China private banking debate: Managing a wealth of riches in China

By:
Elliot Wilson
Published on:

The nation’s private banking industry is blossoming, but even as it flourishes, leading players have to move fast to keep up with a changing market and an increasingly demanding and diverse client base. Euromoney gathered together a panel of private bankers, wealth managers and economists to discuss the market’s key issues in July.

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Executive summary

• China’s private banking industry is growing rapidly
• New clients are often young and confident
• Investor education is a priority 
• First and second generation clients have very different demands
• Branding and marketing, as well as product range, are paramount

Read more about the participants

Elliot Wilson, Euromoney How fast is the private banking industry growing and changing in China? And how can your institution ensure that you are getting a big slice of the business? 

Yin Jinqiang35

YIJ, ABC We have more than 64,000 clients, with an average level of assets under management of Rmb12 million ($1.88 million), and our client base is growing by 23% each year. Our private banking business has been experiencing rapid development in recent years, adapting to the wealth-management needs of HNWIs [high net-worth individuals], notably when it comes to wealth preservation, creation, inheritance and accumulation.

Since the establishment of Agricultural Bank of China private banking department in 2010, we have been increasing our market share by providing our clients with comprehensive asset management, financial management, financial consulting and cross-border financial services, as well as value-added services. We describe our value-added services as ‘five butler services’.

Jing Wang35

JW, CMB The average and total wealth of our private banking client base is growing very quickly, presenting us with a considerable number of new and profitable opportunities. Our clients are typically natural entrepreneurs who have built their own companies, then gone about completing initial public offerings, accumulating large sums of new wealth. We kicked off our private banking business in 2007 and it has been growing by 30%-40% a year. Our client base is broad and diversified.

China Merchants Bank, which puts great emphasis on service and providing high-quality advice to clients, notably when it comes to the make-up of their wealth portfolio, is not a state-owned bank. We provide high-quality advice to our clients, notably in terms of professional advice on the make-up oftheir portfolios.

Our clients have a higher risk appetite than normal and are willing to invest more of their capital with us. We can help them in any number of additional ways, offering credit cards, loans, mortgages and financing. More Chinese HNWIs are also exporting their assets and investing their earnings overseas, so we are in turn investing heavily in our own services and infrastructure to keep pace with that demand.

Yu Jin35

 YUJ, ABC-CA According to a new report, the number of newly wealthy citizens in China is growing rapidly. In 2015, the amount of disposable wealth in the country is projected to hit Rmb129 trillion, a 16% increase over last year’s figure. The total number of HNWIs in China is set to hit 126,000 this year, while total disposable assets are set to reach Rmb33 trillion. The origin of new wealth creation has also changed. Not long ago, half of all new wealth emanated from investments in the property sector. That share has fallen this year, to 40% from 50%, while investments stemming from financial services and the capital markets has risen to 60% of all new wealth formation.

As a fund manager, there are more things we can do to develop the market. Take ABC, a large state-owned bank that has a different and larger population of wealthy clients than the likes of China Merchants Bank. ABC has a long history of working in and with the public sector and with state-owned enterprises, and there is so much wealth still emerging from this group of customers. Their risk appetite is lower than in the private sector, but it is changing. So we decided to set up a special account with ABC that helps them manage the funds of their clients. I believe there is much more that we can do to help roll out better private services to mainland clients, and we are making those changes. Before, our branches were siloed, which kept accounts separate from one another, rather than integrated into a single, centralised investment channel and network. So we built a joint venture, and began working with ABC to provide a more comprehensive portfolio of investment services. We hope to ensure greater integration and synergies, to boost IT infrastructure and to offer new services to all our clients. 

Emily Gu35

EG, UBS UBS is the largest wealth manager globally and has more than 150 years of experience in serving the world’s wealthy. Asia Pacific is contributing substantially to our global wealth management business, where we hired 200 client advisers in 2014 and will continue to hire strategically based on the needs of growth. Wealth creation in China is leading the region, and private banking is going to continue to grow, which presents great business opportunities to UBS. Excluding the Americas region, net new money in our wealth management division was SFr8.4 billion ($8.8 billion) to the second quarter of 2015, with Asia Pacific the main contributor.

