Asian wealth managers see increased client trading while COVID-19 hits new business

Asia’s richest investors, trapped at home by coronavirus travel restrictions, have increased trading activity over the past two months, private bankers said, even as wealth managers face a fall in new client money.

Inflows of funds from new customers in January and February have fallen 10% to 20% in the region, bankers at two European wealth managers told Reuters, adding the trend is likely to continue in the near-term.

Strict travel curbs and the avoidance of social contact is making it tougher for banks including Credit Suisse Group AG, HSBC Holdings PLC and UBS Group AG to bring new wealthy clients on board, six bankers said.

But sources at five global wealth managers, including three of the region’s top 10 by size, said client trading revenue in the region had risen in the first two months of 2020 compared to last year.

Recent extremes in market volatility has encouraged clients to move beyond equity investing and into derivatives and structured products to hedge downside risk, they said.

“There are so many ways we can source investments and come up with different structures for our clients in these volatile markets. Our bankers have been pretty busy,” said a senior Singapore-based banker at a leading Swiss bank.

The bankers did not want to be identified as they were not authorised to speak to the media.

“During this time … since our clients are not travelling as much, they are actually spending more time discussing their investment portfolios with us by phone or video conference,” said Amy Lo, co-head of Asia-Pacific wealth management at UBS.

“We have seen increasing client interest in both our discretionary and advisory mandate solutions since the beginning of the year,” she said, without commenting on the impact of the virus on new client business.

A HSBC spokesman said the lender has not seen any long-term impact on private banking as a result of the virus outbreak, and has made no change to growth targets or hiring plans in Asia – its single largest market for the wealth business.

Credit Suisse declined to comment on the impact of the virus on its new business. It said it was engaging with clients using its digital platforms.

China focus

China’s rich make up the bulk of private banks’ Asian assets, and have in recent years stepped up investments overseas by setting up trusts and family offices – a lucrative business for wealth managers and advisers.

“Those things are not happening as clients are not willing to engage with frontline managers now due to fears of getting infected,” said the Greater China head of a European private bank. New business has been hit as a result, the banker said.

Researcher GlobalData last week said China could see 2.6% individual wealth growth in 2020, the slowest pace since the 2008 financial crisis, if virus containment measures continued in the second quarter.

Asia-Pacific was home to the most billionaires in 2018 with 754 holding $2.5 trillion worth of assets. China alone is currently the world’s second-largest territory by number of billionaires, showed a UBS and PwC report.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.