Wealthy remain steady despite pandemic risk

Although the Covid-19 pandemic has led ultra-high-net-worth individual (UHNWI) investors in Asia to perceive markets as increasingly dynamic and segmented, 70% of Thai UNHWIs have not changed the time horizon characteristics of their portfolios, according to a Lombard Odier study.

Some 87% of Thai UHNWIs believe the availability of extra financial services has influenced their choice of bank, with treasury management capabilities, access to real asset opportunities, and ability to be connected with entrepreneurs the top three services ranked as very important, according to the study.

When it comes to choosing a private bank, 69% of Thais cite sustainability as one of the top three factors, the second highest among the countries surveyed after Japan.

Lombard Odier, together with five key strategic alliances across Asia including Kasikornbank (KBank) Private Banking, has launched a comprehensive study titled “Connection, Transition, Transformation: Engaging Asia’s UHNWI in the New Normal”, with 150 UHNWIs domiciled in Thailand, Singapore, Indonesia, the Philippines, Hong Kong, Japan and Taiwan participating in the study.

In terms of assets, some Asian UHNWIs have decided to adopt a rather conservative bias: turning to traditional safe havens such as gold, the Swiss franc, the yen and sovereign bonds, according to the study.

“Other Asian UHNWIs think it is a time of opportunity, placing more interest in private equity and private debt as a low interest rate is expected to remain for a long time,” said the study.

“The disruptions and impact of the pandemic are manifold, and have forced leading families and entrepreneurs in the region to rethink everything. One thing is clear — UHNWIs have reflected a strong desire for a trusted local adviser that helps them navigate and access markets they can no longer travel to easily, and for banking relationships with banks that are aligned with their principles and convictions,” said Vincent Magnenat, chief executive of Lombard Odier Asia.

Jirawat Supornpaibul, head of private banking at KBank, said four actions are needed for clients to navigate the new circumstances. These include accelerating the digitalisation of communications and touchpoints; continuously providing education on risk-based investment strategies and implementing risk management instruments across all products; doubling down on strengthening service offerings outside the area of capital markets; and demonstrating the medium- to long-term tangible returns of sustainable investment and introducing new products.