As Asian private wealth continues to grow, we speak with Hong Kong-based Andrew Sum, head of greater China at Coutts – the man helping to spearhead the bank's drive into a fiercely competitive private-banking market.
Coutts and its global rivals are battling to win the wallets of wealthy Asians. And with good reason: In the World Wealth Report 2012 by RBC Wealth Management and Capgemini, the number of high-net-worth individuals in Asia Pacific – those with investable assets of US$1m or more – increased by 1.6 percent over the previous year to 3.37m, making the region the largest HNWI home for the first time. North America and Europe mustered 3.35m and 3.2m respectively.
Sum is a 16-year Coutts veteran who joined the firm from Lloyds TSB as an assistant vice president and went on to lead the Hong Kong team before taking up his current role. Born in Hong Kong, Sum was educated in the UK from age 15 and graduated from Cardiff University in 1994. An avid sportsman, he played international rugby for the Hong Kong national team between 1999 and 2000, and was a board member of the Hong Kong Rugby Football Union between 2003 and 2011.
Describe the wealth-management market in greater China
Wealth management is one of the most attractive banking sectors in Asia. There are well over 3m high-net-worth individuals in Asia Pacific. And almost half of their investable assets are not being managed professionally by the wealth industry. In Asia, wealth management is less than 15 years old. It is still in its nascent stages, although it is quickly and positively maturing from a regulatory and product standpoint.
In Hong Kong, demand for private banking will continue to be high this year given that we are seeing a lot of liquidity in the market. Here, wealth managers will focus on gaining market share and winning trust from new clients.
The concept of wealth management in mainland China remains relatively new, particularly when compared with the West, where the industry has developed over hundreds of years. Much of the wealth in China, and throughout the region, is first generation; it is created by entrepreneurs through businesses they have successfully established and grown themselves. To reach such clients more effectively, the industry needs to build far more awareness of how it is relevant to them, particularly in helping them with succession planning – both for their family businesses and the generational transfer of wealth. In China, we clearly have to get past this point before the wealth-management sector can convincingly take off.
Will Coutts recruit more private bankers in greater China this year? What skills and experience are you looking for?
We see demand continuing to grow for private bankers. To satisfy the growing need, the industry should focus on grooming the next generation of private bankers. But for senior roles, successful private bankers not only need relevant experience, they must also be comfortable and sociable with many different types of people, in a variety of settings. They should have a high self awareness of their own strengths and weaknesses, and a strong willingness to address the latter.
While it’s important that a banker brings in new assets, at the end of the day the industry is about long-term relationships and trust. Bankers need to understand what their clients are trying to achieve and how they can best help them. Candidates should have a track record of doing just that – of being somebody who has the knowledge to provide real client insight, which is broader than just the provision of basic banking services. A service ethos is also really important. Our clients can potentially be quite demanding and employees need to deal with that and be responsive. Language skills and networks are important, too, as is a high level of integrity and risk awareness.
Many private bankers from outside Asia want to work in the region, but how feasible is this without existing Asian clients?
It isn’t easy, but it is not impossible. Bankers would have to be prepared to work very hard to overcome initial barriers like learning the local market language, and being open-minded about cultural differences.
Why did you decide on a banking career? And did you have a mentor early on?
Actually, banking chose me. When I graduated from Cardiff University in the UK in 1994, banks were on a hiring spree and I was recruited as a trainee for Lloyds TSB, Hong Kong. I didn’t have an officially-appointed mentor, but that doesn't mean you cannot look for your own. I had several role models to interact with right from the beginning and I am very grateful for their guidance. In this industry, we also meet many successful people externally and it has been a privilege to learn from elites in various industries.
Private banking has a reputation for job hopping, but you've been at Coutts for more than 16 years. What motivates you to stay put?
All ambitious individuals are driven by opportunities; these can exist internally and externally. I was fortunate enough to have plenty of opportunities presented to me internally. That’s why the decision to stay put was an easy one.
What was the most challenging time in your career?
It’s natural to feel that your most current challenge is the toughest, but when we look back, this is often not the case. For me, it was when I had been a private banker for a few years, and some of my relationships with clients were taking time to develop. There were moments of self doubt, and uncertainty whether success was ever going to materialise, or whether I was really suitable for the industry. One client relationship took me nine years to build – that's my record so far.
What do you know now about private banking that you wish you’d known when you started?
How long the hours of work can be.
You played rugby at a high level. Did the sport teach you anything that has helped your career?
Everything really! Not just banking, but almost everything I do. In particular, to build camaraderie and never isolate yourself no matter what position you are in; and to understand yourself and take action to fully utilise your strengths while correcting your weaknesses. Face self doubt and fear in a positive way and turn it into your own motivation.