Standard Chartered aiming at global Indian wealth

In a time of cost cutting and strict performance measurement of private bankers, Standard Chartered, the third biggest UK bank by market capitalisation behind HSBC and Barclays, is one of the few wealth managers going on a shopping spree for new talent. The group plans to hire another 100 relationship managers globally to arrive at a total of 450 within 12 months across Europe, Asia and the Middle East to supervise global assets of $30bn (E21bn) being rapidly boosted by new inflows. The current operational platform, including offices in Switzerland and the Channel Islands, will support assets double this size. The bank has strengthened its Global Indian Team in London by adding a new leader, Rina Bijur, while Prashant Ajitsaria will focus on recruiting ultra high net worth global Indians. Both were poached from Citibank, which was the first to identify the non-resident Indian (NRI) market, with a particular powerbase in the Arab Gulf states of the Middle East. Marianne Hay, until recently CEO of European wealth management at Citigroup, has joined as head of private banking, Europe, Americas and Mena. The expansion of staff is needed to handle all the new business coming in, with the bank calculating that the global NRI market for high net worth individuals is growing by 15 per cent annually alone. “This is a natural group for us to reach out to,” remarks Steve Seagrove, a 13-year veteran of Standard Chartered, now responsible for running the European region from offices in London’s Jermyn Street, close to the Ritz Hotel. “After all, the bank opened its first branch in Calcutta in 1853.” Following the acquisitions of Amex last year and Grindlays earlier in this decade, he oversees 45 private bankers in Europe, expecting it to grow to 60 by the end of the year. “We are talking to individuals and we are able to recruit them. These are names that a couple of years ago would not have considered us, volunteers Mr Seagrove. “But if clients are keen on being with banks with strong balance sheets, relationship managers see that and know that and are keen to join us.” While the trend among many London-based private banks is increasingly for plain, low-risk products, the needs of Mr Seagrove’s clients can be slightly different, with “moderate” portfolios currently allocating 25 per cent to bonds, 50 per cent to equities and 25 per cent to alternatives. “We are offering a whole range of international products to our client base,” he says. “They are very sophisticated and interested in investing across a variety of markets. They are very aware of Asia, the Middle East and Africa, where there are also large numbers of NRIs.” It is a characteristic of these clients, typically first or second generation Asian entrepreneurs, to look at investments on an international basis. Unlike most competitors, Standard Chartered concentrates almost exclusively on the advisory model. “These people are much less comfortable with giving a mandate to a discretionary manager, so we don’t offer that here,” says Mr Seagrove. Most clients typically hold a core investment portfolio through the long-term cycle, with relationship managers then tipping them off about shorter term ideas, such as structured product bets linked to commodities or currencies, in the satellite segment. But clients don’t just come to Standard Chartered to enhance their portfolios. There is also the basic notion of safety, with financial strength making a lot of wealthy investors more conscious of the brand than in the past. And Mr Seagrove will do his best to encourage this growing familiarity. “Where we can see client groups that can benefit from our strengths, we’ll make a push,” he says, seeing the internationally minded Indians coming to London as the single-biggest opportunity for the bank in Europe, mirroring the initiative to attract Global Koreans in Asia. The increasingly international focus of the bank also helps attract private clients. “There have been some key changes to our model. We are now a global private bank and that helps a lot in attracting cross-border flows of business. This was not the case in the mid 1990s,” he says. Not having any proprietary products is also seen as a huge advantage by Mr Seagrove, who is not subject to the usual demands prevalent in private banks, of intense and prolonged pressure from group manufacturers to accommodate their products. “Some clients ask us if they can buy our funds, but we don’t have any. Everything is open architecture. We believe the best positioning for our clients is to provide them with the best products around.”