite and are mostly interested in products that can potentially generate annual returns in the 20% range,” says Liu San Li, an ex-private banker, now head of banking at search firm IGS Asia in Singapore. “They have less interest in the meagre 2% to 5% returns from products that just serve to beat deposits rates or inflation.”
This means RMs are increasingly working behind the scenes with product developers to build more complex products for younger clients. “Traditional investment products such as equities and bonds no longer meet their demands. These clients are looking at more unique opportunities, such as in private equity,” says Sean Kang, director of Asia Pacific wealth management at the Scorpio Partnership, a consultancy.
Client-facing investment advisors, who often attend meetings with RMs, are also more sought after in Asia than they were just two years ago, say headhunters. J.P. Morgan has about 20 IAs in Singapore alone and is selectively hiring more people who can “take complex financial terminology and make it easily understood for clients without losing any of the critical information”, Christophe Aba, regional head of investments for Southeast Asia, told us earlier this year.
But younger clients don’t simply want higher investment returns. “When it comes to financial products, our research shows there’s a growing demand for sustainable investing,” says Kang. “While their parents were looking to build up their business, the new generation are looking to contribute back to society as well. Product specialists with an ability to generate returns on sustainable investment products are now sought after by banks.”
As private banks in Asia compete to attract assets from younger clients, they are also pouring vast amounts of money into technology platforms and expanding their technology teams in Singapore and Hong Kong. Last month UBS went live with its One Wealth Management Platform, a $1bn global project to standardise its IT systems, in the two cities. Deutsche has been hiring technologists in both markets as part of a $76m investment to enhance client-focused digital technology.