Asian-based private banking clients are well aware they can no longer hope for consistent double-digit annual investment returns, an industry executive says. 'Clients today ought to be satisfied with 5 to 6 per cent return. That is a very decent return,' says Urs Brutsch, managing director of ABN Amro Private Banking. With equity markets performing poorly, investors had been attracted into fixed-income investments, but increasingly they were turning to alternative investment strategies, notably hedge funds, Mr Brutsch says. 'People are looking for an investment where the return is not dependent on an underlying market rising, although they are not yet familiar with the concept.' There is no doubt much of the financial and economic news in the region has been bad, but the private banking market in Asia remains lively, Mr Brutsch says. 'There is good news and bad news - the bad news is the pace of growth in assets of the private bank has certainly slowed down. 'If you look back a few years, the growth rates shown in surveys was about 12 to 15 per cent per annum. 'I think that has come down to probably 6 to 8 per cent judging by more recent reports.' Good news for the industry is that Asia continues to grow at a much higher rate than Europe, the United States and the Middle East. 'There is good growth potential for private banks in Asia. Much of that growth will come from Greater China, and also the Indian subcontinent with its massive middle class moving to the higher tier of wealth.' Mr Brutsch, who is based in Singapore and has worked in Asia for 16 years, says the average private banking client in the region is far more sophisticated today than when he started. 'There are some extremely sophisticated clients with their own Bloomberg terminals and they trade minute by minute. They are the exception, and there are still some clients who are more old money. 'They tend to leave most of the decisions to the private banks . . . but, on average, clients are very sophisticated.' Dealing with these savvy clients holds greater opportunities for private banks, he says. 'They understand some of the more complicated products. At the same time, the benchmark in service . . . has gone up. We have to ensure that our own product understanding is at least on a par with the clients'.' Traditionally, Asian clients like to make their own investment decisions, using the private banker as an adviser. Only a minority give the banker full discretion over the investments. Mr Brutsch says clients are focusing more on wealth preservation than maximisation in the difficult investment conditions. Private banks will have to differentiate themselves in service areas such as estate planning, he says.