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To achieve our goal of being the pre-eminent global wealth manager in China, we have dual engines for growth: our subsidiary bank, UBS (China); and our securities arm, UBS Securities. For the bank, we opened Beijing Huamao sub-branch last year, which is our first ground-floor presence in Asia Pacific. The firm is seeking to increase its footprint in Shanghai, which demonstrates UBS’s commitment in expanding its presence in China and broadening its products and services to meet the needs of clients.

We are leveraging our global expertise and offering integrated services to our clients by working closely with our investment bank and asset management arm. It is important to ensure that in China, our name is synonymous with wealth management. So the key for us is to continue to help to educate clients and the market in general about wealth management, and to ensure that customers have a better understanding of what private banking is and how it can help them and serve their needs.

Liu Feng 35

LF, Guotai There has been in recent years a big uptick in China’s capital markets, and we also see that the wealth of our customers, particularly HNWIs, is increasing very fast. Over the past three years, we have promulgated a strategy focused on providing a far more in-depth range of wealth management services to our high-end clients. In recent times, client demand for financing has risen significantly, as has their desire to pursue and complete IPOs of their companies and the firms in which they invest. That compelled us to roll out a far more comprehensive wealth management offering, to constantly reappraise the package of services we provide, and to do more to support services such as the integration of an existing bank account into a client’s new wealth management portfolio. In every one of our branches, clients are given access to a single, integrated account offering a full range of investment services, which also boasts a new payment facility, upgraded last year.

The concept of wealth management remains relatively new in China. We still lag foreign markets in this. To be successful in this industry, you have to make the customer your priority, but too few Chinese financial institutions do that. We put our clients front-and-centre in our thinking, but there is still, across the industry, a gap between the buy side and the sell side. 

Euromoney China obviously has one of the fastest rates of wealth growth in history. But where is the wealth management industry growing fastest here? Is it among HNWIs, UHNWIs, or mass affluents?

Lin Caiyi 35

LC, Guotai China has the highest rate of growth of UHNWIs in the world, and the source of much of this new wealth stems from the uptick in IPOs in recent years. IPOs have made a lot of people hugely wealthy virtually overnight – around four in every five new HNWIs or UHNWIs is created this way – and this typically elevates their personal wealth by at least several hundred million renminbi. This is by far the most salient feature of wealth-creation among China’s affluents and explains the average annual growth rate of the domestic wealth management industry of around 30% over the past three years. This is great, but it does not necessarily reflect a mature wealth management industry. Unlike a global wealth management institution like UBS, we cannot yet boast that we provide private banking services to multiple generations of a single family.

Plus, a lot of wealthy Chinese still feel they want to put their money to work at home – to make their own investment decisions. In wealthy countries, private banking services are varied and mature, but China’s laws and regulations still make it tricky to invest non-cash assets, such as real estate, in trusts. That explains why the family trust business is growing very slowly in China. Trusts around the world play a very important role in this industry. We call them ‘absolute wealth’ services, but in China it is incomplete, and this stymies the sector’s overall potential. A lot of wealthy Chinese are also very young and very confident, and their decision-making is directly connected to their financial achievements. That means that they often prefer to make short-term rather than long-term investments, and that attracts them to investing in stocks and shares. 

Yin Jinqiang35

YIJ, ABC Some 40% of HNWIs are new entrants to the wealth management industry. They are typically company owners, and our first step is to provide them with a wealth inheritance plan, and second, to coordinate and arrange an education plan for their children. We have an ageing society, where a majority of individuals, wealthy or otherwise, are looking to make strong decisions about their retirement. We need to take care of our clients’ inheritance needs and help them guarantee the financial future of the second generation, too.

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Jing Wang35

JW, CMB We do very thorough research on our clients. They need to have a personal fortune of at least Rmb10 million ($1.6 million) to join our wealth management family. I would say that around 70% of our clients are entrepreneurs. Typically, the higher their individual wealth, the faster their personal wealth is likely to grow – by 60% or 70% a year, even doubling in size in some good years, particularly when it comes to UHNWIs. In 2012, we opened up our first family office business. We brought together legal affairs, consultancy and corporate finance specialists, and began to look into how to offer great family trust services, as well as the best possible wealth management advice. We have an offshore trust division in Hong Kong, and we are looking to advertise our trust business here in the mainland.

So far, we have assembled tailored customised solutions for hundreds of our elite clients, with a legal time framework typically ranging from 20 to 60 years. We also have traditional banking advisers, who offer clients advice based on a whole range of current and future risk exposures.

