FINANCIAL HEALTH
The next generation of wealth in Asia wants holistic advice rather than transactional product pushers. Alex Fung of Vontobel says the Swiss wealth manager is a good match for the new way of doing things
Clients no longer want a transactional relationship with a wealth manager who only calls them when a new product comes on to the market and presses them for a decision. Instead, they want a relationship based on trust, where the adviser will take the time to understand their requirements and risk appetite, and will work with them on a plan for preserving and growing their wealth. That’s exactly what Vontobel, a Swiss wealth manager, does.
Alex Fung, Vontobel’s chief executive and head of wealth management for Asia Pacific, says his organisation is taking advantage of these changes in the market in a number of ways, including diversification, lower costs compared to most other wealth managers in Asia, and its unique threealpha model, which is based on asset allocation, conviction and thematic investments, and opportunities to benefit from short-term disturbances in financial markets.
A GROWING TREND TO DIVERSIFY
Traditionally, Asia’s original, or first-generation, wealth creators have been happy to invest locally in things they were familiar with. They didn’t need external advisers to tell them about deals they could do in the property market, for example. They were confident they knew all about them already.
The transfer of wealth to the next generation, which is well under way, is to people that are much more internationally minded. They travel widely and many were educated overseas in places such as Europe, North America or Australia, and are therefore happy to diversify their portfolio by investing outside their home countries. However, while they may be eager to catch investment opportunities abroad, they can’t know about each and every one, which is where wealth managers such as Vontobel come in.
“This is also where a major trend has evolved—clients become more inclined to delegate and to discuss discretionary portfolio management, and much more willing to pay a fee for it,” says Fung.
PLATFORM IN ZURICH
Vontobel is also different from other market players in Asia because it doesn’t maintain a booking centre in the region and offers only Swiss accounts. Fung says that’s a plus for anyone interested in diversification.
“We have real-time client servicing capability in Asia,” he says. “It’s all connected in real-time to our platform in Zurich. This is one of the attractions for diversification, not only in terms of investment but also domicile of client’s capital in an historically safe country and city. By not having a heavy cost platform in Asia, our cost structure is much lighter.”
This approach means Fung’s team aren’t under pressure to call clients to sell them products. “If you have a more moderate cost, you don’t need to encourage transactions,” says Fung.
But what Fung really wants Vontobel to be known for is its trusted adviser model. Just as families rely on a doctor or lawyer that has perhaps attended to them for generations, he says they should be able to do the same with their wealth management adviser.
“Health is paramount, but financial health is equally important,” he says. “Clients need someone they can trust to advise on investments.”