Private Banking, Regional Asia, Singapore - Thursday, December 1, 2011 20:35 - 0 Comments

Forbes private banking report: an uncertain time for clients

Forbes Asia, December 2011

Private wealth clients in Asia are facing intense market volatility and uncertainty for the second time in three years. The bad news is that almost all investment classes – equities both global and local, debt, property and commodities, everywhere from the US to Europe, Japan to China – face a deeply unclear and likely negative outlook. The good news is that compared to the global financial crisis of 2008, clients are much better prepared this time.

“There is a very marked contrast between what we’re seeing this time and what we went through in 2008 with private clients,” says Arjuna Mahendran, managing director and head of investment strategy at HSBC. “At the retail end of the market, they are going through the same experience as 2008: huge redemptions, forced selling, and a general state of panic. But high net worth clients are different. Because a lot of them used derivative instruments in 2008 and got burned, they learned their lessons and have deleveraged.” That leaves them less exposed this time, with more liquid investments and lower risk.”Most of them are looking at this as a guarded opportunity to pick things up fairly cheaply.”

Alongside the ructions of today’s market, there are other, longer-term trends at work in Asia private banking. Many of them stem from a key theme in Asia: the first generation who have built wealth approaching the end of their working lives and pondering how, or if, to pass the management of that wealth to the next generation. There are numerous knock-on effects of this trend, discussed in more detail in this report. Among them are an increasing professionalism in the way people manage wealth: corporate structures, family offices, more diversified portfolios, and a greater use of financial advice.

To see the report as it ran in the magazine, click here: Forbes Wealth Management v2

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