The document discusses distribution considerations for private banks in Asia and Singapore. It notes that Singapore is positioning itself as a wealth hub for Asians due to growing Asian wealth, its business environment, tax regime, and political stability. Emerging markets are expected to represent 37% of global millionaire wealth by 2017, with Asia surpassing other regions in creating $7 trillion in new wealth. Key findings regarding investment behavior in private banking hubs show large cash holdings and popularity of commodities/gold in Asia compared to other regions. Success in distribution requires a focus on performance as well as advisory services, information sharing, and processes to meet client needs.

1. Distribution considerations for
Private Banks in Asia & Singapore
March 2014
Prepared by Eric Chua, eric.chuakh@yahoo.com

2. Singapore as a Wealth Hub
• Growing wealth
of Asians
• Business
environment, tax
regime, political
stability
• Government’s
support as a key
regional financial
hub to be the
“Switzerland of
Asia”

3. Emerging Markets will soon represent
37% of global millionaire wealth
• No. of millionaires
to rise 30% to 16
million
• Over next 4 years,
Asia to surpass
other regions by
creating USD 7
trillion in net wealth
• Regulations
continue to shape
offshore vs onshore
private banking

4. Investment behaviour in Private
Banking Hubs - by asset class

5. Investment behaviour in Private
Banking Hubs – key findings
• Large cash portfolios in Asia
Private banking clients in Singapore currently invest around half their assets in cash funds. In Hong Kong
this share is around one third, and around one quarter in Switzerland.
• Commodities and gold popular in Asia
The share of assets (excluding cash) invested in commodities, gold or precious metals is 28% in
Singapore and 14% in Hong Kong. In Switzerland this share only amounts to 8%.
• Popularity of shares varies in Asia
The proportion of assets (excluding cash) invested in shares is 61% in Hong Kong but only 47% in
Singapore.
• Swiss tend to back bonds
The share of assets (excluding cash) invested in bonds amounts to 18% in Switzerland. In Hong Kong this
share is just 14%, and only 13% in Singapore.
• Low diversification also common in Asia
67% of interviewees in Singapore do not have sufficient diversification, i.e. less than four asset classes.
In Hong Kong this group accounts for 45%, and in Switzerland for 53%.

6. Key Considerations for Success in
Distribution
• Performance is key, but advisory, information
sharing and process is increasingly important as
part of client delivery
• Due to competition in Asia, there is a need for
innovation and thematic for selling . Key themes
in 2013 – RMB, High Yield Income
• Impact of local regulatory and market changes
have created need for ground level support,
frequent feedback on product performance, fund
updates, specialist speakers

7. Market Trends – How and What is
selling, Big versus Focus

8. Service Expectations –
Helping Private Banks sell
• Response time and quality of materials
Private banks expect superior information delivery. Either be the first out of the gate or offer
specific analytical value that private banks are willing to wait for.
• Technical knowledge
With more complex investment themes, local staff needs to have the technical knowledge and
communicate it in a simple and tailored way. Asia sees greater needs for product specialists and
advisory across vehicles.
• Local presence
Local staff, language ability and access is key for private banks in Asia, especially with an ever
increasing complexity in bridging local, regional and global demands.
• Understanding of needs
As private bankers develop a greater understanding of their clients, asset managers need to better
understand the needs of multiple relationships, including gatekeepers, platforms and advisors.
• Brand and exclusivity matter, especially for private banks in Asia
One of the biggest success factors post-crisis with private banks in Asia has been around brand
equity.