Fancy buying a private jet or helping to set up an ECM deal without the instability of working in investment banking? Welcome to ultra high net worth (UHNW) private banking – a sector where banks in Asia are hiring.
While the bulk of relationship managers (RMs) in private banking look after clients investing as 'little' as US$1m, the threshold for UHNW clients is typically at least US$20m to US$30m. Singapore's ultra-wealthy population is set to grow by 54.3% by 2024 – the strongest rise among 108 cities globally, according to a March survey by Knight Frank.
Most large banks have dedicated UHNW teams in both Singapore and Hong Kong to service the mega rich across the region. All of them will add UHNW headcount this year, but they face a small talent pool which may restrict them to hiring only a handful of new RMs each, say recruiters.
Credit Suisse is among the most expansionist banks. UHNW clients in Asia, particular those from China, India and Indonesia, are becoming increasingly important to the firm and hold more than 60% of its regional assets under management (AUM), Helman Sitohang, Credit Suisse’s chief executive for Asia Pacific, told Finance Asia last year.
“Credit Suisse, UBS, Citi and Deutsche are among the main banks building their teams. They have a committed focus on the UHNW segment and a high usage of their balance sheet to deliver value to private clients,” says a source with knowledge of the firms who asked not to be named.
While UHNW banking hasn’t traditionally been a recruitment priority for commercial lenders in Asia, this is now starting to change. Standard Chartered, in particular, wants to hire. It promoted Alison May Chan as managing director for UHNW in Greater China in January and appointed Rahul Raswant as executive director, UHNW clients, in October. Stan Chart’s ultra-rich customers only make up a single-digit percentage of its current client base, but they hold about 40% of its AUM, suggesting there is vast room for growth.
“At large private banks in Asia, the UHNW team will service about 8% to 10% of overall clients,” says Rahul Sen, head of private wealth management at search firm The Omerta Group. “These clients are less price sensitive, so a different strategy and a separate desk are required to address their needs – maybe they want to buy a plane, purchase commercial real estate or have an IPO or ECM event. And they usually have even closer access to the firm’s IB division.”
Hiring an UHNW banker isn’t straight forward, however. “The war for talent is more acute in UHNW as building relationships is more elaborate and requires RMs to have a deeper understanding of products,” says Pathik Gupta, head of Asia Pacific wealth management at the consultancy McLagan. “They must deliver capital markets expertise, inter-generational planning and complex product structures. Such skills are limited in the job market and banks are eager to attract RMs at all cost who can bring together both UHNW relationships and complex solution planning.”
The need for grey hairs if you work in UHNW banking is even more extreme than it is in private banking generally. “UHNW success only comes with extensive years of experience. The high net worth clients you take on initially become UHNW ones as their wealth grows and they might have peers in the same income strata who also become clients over time,” says Sen. “An UHNW banker is often considered part of the family by their clients.”
These strong bonds mean clients are more likely to follow RMs if they want to join a new firm. “RMs in this segment have much deeper relationships, so there’s a high likelihood that clients will move unless the RM shifts to a bank where the solutions are not broad enough,” explains Gupta from McLagan.
Banks won’t always insist that all your clients are ultra wealthy. “Every private bank faces a talent shortage. To address this, the private bank will at times be OK with a new RM only having about 60% to 70% of their clients who are UHNW,” says Sen from The Omerta Group.