Setting its sights on Singapore as wealth powerhouse

HSBC is laying down its ambitions to be the leading wealth manager in Singapore and the region, with plans to capitalise on the rapidly growing wealth pools, even in the midst of a pandemic.

To better serve this group of well-heeled clients, the bank is investing heavily to bolster its capabilities as well as talent to ensure that HSBC stands out from the pack in the competitive wealth management space, says Philip Kunz, Head of Global Private Banking, South Asia, HSBC.

"Our US$3.5 billion investments over the next five years in Asia are underway, which will include building new digital wealth capabilities, enhancing our wealth products, and expanding our omni-channel distribution," he says.

This comes as the bank is seeing increased trading and investment activity from investors on mobile, communicating with their relationship managers and wealth specialists for more sophisticated needs.

In that span of time, the bank will hire more than 5,000 client-facing wealth roles, including relationship managers, investment counsellors and specialists in Hong Kong, Singapore and mainland China.

HSBC is pulling all stops to position itself as the wealth manager of choice, having recently refreshed its wealth and personal banking strategy to serve across the entire spectrum of wealth needs.

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"From first time investors to mass affluent families to the ultra-high-net-worth clients and their businesses, the bank intends to grow and progress with them through each stage of their wealth journey," says Mr Kunz.

With the bank's global footprint and strong balance sheet, HSBC brings the full breadth of the group's capabilities across transactional, corporate and investment banking to clients with this "one bank" approach.

Mr Kunz adds, "In particular, our strong presence in the world's top eight wealth hubs, including Singapore, enables the bank to deliver transactional banking and wealth management services in these markets to affluent clients looking for international opportunities."

Singapore a key wealth hub

HSBC is taking aim at Singapore as an international wealth hub to meet the needs of the growing offshore asset pools estimated at US$1.48 trillion by 2023, with Asia Pacific in particular as one of the fastest growing regions for wealth.

Asia Pacific's population of ultra-high-net-worth individuals is predicted to grow by a third in the next five years - much faster than the global average, according to Knight Frank's Wealth Report 2021.

For HSBC, Asia wealth for the first half of the year increased 26% year-on-year, driving much of the 30% growth in global wealth revenues for the same period.

Singapore is expected to benefit from the burgeoning wealth seen in its backyard, with qualities such as a stable and progressive legal and regulatory framework and free-market credentials a draw for foreign funds and assets to flow into the country even during the pandemic.

With the Republic at the heart of the bank's expansion in Asia, HSBC Singapore aims to double its total wealth balances - the amount of deposits and investable assets that clients hold with HSBC across its retail, private banking and asset management segments - in the next five years to 2025.

"We have seen a lot of growth from two diasporas, in particular the overseas Chinese segment, particularly from Hong Kong and mainland China," says Mr Kunz. "As they grow and diversify their wealth, this is a growth potential that we want to leverage on."

To do so, the bank is ramping up its outfit in Singapore to fulfil the needs of clients seamlessly as they progress through their life stages.

Investing for growth

HSBC's strategy involves strengthening its digital capabilities to suit changing customer demands, he says. For instance, advanced technologies will enable relationship managers to deliver bespoke experiences at scale.

In the wealth segment, the amount of sales done online has doubled over the past two years. This level of digital penetration is expected to grow four or five-fold in five years.

Earlier in 2021, HSBC launched a dedicated Independent Asset Managers' desk in Singapore to meet the needs of family offices and independent advisors managing wealth on behalf of its clients.

The bank has also recently launched the new Institutional Family Office service in Singapore, which enables single family office clients across Asia to access HSBC's team of investment banking specialists, armed with a full spectrum of financing solutions and product capabilities, says Mr Kunz.

Already, HSBC has one of the world's leading trust and family planning offerings, with more than 75 years of experience serving multi-generational families and businesses.

The bank is also capitalising on deepening collaboration with its asset management and insurance arms to develop more holistic and innovative solutions that will address the wealth preservation needs of its clients.

Patrice Conxicoeur, CEO and Head of Southeast Asia, HSBC Asset Management (Singapore), points out that over the last two years, HSBC has launched over 50 funds in Asia to support the wealth management needs of affluent clients including accredited investors.

At the same time, it continued to scale up alternative investments in infrastructure debt and private equity to meet growing demand from institutional wealth asset owners, he says.

Building sustainable wealth

Even as HSBC is focused on growing Singapore to become a wealth powerhouse, the bank is committed to do its part to help its clients from across the wealth continuum to not just build sustainable wealth, but also understand the impact of environmental, social and governance (ESG) issues on the community and the role that they can play.

To date, almost all of HSBC Asset Management's global assets are ESG integrated. As part of its investment strategy, the firm will continue to incorporate ESG factors into its investment process.

"Assets under distribution in Singapore have grown substantially over the last 18 months. We continue to see good growth momentum in Southeast Asia, especially demands for ESG-themed funds among private wealth and institutional clients as well as liquidity and short duration solutions for corporate clients," he added.

The bank is setting its sights on bringing more green products and options to clients, says Mr Conxicoeur. In fact, HSBC Asset Management has recently launched its first sustainable healthcare fund in Singapore. The fund invests in companies that focus on healthcare innovations that can reduce the overall cost. The fund is available to the bank's Private Banking clients and Retail Banking customers. "We will continue to focus on investor and frontline employee education, product development and investment strategies that better embed ESG principles to meet investor goals," he says.

With wealth expected to continue its upward trajectory in Asia, Singapore as the gateway will capture a significant share of this wealth creation.

Mr Kunz points out that even with the pandemic, Singapore's wealth management has only continued to expand, and may be "even stronger" in the next five years.

"We see signs of an emerging economic recovery that could significantly expand prosperity and wealth between now and 2025," he adds.

To that point, HSBC is unfazed by the stiff competition and is intent on seizing this opportunity.

"Our over 140-year history in Singapore gives us an advantageous position. Combining our commercial heritage, on-the-ground expertise, digital capabilities and international connectivity, we are uniquely placed to open up a world of opportunity for our clients."

Visit www.privatebanking.hsbc.com to learn more about HSBC Private Banking.