The US-China trade war is starting to hit Hong Kong’s private bankers where it hurts – the assets under management (AUM) of their billionaire and millionaire clients. And this is making them more open to job opportunities at rival banks, say headhunters.
US dollar billionaires in Hong Kong lost US$56bn (17.5%) of their combined fortunes in 2018, according to a new survey by research firm Wealth-X. The report principally blamed the trade dispute, which has negatively affected consumption, investment returns, and overall economic sentiment.
Hong Kong-based private bankers covering the ultra-high-net-worth (UHNW) segment (i.e. billionaires and top-end millionaires) have become increasingly alarmed over the past few days as the trade war has escalated, with both sides introducing new tariffs, say headhunters. A worsening of the dispute may cause their clients to become even more risk adverse with their investments, which could in turn affect bankers’ AUM, revenues and (ultimately) bonuses.
“Private bankers are spooked by the US-China trade war, because everyone’s investment portfolios are affected by it,” says former Merrill Lynch private banker Rahul Sen, now a global leader in private wealth management at search firm Boyden. Hong Kong’s Hang Seng Index fell 1.5% on Tuesday and is down 5.3% for May.
But while investment bankers tend to batten down the hatches when there’s economic uncertainty, private bankers in Hong Kong are now generally keener to move jobs because shifting to a new bank can help them restructure their portfolios to better adapt to market conditions, says Sen.
Another headhunter told us that volatile markets can help trigger more “musical chairs” in UHNW private banking.
This is good news for the several private banks in Hong Kong that have recently stepped up their hiring of UHNW bankers as their recruitment could become more straightforward. In March, HSBC announced that it has established – and will expand – a new UHNW team in Hong Kong, serving clients who have assets of about $30m or more.
UBS and Credit Suisse also have expanding UHNW units in the city. As we reported last week, UBS appointed Chester Wong from HSBC as desk head of UHNW and global family office.
Image credit: ANNECORDON, Getty
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