BNY Mellon is a late entrant to Asia’s expanding but overcrowded private banking scene – it launched its wealth management practice in Hong Kong only last month. The new unit isn’t fully staffed up yet, however, and [efc_twitter text="BNY is looking to hire more client-facing employees in Hong Kong next year"], we can reveal.
BNY is not alone in wanting to attract more private bankers to its Asian ranks – earlier this month both Barclays and Morgan Stanley set out new growth plans for 2015. Private banks are hiring in Hong Kong primarily to win more business from mainland Chinese millionaires, whose wealth shot up 20.5% between 2012 and 2013, according to a Capgemini and RBC report. But recruitment is often hampered by a local shortage of private bankers and the unwillingness of clients to move their assets to a new platform.
The type of private banker that BNY wants to attract in Hong Kong, however, is not identical to that of its rivals. Unlike UBS, JPMorgan and other large firms, BNY won’t be offering capital markets services to private clients and will concentrate instead on investment strategies, wealth planning and family governance. Chuck Long, a 13-year BNY veteran who moved from New York to Hong Kong in 2013 as head of wealth management for Greater China, tells us about his firm’s “differentiated wealth management model” and the skills you need to succeed within it.
More than half of the world’s investable wealth is outside the US and total investable wealth in the Asia‐Pacific region is projected to grow by nearly 10% per year over the next three years. Wealthy people are increasingly seeking more robust wealth management capabilities from their service providers as wealth matures and passes generationally within the family. Services such as tailored discretionary investment portfolios, multi-national wealth planning capabilities, and family governance are becoming increasingly important.
We will end the year with about 10 client-facing staff and 50 operations staff, with more hires planned in 2015. We maintain a ratio of about 35 to 55 clients per portfolio manager, so we will add portfolio staff as capacity is absorbed. And we are always looking for qualified wealth directors to meet our business development needs.
We’re not having difficulty attracting very qualified talent from the local market. Many industry professionals are looking for a business model that is a better fit for their long-term career goals, as well as more transparent and can better help clients with their wealth objectives. Our model for service delivery is much different from most firms in this market. We split the typical ‘relationship manager’ or ‘private banker’ position into two distinct roles: wealth directors and portfolio managers.
Our wealth directors are responsible for new business development. They focus on referral networks of CPAs, attorneys and other advisors to wealthy families. They are proficient communicators and they work with sophisticated tools to analyse the current wealth situation and then recommend a more strategically based approach to solving a client’s wealth needs.
Portfolio managers are responsible for managing the client relationship and the investment process. We ‘team manage’ each client and the portfolio manager coordinates the client team. Our portfolio managers are very proficient in investments, have excellent client relationship skills, and have a deep understanding of our firm’s offering and how our services can solve a client’s wealth needs. Their compensation is not based on the products they recommend to clients. Rather it’s based in part on client satisfaction, which we consider paramount.
It isn’t just the US expat that has exposure to US tax issues and FATCA reporting. Asian residents are increasingly multi-national – with children living in various countries including the US – and they often have investments, a business or property in America. They are therefore exposed to the US tax system and need to plan accordingly. To properly serve high-net-worth families in Asia, both US residents or local residents with US exposure, a wealth manager needs to have a qualified and knowledgeable staff. We have been able to find qualified staff – and through our team approach to management, our portfolio managers and wealth directors are also supported by wealth strategists with expertise in this area. Additionally, our WM staff complete an annual training programme comprised of modules that cover a wide range of US and global investment, wealth planning and family governance topics in detail.
As part of launching services in Hong Kong we felt it appropriate to bring certain employees from the US with experience in our wealth management business model and our systems. We subsequently plan to fill open positions with local hires and bring staff from the US to Hong Kong for career opportunities.
Launching an expanded capability in Hong Kong gave me an opportunity to use my experience on an exciting new project for BNY Mellon. The job has unique challenges, every day is exciting and has involved the effort of an extraordinary team of professionals in Hong Kong, London and the US to get us launched here in Hong Kong. It’s gratifying to see so many associates commit their time and energy into expanding a world-class wealth management organisation into Hong Kong.
Our Hong Kong team recently helped a local prominent family develop a strategy to achieve their wealth goals and they were one of our first clients in our expanded offering. That shows how our differentiated approach to wealth management works very well in this market. While my time has been very absorbed by the business, my wife, Denise, and I enjoy exploring and getting to know Hong Kong. We’ve already developed a fantastic network of friends locally and we enjoy showing our family and friends around Hong Kong when they visit.