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SINGAPORE: According to industry players, the wealth of rich Asian individuals is set to grow at a compounded rate of 12.8 per cent over 5 years till 2013.
The fall of Lehman Brothers and the financial crisis sliced a quarter of the wealth of high net worth individuals. The prospects for Asia, however, still appear to be relatively bright.
Private banks are expected to boost their expertise in order to capture the opportunities arising from a higher demand for wealth management services.
It is estimated that Singapore would need 900 to 1,200 experienced private bankers over the next 5 years.
"The next step is really compulsory certification, for young bankers coming into the industry and then an on-going certification process, not so much taking exams but being educated as an on going process, for existing bankers," said Christime Ong, managing director & CEO, UBS Wealth Management, Singapore.
Experts told a regional industry seminar in Singapore that pay structures for relationship managers will need to be overhauled, by reviewing bonuses and rewarding staff based on indicators like client satisfaction and investment performance, and less on fixed financial targets.
Observers have said that compliance costs in private banking may rise at least 30 per cent due to more documentation and risk management work.
"There is a risk from a litigation standpoint because clients are upset about the quality of advice that they have been given, and from that comes the regulatory and tax risks that banks will have to deal with," said Justin Ong, Partner, PricewaterhouseCoopers LLP.
There have been concerted efforts to raise the standards in the banking sector, but some industry players fear that the faster than expected pick up in the financial markets might lull banks and their clients into complacency and cause them to fall back on old ways.
- CNA/sc
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