As the number of Hong Kong's high-net-worth people rises so too does the number of private banks keen to sign up clients with at least the magic figure of US$1 million. Even retail banks are getting in on the act by offering private banking-style facilities. The affluent expect - and private banks are increasingly offering - a range of complex products such as hedge-fund investments and legal and financial structures that handle cross-border transactions. It is estimated that Hong Kong has more than 250,000 people with a net worth of US$100,000 upwards and between 45,000 and 50,000 with net worth of US$1 million upwards. But accumulating wealth is only half the battle. So what can members of the millionaires club expect? Banks lay on an assortment of services, ranging from personal advisers to 24-hour phone access to platinum cards and leveraged foreign-exchange investment. 'The private banker, while offering his advice, will work closely with clients to pinpoint his or her priorities in financial terms and assess risk appetite,' says Jerry Letendre, chief executive officer, consumer, commercial and private banking for ABN Amro Bank. He says Hong Kong's low tax rate means that the majority of high-wealth investors choose to focus less on tax efficiency and more on absolute returns 'When the equity markets were struggling there was a significant shift in favour of absolute-return portfolios,' Mr Letendre says. 'Generally clients now have a better understanding of the value of capital protection, and there is a greater interest in alternative investments that enable them to participate in the market while benefiting from some downside protection. 'Now we are seeing a slight tendency towards a higher tolerance for risk, tempered by non correlated investments,' he says. But for some, the Hong Kong urge to get rich quickly is still deeply ingrained. Mr Letendre says he has noticed an increase in the number of investors adopting the risky strategy of putting large sums of money into property, or into one particular segment of the market. 'We recommend diversification,' says Mr Letendre, expressing the mantra of the modern private banker. 'Investors really need to think global.' Some clients prefer to take a more active role in formulating their investment strategies and tactics. Often investors want to allocate their money into a sector or industry they are familiar with. 'Of course the investor has the final say; however we would be failing in our duties if we didn't point out the risks,' he says. ABN Amro also works with clients on investment strategies that focus on growth, conservative fixed-income or retirement plans. There is also the long-term investment, with a time horizon of five years or more. While the emphasis is still on growth, for diversification a percentage should be placed in fixed-interest investments. The investor should be prepared to accept a moderate-to-high degree of risk with significant short-to-medium-term volatility in the value of their portfolio. To help investors to adopt these strategies, ABN Amro has developed investment tools that offer the potential to invest across a three-dimensional matrix made up of developed and emerging equity markets, bond markets and multiple currencies. For access to these markets and investment advice, clients can expect to pay around 1 per cent of assets under management, declining with larger amounts. But not all high-net-worth clients are happy with the private banking services they receive, mainly due to middle- and back-office failures. A survey by global management consultants Booz Allen Hamilton revealed that many grievances are rooted in administrative issues. Frequently these services have been outsourced by the banks. Five problem areas relating to the back and middle office emerge from the research: the client's point of access to the bank; the accuracy of investment transactions; the legibility of reports sent to clients; the efficiency of data capture (i.e. retention of fundamental information such as contact details) and the provision of investment ideas. 'Private banks need to provide a high level of service to build a long-term relationship between the bank and its customers,' Mr Letendre says. 'This means there should be a close relationship and a clear understanding between the bank and the client's financial objectives.'