ASSET MANAGERS will have to adopt new strategies to face competitive challenges and exploit opportunities arising from interest rate deregulation in July, a partner of the business consulting practice at Arthur Andersen, says.
Further deregulation in Hong Kong's banking sector may mean financial services firms must find ways to differentiate their products and advisory services, as studies have shown that high net worth individuals want a greater variety of complex investment products and a range of advisory services in addition to having high expectations of performance in terms of wealth creation and administration from their asset managers, said Stephen Cheung, partner of business consulting at Arthur Andersen.
High net worth individuals are defined as those with US$1 million in liquid assets. This group of customers is typically served by the private banking department of a bank as opposed to 'premier banking', the second tier.
High net worth individuals are increasingly seeking wealth creation, not just wealth preservation, Mr Cheung said.
While specialised investment products and technological bells and whistles are important, he cautions that technology 'can not replace the close personal rapport', asset managers have with their millionaire clients. Strong personal relationships are considered to be the foundation on which private banking is built.
'A single point of contact is important. A lot of private banks and others providing premier banking services are looking at creating a mechanism which allows one dedicated person to look after these wealthy individuals,' Mr Cheung said.