The name of the game in wealth management
Personalized service:
YEARS of robust economic growth have given rise to a middle-class with increased disposable incomes. Some of these incomes are splurged on consumption and luxury items, while some are put off in savings accounts for good use. But with measly interest rates, who would want to let their cash sit idly by? What better use is saved cash for?
Enter wealth management. Wealth management offers customized financial products and services such as investment, financial planning, portfolio management, and other trust service requirements for the affluent segment of the market. The operative word is affluent, meaning those who has net worth of at least P1 million.
The country’s big banks have already been servicing the affluent segment of the market for quite some time.
Sy-owned BDO Unibank, Inc. solidified its commitment to the upper segment of the market after its acquisition of the high-end Banco Santander Philippines, Inc. (BSPI), the local unit of Spain’s largest bank, in 2003 to become BDO Private Bank, Inc. Its assets under management (AUM) reached P300 billion by end-2017.
“We provide the service to high net worth individuals such as businessmen, professionals, heirs, retirees and wealthy families who may have investment, estate planning, financial planning, portfolio management, philanthropic and other trust service requirements,” said Stella L. Cabalatungan, executive vice-president and BDO Private Bank Relationship Management Group head.
Meanwhile, Ayala-led Bank of the Philippine Islands (BPI) spun off its asset management and trust group to a standalone trust corporation in 2016 called BPI Asset Management and Trust Corp. (BPI AMTC) — starting its operations in February 2017. As of December 2018, BPI AMTC’s has over P590 billion AUM.
BPI AMTC offers customized wealth management solutions like Personal Management Trust (PMT) and Investment Management Account (IMA) depending on its clients’ needs.
Sheila Marie U. Tan, BPI AMTC president and chief executive officer, said that for P1 million, “a client may open a PMT and set personalized arrangements to meet his requirements and purposes, such as provision for living expenses, income distribution or payment of educational expenses.”
A client can opt for an IMA if one wanted an account for income accrual and growth.
“It is the best way to gain access to a wide range of financial instruments, and effectively be able to diversify his/her portfolio,” Ms. Tan said.
“Clients may also opt to have their accounts managed by portfolio managers who implement rigorous investment strategies to deliver the best risk adjusted returns and to meet clients’ financial goals,” Ms. Tan added.
Meanwhile, Security Bank Corp. started servicing the upscale market in 2016.
Binky R. Mirabueno, first vicepresident and Wealth Management head at Security Bank, said the bank “onboards” customers who have at least P10 million relationship balance, which can be a mix of deposits and investment products, to its wealth management services.
“We ensure that this mix is equitable and well-diversified to reduce the overall risk of the portfolio,” Ms. Mirabueno said. NOT YET ‘WEALTHY’
For those who are still building their wealth, banks and trust companies offer a slew of various financial solutions to get them covered.
“We will also provide our services to emerging wealthy and next-generation high net worth individuals by educating them from basic Investment 101, investment advisory and actual execution of their investment decisions,” said Juan Sabino P. Lizares, senior vice-president and head of BDO Private Bank Wealth Advisory and Trust Group.
Security Bank’s Ms. Mirabueno said that the bank has an array of investment products that have lower minimums.
“Profiling is key. We ensure that the product we offer to each customer is compatible to where they are in their life stage and their appetite for risk,” she said.
BPI AMTC’s Ms. Tan said clients who are not yet ready to avail of its wealth management products may take advantage of unit investment trust funds (UITFs).
For as low as P10,000, clients may choose and diversify their UITF portfolio that consider different strategies, risk profiles, investment horizons, markets, and currencies.
Ms. Tan said they can also help clients build up their wealth through their Regular Subscription Plan (RSP).
“With RSP, clients may set their subscription schedule either monthly or quarterly and these will be electronically processed for them. There is no difficulty in sticking to their schedule, timing the market manually processing subscriptions.”