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Private banks get familiar to woo ultra-rich

As more private banks jostle to manage the wealth of the top one per cent of income earners in Singapore, some are wooing their top clients by getting to know more generations of the family.

SINGAPORE: Singapore has 1,355 ultra-high net worth individuals, the sixth largest number in Asia, with a combined total wealth of US$160 billion.

According to the Wealth-X and UBS World Ultra Wealth report released in 2013, Singapore ranked sixth after Japan, China, India, Hong Kong and South Korea.

As more private banks jostle to manage the wealth of the top one per cent of income earners in Singapore, some are wooing their top clients by getting to know more generations of the family.

Ultra-high net worth individuals are typically defined as those with at least US$30 million in net assets.

Their numbers in Singapore, and correspondingly their wealth, have increased in the last year alone.

In 2013, there were 50 more ultra-high net worth individuals than the previous year and a US$5 billion increase in wealth over the same period, according to the 2013 report.

Even relatively “new” players in the private banking scene have been reaping the rewards.

“Since we launched Bank of Singapore in Singapore in 2010, we've more than doubled our earnings asset base, our AUM (assets under management) at the close in March was at S$49 billion and we saw 11 per cent growth year-over-year,” said Olivier Denis, senior managing director of the Bank of Singapore.

“Entrepreneurs are growing, Asia is booming; that is a lot of wealth that is created. (There is) a lot of opportunity, so we need to be equipped from a product and people point of view.

“We engage the customers past the financial aspect with their business in social events, in concerts, sports events, arts events, fine dining. We do that on a regular basis."

With many private banks eyeing the same pool of ultra-high net worth individuals in Singapore, some are differentiating themselves through other means.

Instead of simply organising social events and experiences, some banks are focusing on protecting and expanding the inter-generational wealth of these ultra-high net worth families.

"It's also important to build relationships with the family because money is moving from one generation to another and if you don't build relationships with the second generation today, that money won't stay with you,” said Rajesh Malkani, head of private bank for Southeast and Northeast Asia at Standard Chartered Bank.

“In fact, data suggests that private banks lose 40 per cent of AUM when money transfers from one generation to the next, if they haven't made efforts to build relationships with the second generation. We have seminars, workshops and courses for the second generation where we encourage them to come work with us, so they understand the business and to help them understand the investment businesses of the world."

This is a view shared by other bankers.

"The clients that we have, a lot of them are Asian and South Asian entrepreneurs. They have the money to enjoy the good things in life,” said Sandeep Sharma, co-head for Southeast Asia at HSBC Global Private Bank.

“We try to provide them with experiences and formats to engage that money can't buy, like structuring programmes for the next generation of the family, creating an engagement within the group of next generation family members."

Private banks say their investment in organising such workshops and special events for the ultra-wealthy is likely to increase year-on-year. 

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