Eastern clients fear Western influence
Wealth managers may be right to move some key personnel into Asia, but rebalancing portfolios provides a greater challenge
Recruitment consultants are enjoying themselves in Asia. Western European operators are increasingly finding work in the financial centres of Singapore and Hong Kong, while their old stomping grounds of Geneva and Zurich are becoming too quiet for comfort.
Bankers and wealth managers moving out of Europe into Asia are making life sweet for the headhunting middlemen, looking to place whole teams happy to escape increasing tax and regulatory burdens, while benefiting from a significant and instant spike in quality of life.
Talented staff are also being tempted away from posts in Malaysia, Korea and Indonesia to shore up Singapore’s limited pool, reports Sophie De Ferranti, recently appointed head of private wealth management at recruitment specialists Execuzen.
Significantly, Julius Baer, one of the Swiss banks to have come out relatively unscathed from the recent crisis, has based its chief investment officer, Dr V Anantha-Nageswaran – understandably known as ‘Dr Van’ to colleagues and clients – in the city state of Singapore.
Dr Van, who is very much plugged into the global expatriate Indian community, which includes some key asset managers and financial operators, also sees a strong movement of staff from West to East, with many feeling unsecure of employment prospects in London and willing to move to a growing, developing region.
He does not dispute their timing, believing they are making the right long-term bet. But timing in tactical asset allocations of investment portfolios is another matter. Yes, emerging markets should be at the core of private client strategies, but there should not be any headlong rush to reshape portfolios, believes Dr Van, as equity valuations are currently not particularly attractive. However, he does believe opportunities in Thailand are particularly interesting.
Too focused on region
For many Asian-based private banks, the problem is private clients with too much allocated to their region. HSBC Private Bank in Hong Kong has a tough time persuading wealthy customers to push some assets to so-called ‘developed’ areas of the world, such as Europe and US, for diversification purposes. Indian banks find this even harder.
There is also growing support behind the theory that investors should search for global companies with increasing exposure to the Asian continent, rather than local players, hampered by valuation, balance sheet and interest rate problems. But some Asian fund houses believe there is a lack of transparency in ‘global’ funds, claiming high Asian exposure, while failing to provide it in reality.
Which products are being used to access growth is also a subject of hot debate. Do exchange traded funds offer a quick, cheap, easy and safe route into emerging markets? Or do they actually add concentration risk and expose investors to undiversified bets?
