Does new wealth need a new private banking model?

[SINGAPORE] As the private banking industry evolves to accommodate the shifting needs of its clientele, our approach to building clients’ trust need not change.

Having been a corporate banker, and an investment banker before becoming a private banker, I have seen numerous market cycles in my decades-long career. I can wholeheartedly attest that the aphorism “change is the only constant” may not necessarily hold true in every sphere.

Even as private banking is experiencing momentous changes, the industry’s core values of having a laser-sharp focus on clients, empathy and integrity remain a steadfast constant.

This region is in a period of significant growth and is maturing on the world stage. As a result, the wealthy population is also growing and is placing emphasis on legacy and succession planning, technological advancement, and shifting from traditional asset classes towards alternatives.

Another emerging trend is the propensity of the younger generation to consider opportunities outside of their family business and beyond their home shores.

These shifts have led to a fragmentation of the industry rather than consolidation, with the entry of more players to serve an evolving and expanding client base. This might be a good thing for the industry. Financial institutions can carve out niches to meet the fast-growing demand for personalised services.

However, to achieve long-term success, they must preserve the golden thread of client-focused service that has been a hallmark of the industry.

Play the long game

A good private banker needs to display a genuine holistic interest in the clients and understand that their interests supersede everything else, including sales targets, revenue goals and commission. It is never about chasing the first dollar with the client but taking a longer-term view to earn a seat with them at the table.

As I often share with my team: “Put the client before your rice bowl, and you’ll never go hungry.” In any career choice, taking the time to build a strong and sustainable foundation will always position them for the better in life.

Private bankers must be intellectually curious about their clients. Learn everything possible about the client, such as the industry they work in, the countries they operate in, the clients they serve, their personal interests, the economic challenges they navigate and their family’s circumstances. In summary, curiosity is what keeps the relationship alive. It forces us to keep learning and to better connect with our clients.

Clients may at times face difficult situations, especially when there is a market downturn and the road ahead seems rough. Having seen many market cycles, I know that clients unequivocally appreciate being kept informed rather than being kept in the dark. Private bankers must not shy away from reaching out to their clients in these situations, even if it feels daunting to deliver bad news.

Stay the course

It is important to note that the long-awaited intergenerational wealth transfer, estimated to be US$5.8 trillion between 2023 and 2030, has also been more gradual than expected and is proving to be more of an evolution than a revolution.

There are two reasons for this: People are living longer, aided by modern medicine; and Asian values often dictate that wealth transfers to the young only after the old have passed on. This trend explains why, for example, the 60-year-old son of a client of mine continues to wait patiently for the opportunity to manage his family’s money.

This highlights the sensitivities that can exist around succession planning. Private bankers must navigate astutely, working in the best interests of both generations of clients even as they position themselves to adapt to the changing circumstances.

Similarly, young private bankers must understand that this career path is a marathon, not a sprint. Learning takes time; gaining trust takes time; building a network takes time.

My advice is for private bankers to enjoy the process. They should work hard when they are young and have fewer responsibilities, so that they can reap what they have sown as they mature in their careers.

This career path is not easy but is highly rewarding, provided one is fully committed and willing to put in the hard work.

Collaborate to elevate

I believe that private banks can better serve the evolving needs of ultra-high-net-worth clients through a “double barrelled” model. This involves assembling a team that pairs experienced bankers who have earned their clients’ trust over the years, with young, digitally savvy bankers who can expertly harness technology.

With the rise in generative artificial intelligence, private banks can also turn to technology to supplement and enhance the human touch. This can range from modelling investment scenarios quickly for clients to handling administrative chores, so bankers can devote their time to cultivating relationships.

Be selfless and generous

When I started my career, I benefited hugely from a senior banker showing me the ropes.

Others have also invested their valuable time and wisdom in me, especially during my early years in the industry. I believe it is my responsibility to pass on what I have learnt – both successes and failures – to the next generation of private bankers.

Just as others have invested in me, I am very passionate about investing my time to mentor younger bankers. I hope that the next generation can be better equipped to serve clients with integrity, dedication and professionalism.

As the private banking industry faces momentous changes ranging from the rise of new wealth to clients with more complex needs, it must evolve – not by discarding the old model, but by reimagining it.

This means preserving the trust and deep client understanding built over generations, while embracing the agility, digital fluency and fresh thinking of a new era.

The writer is the regional head, South-east Asia and Singapore location head, Standard Chartered Global Private Bank