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From colleges to mistresses: how Asian private bankers are beating the robo advisors

Private bankers

Why are banks like UBS, Credit Suisse, Julius Baer and DBS hiring hundreds of relationship managers in Asia just as robo-advisor technology starts to take off?

It’s not just that Asia’s millionaires and billionaires typically still want to talk to real people about their investments – they also want to offload their personal problems.

Private bankers in the region have always provided all-round advice. But cementing strong relationships by tackling clients’ thorny non-financial issues is now more important than ever as the sector becomes more competitive (ANZ, Barclays and Coutts have all decided to quit Asia wealth management this year).

“The best way to communicate with clients on a personal level is to go beyond your job scope to win their trust,” says Liu San Li, a former Coutts private banker, now client director in private wealth management at headhunters EMA Partners in Singapore. “You might be running errands, chauffeuring them, or accompanying them to events unrelated to banking.”

Clients are increasingly asking RMs for advice about which colleges their children should attend, which subjects they should study, and where they should intern.

“The banker probably has an MBA so their views are valued on the choice of university,” says Rahul Sen, an ex-Merrill Lynch private banker, now head of wealth management at search firm The Omerta Group. “If RMs can help ensure that the kids are groomed to take over the family business, they’ve established a relationship with the future CEO.”

RMs in Singapore and Hong Kong are now also becoming de facto therapists for their rich clients and are offering advice on even more sensitive subjects than schooling and succession planning.

“Sometimes clients just want to talk to someone and will confide their problems to the RM. I know an RM whose client told her all his family and health issues,” says Sean Kang, director of wealth management at consultancy McLagan. “This is a good thing as it strengthens the relationship and is something which a robo advisor can’t replace.”

Sen says it’s also not uncommon for male clients in Asia to ask bankers to set up trusts for their mistress and her family. “It’s to avoid legal hassles later on,” he adds.

This has to be done “skilfully and confidentially” so that the “other family” is taken care of but the cleint’s overall investment structure remains intact. “In China and some other Asian societies having a young mistress when you’re rich and powerful is the ultimate status symbol,” says Sen.

“If a client discusses personal confidential details about their life, for example, that’s the ultimate sign of a strong relationship,” adds Liu from EMA Partners. “When clients seek this kind of advice, this means they’re giving the RM very personal access to themselves – and that’s a huge achievement for the RM.”

And it can pay dividends when the RM wants to change jobs. “If you have a very personal relationship, your clients will follow you and move their assets to whatever bank you join,” says Liu.

Image credit: btrenkel, Getty

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