«Over the last five years, we have positioned and established Swissquote as a traditional private banking alternative in the region. We are now working with around 70 MFOs and EAMs mainly based in Singapore and Hong Kong,» Swissquote's Rafael Weber says in an interview.
Rafael Weber, what is the current state of Singapore's multi-family and single-family office sector?
Family offices (FO) in Singapore are experiencing steady growth despite the recent turbulences. This growth is fueled by the city-state’s position as a premier financial hub, its conducive and stable regulatory and political environment, and the increasing wealth accumulation in the region, particularly among ultra-high-net-worth (UHNWI) families and their next generation.
Families are increasingly recognizing the benefits of having a dedicated team to manage their assets, provide investment advice, and handle estate planning, wealth planning, and philanthropic endeavors. The requirements to set up a Single Family Office (SFO) or Multi Family Office (MFO) in Singapore have increased. We see this as a positive development for the financial hub of Singapore.
Over the years, SFOs and MFOs have adapted to meet the evolving needs of their principals/clients, and they seek not only sophisticated wealth management solutions but also cost-effective, timely service and readily accessible digital platforms with good connectivity and access to a wide product range.
How has the regulatory environment in Singapore evolved to support the development of the family office sector?
The Monetary Authority of Singapore (MAS) has implemented frameworks and incentives tailored to the needs of family offices, and to ultimately promote the growth of the wealth management sector in Singapore. This includes the Variable Capital Company (VCC) framework, which provides a flexible and efficient vehicle for the pooling and management of assets.
The Section 13O and U incentive schemes and Philanthropy Tax Incentive Scheme, also introduced by the MAS, offer tax benefits to family offices who qualify under the stipulated criteria. The Global Investor Programme (GIP), administered by the Economic Development Board, accords Singapore Permanent Resident (PR) status to eligible global investors, including family office principals and their families, who intend to drive their businesses and investment growth from Singapore.
The regulator has also enforced tighter measures on family office applicants in the wake of a recent high-profile money laundering case, which strengthen Singapore’s position and attract more ultra-high-net-worth families who wish to use Singapore as a wealth management hub.
This will strengthen Singapore’s reputation as a safe and transparent jurisdiction of choice for family offices.
Can you provide an overview of Swissquote Singapore's business model?
Swissquote Singapore is a digital wealth management custodian offering a state-of-the-art online platform to access more than three million capital market products and fast trade execution to MFOs, external asset managers (EAMs), funds, and self-directed (U)HNWIs.
Swissquote Singapore’s key advantages include our reliable and safe platform, broad product range, and competitive pricing, combined with high-quality service. We do not provide investment advice and work on an execution-only model.
There is hence no conflict of interest with our institutional partners, who already offer sophisticated, bespoke investment advice. Our business model has worked well for us and our clients. We have grown in sophistication for the types of accounts that can be opened with us.
Other than individual/joint accounts, we can also open entity accounts for private investment companies and operating companies, funds (including VCC sub-funds, SPCs, et cetera) and trusts. In more recent years, we also expanded our business offering to open custody accounts for Variable Universal Life (VUL) and Private Placement Life Insurance (PPLI) policies, and investment vehicles such as the Actively Management Certificates (AMCs).
How has Swissquote Singapore achieved growth in recent years?
We only started business operations in late 2019 just before the pandemic started. When countries, including Singapore, started to go into lockdown due to COVID-19, people had to suddenly adapt their lives and businesses to become digital.
The private wealth management space in Singapore started to see the gaps in the traditional private banking space. In our conversations with EAMs and clients, it was evident to us that they now see the importance of having a strong online platform so their trading and investments are not disrupted.
Over the last five years, we have positioned and established Swissquote as a traditional private banking alternative in the region. We are now working with around 70 MFOs and EAMs mainly based in Singapore and Hong Kong. We have seen a well-diversified and steady growth, particularly in the last three years.
The current year has also started very well and has so far exceeded our ambitious expectations. We are optimistic to further expand our business in the region.
How is Swissquote Singapore applying technology to support MFOs in digitalizing their processes?
MFOs, like most other businesses, are impacted by inflation and higher costs from services to labor. Swissquote’s platform has helped many of our partners to run their business more cost-efficiently by using technology whenever possible. Swissquote’s platform delivers excellence in execution, safety, and technology.
We have digitalized most processes which are still done manually at traditional private banks. Our clean and user-friendly asset manager interface goes beyond just standard software. We use our understanding of what makes their business tick to develop tailor-made, tool-based solutions and services that cater to EAMs and their clients.
This includes collective client management (group orders, multi-strategy management, direct connections to the global stock markets, online transactions for all listed products (three million capital market products from stocks, fixed income instruments, options, futures, funds, and open architecture for structured products)).
How does Swissquote Singapore assist asset managers in increasing their share of wallets through life insurance wrappers?
We serve, as a custodian for VUL and PPLI policy accounts. The client pays a policy premium in the form of cash and/or bankable assets, as accepted by the insurance company, into the Swissquote policy account.
The EAM will be able to manage the investments of the policy via our cost-efficient platform. By offering custody accounts of such insurance policies, we enable our EAMs to manage more of their client’s assets efficiently through Swissquote.
How do actively managed certificates (AMC) offered by Swissquote Singapore help asset managers provide more value to their clients?
Swissquote Singapore can open accounts for actively managed certificates (AMCs) which are investment products that offer flexibility for customizable investment strategies. With a typical launch size that can start as low as $2 to $5 million and without the need for a fund administrator, AMCs are more cost-efficient to set up which is a great alternative for the asset manager as compared to a fund.
There are many benefits to setting up an AMC – it allows asset managers to efficiently manage a pool of all their investors’ monies, and it allows them to build a track record without the high costs of setting up a fund. It also enables an asset manager to manage a portion of an investor’s money who may not be willing to give the asset manager a limited power of attorney to his entire investment account.
We selectively partner with reputable providers who offer the AMCs off-balance sheet (thereby eliminating issuer risks) and bring this offering to our network of EAMs. Effectively, through Swissquote, EAMs can leverage on our services and platform to expand their client coverage and generate more revenue.
What features or tools does Swissquote Singapore offer that enable asset managers to deepen client relationships?
Our custody and execution-only platform simply gives the (Multi) FOs more time to focus on what they are good at, understand their clients, and manage the (financial) assets and other needs of the clients in the most efficient way.
Rafael M. Weber is responsible for all clients in the Booking Centre Singapore for Swissquote. Before that, he did a stint in an American crypto company after having worked for UBS Wealth Management in Singapore & Hong Kong for many years. He has more than a decade of experience advising Family Offices, External Asset Managers, and (U)HWNIs in Asia and Europe. He holds an M.A. in Banking in Finance from the University of St. Gallen and has also studied in Mainland China and Korea.
