UBS plans to hire 100 wealth management client advisors over the next two years in Hong Kong, going after a bigger slice share of the mid-tier millionaire segment. Is it a bold move or one that will dilute the brand?
The Zurich headquartered wealth giant has been here before. A decade ago prior to the global financial crisis UBS in Asia had dabbled in the mass affluent space.
News service «Reuters» reports that UBS is sharpening its focus on the middle of the wealth market, an ultra competitive hinterland especially if your bank does not have an integrated pan-Asian retail network from which to feed.
Threshold Up or Down?
The move comes as competitors in the region including Standard Chartered are raising the threshold for their private banking clients amid growing competition from regional players.
In 2016 J.P. Morgan doubled its target client segment to at least $10 million in Asia, while Standard Chartered's private banking business plans to raise the threshold from $2 million to at least $5 million over the next two years.
Meanwhile, regional banks with well established mass affluent offerings including DBS have bolstered their presence in the millionaire segment via acquisitions.
Untapped Opportunity?
«For us, the sweet spot is high-net-worth clients with investable assets of between $2 million and $50 million,» Jean-Claude Humair, regional market manager for Hong Kong at UBS, told Reuters.
«We see tremendous untapped opportunity in the entrepreneurs segment in Hong Kong,» he said. «The plan is to hire 50 client advisors in Hong Kong every year for the next two years to cater for these high-net-worth individuals (HNWIs),» Humair added.
How to Grow Asia's Largest?
With $292 billion worth of client assets as of end 2016 and about 1,100 client advisers, UBS is the largest private bank in Asia, followed by Citigroup and Credit Suisse Group as finews.asia recently reported.
UBS is shifting focus because the mid-segment is growing faster than the top-tier, or the ultra-high-net worth segment, which the bank classifies as individuals with more than $50 million in investable surplus.
The high-net-worth business offers a better return on assets than that offered by the ultra-rich segment, UBS's Humair said. The bank already covered three out of five billionaires in the region and almost 90 percent in Hong Kong, he added.
Its About The Numbers
One key component in the growth of the wealth business is the number of client facing asset gatherers, the often maligned relationship managers (RM's).
Without a motivated army of RM's any bank will find growth tough. They also require a large suite of services and products to compete. UBS has more than most both in terms of product and RM's.
But another key in the war for talent is the Swiss institutions growing number of educational facilities in Singapore, Taiwan, Hong Kong and now China. This asset could prove to be a vital component in the race to the middle.
