The External Asset Management sector has gathered significant traction in Singapore in the past five years. While the EAM setup has its origins in Switzerland and is deeply rooted and understood there, more and more bankers and clients are getting familiar and comfortable with the EAM arrangement in Asia, Swissquote's Rafael M Weber says in an interview.
Rafael M Weber, how does the Swiss online bank Swissquote differentiate itself from its competitors in Asia?
Swissquote is the leading online bank in Switzerland for retail and affluent clients as well as institutional clients. In Asia, specifically in the booking center Singapore, Swissquote is on a good path to becoming the leading online wealth management custodian of choice for External Asset Managers (EAMs), Multi & Single Family Offices, Private Label Funds and self-directed (Ultra-) High Net Worth Individuals (UWHNIs).
Swissquote Singapore is a good alternative to traditional private banks, offering a broader range of listed and securitized products for a more competitive price while not compromising on safety and service quality. The clients of Swissquote in Asia appreciate that most transactions can be done online without complicated manual processes.
As an online bank, it is sufficient to have a head office in Switzerland. Why is Swissquote nevertheless represented with a branch in Asia?
Singapore has established itself as a major private wealth management hub globally. There is an ongoing influx of (U)HNWIs and Family Offices into Singapore due to its safety, stability, and geographic position. Therefore many Asia-based clients like to book their assets in Singapore.
At the same time, many non-Asia-based clients like to diversify their assets in different jurisdictions and have chosen Singapore to custodize their assets. Swissquote Group Holding is a global company, publicly listed on the Swiss Stock Exchange, with offices in Luxembourg, London, Cyprus, Malta, Dubai, Hong Kong, Bucharest, and Singapore.
In the past years, the international offices have been growing at a fast pace. Swissquote Singapore has established itself in the region and serves as an APAC hub for the Swissquote Group as a wealth management booking center and execution partner.
Are there differences between the trading behavior of the clientele in Asia and that in Switzerland?
Wealthy families from Europe respectively Switzerland are often from the second and third generation where wealth preservation is the main priority. In Asia, a majority of the wealthy clientele is still from the first generation where growth is in their DNA.
Therefore Asian clients are often more inclined towards active trading and taking a certain degree of leverage.
Does Swissquote's offering in Asia differ from that in Switzerland? (If yes, in what way?)
Swissquote Singapore can only deal with Accredited Investors and Institutional Investors while Swissquote Bank in Switzerland offers a wide range of services including eforex, crypto, and robo advisory, and serves the entire range of clients from retail to institutional clients.
Given we deal only with wealthy clients and institutions at Swissquote Singapore, we are a digital wealth management custodian and broker only. Compared to the retail business, our clients are higher touch.
Which products are traded or demanded most here? Has demand changed since the rise in interest rates?
The clients of Swissquote Singapore trade the full spectrum of products from stocks, bonds, mutual funds, options, futures, etc. – depending on the client’s investment strategy and focus. An outlier is Over the Counter (OTC) Structured Products which are significantly more popular in Singapore compared to Europe where most of those products are listed.
The interest rate increase has definitely led to a shift in investment behavior. 18 months ago, most clients did not bother when they had idle cash in their accounts. Nowadays clients are parking their cash in treasuries and money market funds to profit from the higher interest rates.
What is the demand for digital assets in Asia?
Asia was the founding ground for many crypto companies in the last few years. If we look at the trading flow of digital assets during Asian trading hours, we can see that Asia has a large digital asset investor base – in particular in the retail space.
At the same time, more and more (U)HNWIs and Family Offices are starting to allocate part of their portfolio to crypto assets. Singapore and Hong Kong are both important centers in Asia for digital assets. At Swissquote Singapore, we do not offer access to digital assets at the moment. Meanwhile, we see more and more clients seeking exposure to digital assets or clients who derive part of their wealth from profits from digital assets.
What are the next expansion steps in Swissquote's offering (in Asia?)
As we are expanding our business beyond cookie-cutter wealth management accounts, we are tailoring specific offerings for our clients. One example is our partnership with Life Insurance Carriers where Swissquote Singapore is the custodian of the VUL and PPLI insurance policies.
The license to offer digital assets to our clients is currently pending with the Monetary Authority of Singapore (MAS). If we get the license we are looking to offer access to some digital assets to our clients.
In Singapore and Hong Kong, more and more former bankers (customer advisors) are going into business for themselves, setting up independent wealth management firms. What can you offer this clientele as an online bank?
The External Asset Management (EAM) Sector has gathered significant traction in Singapore in the past five years. While the EAM setup has its origins in Switzerland and is deeply rooted and understood there, more and more bankers and clients are getting familiar and comfortable with the EAM arrangement in Asia.
Given that Swissquote Singapore is only offering custody and brokerage, we are perfectly suited to be the custodian for EAMs and Multi-Family Offices since (investment) advice is the core of their business. There is no conflict of interest and we are the perfect partner for independent wealth managers.
We are offering them respectively their clients access to more than 3 million capital market products, a safe custody platform, and an efficient order placement including a digital middle/back office dashboard – all at a very competitive price while not compromising on safety & service quality thanks to the use of technology.
While we have only been active in Singapore for four years, we already work with more than 70 EAMs, MFOs, and Funds.
How innovative are your investment products?
Swissquote Singapore is not promoting or advising on any investment products. Our products are our platform which offers seamless access to almost any capital product product our clients want to trade. Swissquote Group is continuously innovating our wealth management platform and invests every year significant resources to further develop it.
Is there also a demand for ESG/or sustainable online investments? Or is the ESG/sustainability topic just hype?
Given that Swissquote Singapore is not advising clients on any investments, we do not advise them whether they should buy ESG-friendly investments or not. At the same time, we do give our clients the tools at hand to assess the sustainability of their positions as well as their portfolios.
Our clients can see an overall score as well as a breakdown into different ESG components. Swissquote Group itself also takes sustainability very seriously and is very committed to it. Since the year 2020, Swissquote Group has been issuing a sustainability report as part of the annual report.
Rafael M Weber is responsible for all clients in the Booking Centre Singapore for Swissquote. Prior, he did a stint in an American crypto company after having worked for UBS Wealth Management in Singapore & Hong Kong for many years. Rafael has more than a decade of experience advising Family Offices, External Asset Managers and (U)HWNIs in Asia and Europe. Rafael holds a M.A. in Banking in Finance from University of St. Gallen and has also studied in Mainland China and Korea.
