Billionaires create demand for managers

Money Glitz | Watson Tan 15 May 2017

Assets being managed by private wealth managers in Hong Kong are expected to double in five years, says Amy Lo Choi- wan, chairman of Private Wealth Management Association, so the private banking industry will need more talent.

"Hong Kong is well-positioned to become a world-class private wealth management hub, but the industry must attract new blood to sustain its development," says Lo. "About 78 percent of members who responded to our last survey said the industry needs to invest more in talent management and development."

The Hong Kong Monetary Authority has joined hands with the association to launch the pilot apprenticeship program for undergraduates.

The association has received more than 350 applications, while only 20 will receive an offer. The rollout will be in the summer of 2018.

"It is designed to give university students the opportunity to gain practical experience through a multi-year internship. The program will also enable private wealth management institutions to recruit future intake," says Norman Chan Tak-lam, chief executive of the HKMA.

The pilot program introduced 10 institutions as hosts, including Bank of China (Hong Kong), Citigroup, Standard Chartered (2888), and UBS. Students will have the chance to learn skills ranging from the back office to sales. There is a dearth of talent for frontline jobs.

From 2000 to 2016, in mainland China and Hong Kong, the total wealth grew by five-fold to US$25 trillion, (HK$194.64 trillion) a report by the Credit Suisse Research Institute says, while PricewaterhouseCoopers says a new billionaire was created every five days in China last year.

The rapid growth of wealth and assets in Greater China has spurred the global wealth management industry's development. As of this April, there were 45 private banks in Hong Kong, almost double compared with January 2009.

"Although some international private banks withdrew from the Hong Kong market, local banks have expressed interest in developing their private wealth management business because they are bullish on its prospects," says Lo.

Standard Chartered is reported to be preparing to lift the entry level for high net-worth clients from US$2 million to US$5 million this year. At UBS the minimum requirement is US$2 million.

Lo, who also serves as country head and chief executive of UBS Hong Kong, says: "We have 1,000 wealth managers covering high and ultra high net-worth business, and we believe they both have growth potential."

Hong Kong has at least 59,000 multi-millionaires, who hold HK$10 million or more in liquid assets, according to the Hong Kong Affluent Study 2016 released by Citibank Hong Kong last month.

While they have more diversified portfolios, their liquid assets climbed by an average 11.1 percent year-on-year to HK$20 million last year.

By the end of last year, about two thirds of 3,000 private bankers have met the enhanced competency framework benchmark. It fell below expectations. Lo explains that industry regulations have become tighter and have the professional requirements.

Meanwhile, more than 1,800 banking practitioners have qualified as certified private wealth professionals, a qualification that requires three years of work experience. Lo says this helps to build up qualified candidates.

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