EFG private bank on track to double Apac AUM
Singapore
EFG International appears to be on track in its ambition to double its assets under management (AUM) in Asia Pacific by around 2022.
To date, the bank has delivered on a number of targets articulated in 2019 which included acquisitions, partnerships and the hiring of more client relationship officers (CROs).
Last year, for instance, it acquired Australian wealth management firm Shaw and Partners, which added some 12 billion Swiss franc (S$17.8 billion) to its Asian AUM. Together with 9.6 billion Swiss franc in assets in Hong Kong and another 9 billion Swiss franc in Singapore, EFG now manages around 31 billion Swiss franc in assets in the region.
Albert Chiu, executive chairman of the private banking group for Asia Pacific, said: "We are in growth mode despite Covid-19 challenges...
"EFG has targeted 4 to 6 per cent growth in terms of new money in Asia. Because of the additional volatility we did see some deleveraging in the first six months (of 2020). But in the second half of the year we picked up tremendously. We have registered net new money within our target range. We also registered very good growth in our profitability.''
EFG International's Asian business was established in 2000 by Robert Chiu, supported by his partner Albert Chiu (not related). Mr (Albert) Chiu said the business was funded with 5 million Swiss franc in initial capital from the head office. The business became profitable within a year.
Hong Kong and Singapore each have around 200 staff, including 50 CROs in each location.k
EFG was founded in 1995 by two entrepreneurs and was listed in 2005 in Switzerland. It describes its approach to private banking as "entrepreneurial''. CROs are able to build their own teams and have their own profit and loss accounts, with a transparent compensation model tied to performance and conduct. The bank does not enforce any market segmentation, which means a client can remain with the same CRO.
In 2016, EFG International acquired the business of BSI.
Mr Chiu said Asia Pacific has been singled out by EFG as the fastest growing wealth management market, with an expected double-digit growth over the next five years. The growth areas include Indonesia, China and Australia.
"Covid-19 has brought many challenges but seeing how Asian governments - China, Taiwan and Singapore - have handled the pandemic... I think recovery in the region will be much faster than Europe and America.''
Asian clients, he said, are now more open to discretionary portfolios and managed assets. When EFG began in Singapore, only about 3 per cent of clients were willing to pay a fee for advice.
" In the last 10 to 20 years Asia has undergone many crises... clients understand that to manage the volatility it's best to leave it to a professional. I'm happy to share that the percentage of assets going into discretionary management and managed assets has grown tremendously. Our range is between 20 and 30 per cent.''
He adds, however, that this is still far behind EU clients, where the share of managed assets is as high as 50 to 60 per cent.
