Earlier this year London based global industry research group WealthInsight named Singapore the world’s current fastest-growing wealth management centre — overtaking Switzerland.
Singapore’s wealth management industry grew 2% in 2012 to S$1.63 trillion (RM4.18 trillion), and its share of global offshore wealth may outstrip Switzerland by 2020, according to its data cited in a news report in February.
If the leading source of intelligence on global high-net worth (HNW) and ultrahigh- net-worth individuals in the wealth management sector is right, then Malaysian wealth management industry does not have to look far for both competition and inspiration to excel.
While the Malaysian counterparts have achieved great milestones since the industry made its debut locally at the turn of the millennium, it has been facing numerous challenges to meet the increasing demands of its clientele while trying to stay globally competitive, and provide solid ground for talent development.
One of the concerns among local industry players is how to ensure wealth management in Malaysia for HNW clientele go beyond a product-centric approach in order to capture a larger market share (at best) or retain its current market share (at the least).
The Labuan International Business and Financial Centre (Labuan IBFC), in its April 2013 report based on its industry roundtable in Kuala Lumpur organised by Hubbis and cohosted by Labuan IBFC, highlighted this as a concern.
In that discussion, MyFP Services Sdn Bhd founder and MD Robert Foo said the Malaysian market needs to be more open.
“Not just for the sake of it, but because mass affluent and HNW clients are exposed to global opportunities and solutions available in places like Singapore, Hong Kong and beyond.”
He cautioned the industry that failure to provide clients with these types of solutions, the industry may be illequipped to manage a large part of their wealth.
“Money is fluid, but it will be sad if the relationship goes offshore. Once that happens it is difficult to bring clients back to Malaysia,” he said.
Cognisant that regulators are aware of the situation, he called on them to create an equal system to allow Malaysian professionals to manage clients’ wealth and improve our standards to be more on par with international levels.
Foo also pointed out that since the market is sales-oriented, even research in the industry is product-based. “This makes it more difficult to provide the type of advice which clients value,” he added.
Meanwhile, First Fiduciary (Labuan) LLP senior partner Datin Isharidah Ishak said the industry needs to look at what it lacks as a market that drives people to look offshore.
The trust and estate practitioner pointed out that one of her clients have complained about their relationship managers attempting to push products.
“They check with me on the advice they are given, and we come across situations where clients have been given the wrong advice. For example, one client thought that they had a foreign trust, yet the control and management of the trust was with the bankers in Malaysia, making it a local trust,” she said.
Echoing similar sentiments, Kenanga Investment Bank Bhd Wrap Wealth Management head William Lee told The Malaysian Reserve recently that the financial services industry has been operating on a productcentric approach where investment products are offered to clients based on the respective product’s distribution and agent channels.
“There is no single point of access for clients to source for unit trusts, insurance, private retirement schemes, shares or structured products all at the same time. Similarly, advisors do not have an all-encompassing view of their clients’ holdings, hence, manual methods are utilised to compile all information for ease of monitoring and tracking,” he said.
Citing this alarming trend, Lee said there is a urgent need for an all-round platform or service for advisers to use so that they may manage and plan their client’s portfolios which may consist of various investment products and for clients to view and access multiple financial products from a single point.
“Kenanga’s wealth management addresses this gap as it ‘wraps’ all client investments and reporting into an integrated model through our Ken- WRAP platform,” he said.
KenWRAP is a digital wealth management tool introduced designed to supports wealth management to function as a single-digital touch point, offering a myriad of products which include unit trusts, equities, share trading, and private mandates.
It is designed provide a structured approach for registered KenWRAP advisors when servicing clients. It covers all aspects of financial planning; from data collection and storage, campaign management, risk management and client engagement.
“Portfolio reports can be generated for advisers to review, monitor, and analyse. Automatic updates are also received from data feed providers, which is essential as markets fluctuate,” Lee said.
As such, this eliminates the need for advisers to spend a large amount of time to monitor the markets, thereby enabling them to focus on advising and reviewing their clients’ portfolios to ensure it is on track to achieving the client’s financial goals.
“Ultimately, efficiency and service levels will improved by providing a single touch point for all financial planning needs,” Lee added. He said clients are increasingly savvy in financial products which have made their needs and expectations even more diverse and demanding.
Through its KenWRAP platform, Kenanga’s wealth management is able to diagnose the solutions to different needs by determining the risk profile of a client and recommend an asset allocation based on the computation.
“This tailored systematic approach ensures that the recommended financial plan is aligned with each client’s risk profile. Together with comprehensive f inanc ial planning and a single holistic view of a client’s entire portfolio, we are able to monitor clients’ financial status and portfolio performance on a 24/7 basis,” he said.
Kenanga Investment Bank’s KenWRAP was recently awarded the Most Innovative Product by Asia Asset Management’s Best of the Best Award 2013 under the “Country” category.