HSBC moulds high-end

Roxane McMeeken outlines the bank’s strategy for doubling profits by 2006. HSBC Republic, the bank’s ultra high net worth arm, is lending some of its products to its sister funds group in a bid to take on European market leader Fidelity. The borrowed products will be remoulded, with added guarantees to lower risk for the mass affluent market. They will then be sold further down the chain as white-labelled products to distributors, says Jonathan Polin, managing director of HSBC’s UK intermediary business. As depolarisation of financial advice occurs in the UK market, intermediaries will sell an increasing number of third party funds. Top of HSBC’s agenda is supplying funds tailored to suit them. Mr Polin expects the strategy to lead HSBC’s intermediary business to double profits by 2006 and overtake Fidelity within five years. Major fund launches are planned towards year-end, particularly in single strategy and funds of hedge funds, preceded by an educational campaign. “There is a lot of work to do in rekindling retail investors’ stomach for equity investing,” said Mr Polin. “We also have to show intermediaries that hedge funds are not as dangerous as commonly thought.” HSBC UK already sells small amounts of white labelled products, for example through the Skipton Building Society.