Confidence in Banking Wealth Management
There was an column published last Friday in Business Times. Just some thoughts.
Regaining bank clients’ confidence
“A fifth of the Asian banks surveyed have lost more than 25 per cent of their client assets, compared to the global average of 10 per cent of banks”
One of the main reasons is that the AUM of Asian banks are newer and have been managed for a shorter time. Unlike in developed western countries where wealth have been with banks for decades if not generations. Another related reason is also the ‘trading’ and ‘quick buck’ mentality of the clients and short term ‘bonus maximizing’ mentality of RMs. Banks, the RMs and clients are responsible for this. How many of you truly believed that the banker who sold you the 5-yr Structured Product will be there for the whole period?
The push for “transparency and simplicity” and “open architecture” is good for clients. I have thought for some time that the usual affluent client do not need complex structures and derivatives just to achieve the extra bit of returns. There was a time it seems that products will be so complicated that even RMs will have difficulty appreciating them.
Majority clients accumulate wealth from their profession or business. Best approach for them is to continue to do so, while having prudent growth for wealth accumulated.
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