In a world of low commissions, zero custody fees, and no charges on data access, Greg Baker, CEO of brokerage firm Charles Schwab Singapore, shares with finews.asia his plans for growth in Southeast Asia.
Greg Baker, how does Charles Schwab Singapore intend to grow its financial advisory business?
Although we do not offer financial advisory services in Singapore currently and have no immediate plans to launch our financial advisory business in Southeast Asia, we are evaluating opportunities to introduce this advisory service to investors in Singapore and the Southeast Asia region (SEA).
Charles Schwab Singapore has the license to provide research reports to our customers, and we aim to expand our suite of investment services to clients in Singapore and the SEA region in our next phase of growth.
«We have seen an uptick in customers approaching Schwab Singapore with sizeable asset portfolios»
This includes the provision of direct advice either through «one to one» interactions or a robo-advisor via the Schwab Intelligent Portfolios, both of which are services available to our clients in the U.S. Ultimately, we want to empower investors to achieve better financial outcomes – be it through advice, research, or education.
As private banks raised the entry requirements for high net worth clients to about $3m, how much has your firm benefitted due to this move?
The banks have been raising the minimum asset sizes for which a private bank relationship can be established, and we have already seen the benefit of this move.
While we do not record, and in most instances, customers will not share the exact reason why they have moved from one provider to another, anecdotally, we have seen an uptick in customers approaching Schwab Singapore with sizeable asset portfolios being transferred from private banks.
By providing low commissions, zero custody fees, and no charges on data access, do you think such offerings are sustainable?
Our business model is relatively simple. It revolves around the Golden Rule: If we treat prospects and clients the way we would want to be treated, they will choose to start a relationship with Schwab and do more business with us.
«We’re focused on broadening our client base in Singapore and Southeast Asia»
This will contribute to stronger financial results and greater investments, which in turn fund actions and innovations for Schwab to make investing more affordable and accessible for investors.
What makes you convinced you can grow the firm's assets under management in this region?
Investors in Singapore and the region have a certain exposure to the international market to diversify their portfolio, but their current exposure to international markets is often limited due to high transaction fees and insufficient understanding of how to access the U.S. market.
We believe that the U.S. market provides a critical opportunity for portfolio diversification as it is the largest and most liquid market in the world.
Following the launch of Charles Schwab Singapore in November 2017, we’re focused on broadening our client base in Singapore and Southeast Asia to help improve the financial well-being of more investors by expanding access to low-cost, high-quality and transparent money management and investment advice.
We have seen quality growth over the past 18 months since our launch, with a 123 percent rise in client assets under management and a 9.1 percent increase in active brokerage accounts with us.
Greg Baker is the CEO of global wealth manager and brokerage firm Charles Schwab in Singapore.
