SINGAPORE: The global wealth management industry has taken a beating from the economic downturn. For the first nine months of this year, assets under management shrank between 10 and 15 per cent compared to last year.

Industry players said banks cannot use a one-size-fits-all approach that has been used in the past.

They said private banks need to focus more on individual customer needs in the current difficult climate.

Private banks in Asia stand to emerge from the current financial turmoil in a stronger position than their Western counterparts.

Experts said that banks from China, Singapore and Japan are among those that will be the global players when the financial crisis is over. And their target market of wealthy individuals is set to grow in the years ahead.

The number of high net-worth individuals in Asia is set to surpass those in Europe by 2012.

But a survey by Standard Chartered has shown that over 60 per cent of these invest up to half their wealth in their own businesses and not with private banks.

To capture more of this market, observers said private banks in Asia need to focus on the commercial banking needs of such individuals as well as their business requirements.

Peter Flavel, global head, Standard Chartered, Private Bank, said: "Their family and their broader family mix both their personal assets and their business assets. So if you're really going to look after the personal wealth of these clients, you have to do it in conjunction with their commercial banking needs."

Market watchers said that large private banks will face increased competition from smaller firms that can offer tailored solutions for clients.

John Evans, editor, Private Banker International, said: "There will be many suppliers of wealth management services - as well as private banks - independent financial advisory companies, small boutiques, specialist hedge funds, the better hedge funds that survive the credit crisis, family offices that administer the wealth of very rich dynasties."

To stay competitive, private banks have to go back to their roots and focus on providing more client-based offerings. - CNA/vm