UBS AG, Switzerland's largest bank, is putting more focus on its richest clients in Asia and bringing its investment bankers closer to asset managers to meet their demands.
Wealth managed for clients with at least 50 million Swiss francs ($51 million) of assets will grow annually by about 10 percent to 20 percent in the region over the next three to five years, Carlo Grigioni, vice chairman of wealth management at
UBS in Singapore, said in a Sept. 28 interview.
“If you look at what happened in Asia over the last 20 years, there's incredible wealth creation so this is probably going to become a very, very important piece of segment,” Grigioni said. “That's why we have brought the wealth management business and the investment bank closer.”
The number of ultra-rich Asians climbed 37 percent in 2009, about double the global pace, according to Capgemini SA and Merrill Lynch Wealth Management, as the region led the global economic recovery.
UBS will add advisers in Asia to match the growth of its richest customers, Grigioni said.
UBS, Switzerland's largest bank, manages 300 billion Swiss francs globally on behalf of the ultra rich. About a third of its 1,000 client advisers in the Asia-Pacific region cater to these clients, drawing on
UBS's investment banking resources.
480 Advisers
The bank, the world's second-largest wealth manager in 2009 after
Bank of America Corp., employs 480 client advisers dedicated to its ultra-rich clients, according to Grigioni. They each manage an average of $450 million and the bank is looking to increase that figure to $500 million, he said.
Grigioni said the richest customers typically invest globally and have a better understanding of economic and investment opportunities than other investors. “It's like the BMW 300 and BMW 750,” he said. “It's a different league.”
Advisers work with corporate finance teams on large asset sales, mergers and acquisitions, and initial share offerings, as well as issues like the transfer of wealth and businesses over generations, Daniel Harel, UBS's head of private banking for ultra-rich clients in South Asia, said in the same interview.
“You would need to have the economies of scale and infrastructure in place, which is basically a big private bank on one side and a big investment bank on the other side to be able to make this business a viable one for both the client and the bank,” said Harel, an investment banker for 17 years before his appointment to his current role in September last year.
Rising Rich
The number of ultra high net worth individuals -- people with at least $30 million of investible assets -- in Asia- Pacific rose 37 percent to 19,600 last year, and their wealth grew 43 percent, Capgemini and Merrill Lynch Wealth Management's report showed last week.
UBS appointed Amy Lo to run ultra high net worth business in Asia-Pacific from Jan. 1, according to an internal memo obtained by Bloomberg News today. Lo is currently regional market manager and head of ultra high net worth in Hong Kong. The region currently accounts for 30 percent of UBS's managed assets for the ultra-rich.
Serving the very wealthy isn't without its perils, Gerard Aquilina, vice chairman of
Barclays Plc's wealth management unit, said last month. The richest clients often have “impossible” requests, narrow margins and trigger internal conflict with investment banking colleagues, he said.
Grigioni said these clients are extremely demanding, needing extensive research and advice, with some expecting lower prices. Margins across-the-board have dropped “dramatically” in recent years as clients seek less leverage and more conservative investments, he said, while adding that their business remains important.
“You can't be complacent, you can't let it go,” Grigioni said. “If you can provide solutions which are perceived by your clients as value added, really something which is great, you can ask the price for it and most of the people will pay.”