In the first half of the year, you’ve seen both the highs and the lows of China’s capital markets, but we are proud of being able to manage our customers’ wealth in a robust, pragmatic and long-term way. The UHNWI sector in China is still in its infancy. They lack professional knowledge about wealth management, and we need to help and guide them with their education. Their focus on risk exposure also needs to be on helping them to understand the vacillations of economies, financial instruments and assets, including shares. Many wealthy people in China make poor or inappropriate decisions with their money, but at the same time, they are increasingly realising that they should trust institutions like China Merchants Bank to help them make good, solid, long-term investment decisions.

In short, we help educate our clients, and they in turn trust us. We started from scratch, but we are very confident in our own knowledge and our own capabilities.

Euromoney Do wealthy investors in China prefer to manage their own wealth, or are a new generation of business leaders turning to wealth management specialists to help manage their money?

Emily Gu35

EG, UBS Global wealthy clients often share similar attributes. There is a common desire among many of them to look for professional support to manage their and their families’ wealth as their needs get more sophisticated, usually covering investment, business and family needs. Wealth transfer is also a key priority for them. You’ll find that in China, a lot of banks are holding seminars specifically for the second generation of wealthy clients. I was at such a seminar recently where I shared my view.

We asked them what their financial concerns would be, if they were put in their fathers’ shoes. Their interest was often very simple and they didn’t want to be dependent on their parents. The first generation of wealthy Chinese is typically very strong in terms of their personal attributes. They typically work hard, are autonomous, are used to making strong, determined decisions, and recognised early the benefits of managing their own money. They understand the importance of having global asset allocation. When it comes to investing overseas, they are more comfortable about seeking professional help.

For the second-generation wealthy, they are more interested in further developing the family business, for example seeking M&A opportunities or in engaging in philanthropy to build a legacy. It is typical that while the first-generation wealthy wants to make investment decisions themselves, the second-generation wealthy are more content to outsource at least some of their wealth management needs to experts such as our portfolio managers. They also have a more flexible and more innovative approach to managing their money, and this benefits us, as UBS has the global know-how and scale to help them manage their wealth globally.

Lin Caiyi 35

LC, Guotai The first and second generation of HNWIs in China are as different as apples and oranges. The first generation earned their money through their own toil and sweat. They tend to ask for products related to specific things: typically legal and financial affairs. They won’t and don’t let you make all their decisions for them. And they aren’t as generous, in that they aren’t always willing to pay for professional advice.

Then there’s the second generation. They have often grown up in an affluent environment, and they do not always feel compelled to take over their parents’ business. They are often more engaged in art, philosophy, or music. The only thing that a lot of them aren’t interested in at all is in making money – that belief is shared by around a third of all second-generation wealthy Chinese.

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Many others are different. They also grow up in an overseas environment, but they are interested in and engaged in managing their families’ money, as well as willing to pay generous wealth management fees to private banking and wealth management institutions. This explains why we provide such a comprehensive and diversified source of products, as well as why we take education in the field of wealth management so seriously.

Liu Feng 35

LF, Guotai We have established a wealth management planning system and, in working through and developing our systems, we have come up against a number of issues. First, our clients do not always have a profound awareness of how to best manage their wealth.

At the same time, many equate wealth management with the simple matter of investing directly in stock markets. A lot of them are also not comfortable when it comes to transferring personal financial information or data directly to a financial institutions. So we have to engage with clients and communicate with them many times and over many months and years
to secure their trust and their ongoing business.

Many of them accept this way of doing business, and when we deliver to them a tailored structure for their investment portfolio, or a report on their wealth accumulation, they are very impressed. The good news here is that clients are increasingly willing to engage with financial institutions when it comes to their long-term wealth planning. That is good news for everyone in the industry, and for the clients themselves. 

Yin Jinqiang35

YIJ, ABC The first generation of Chinese wealthy often don’t accept the most updated technology and financial business. As for the second-generation wealthy, they typically finished their higher education overseas and aren’t as willing to take over a business from a previous generation. It can be hard for a second-generation family member to take over a company from the first generation and then take it to the next level.

We have a young leaders club inside Agricultural Bank of China, as well as a training programme that we have developed in association with Peking University. We are rolling out more activities and more content to educate the younger wealthy, and this is key to our private banking programme.

Jing Wang35

JW, CMB At China Merchants Bank, we have made it our ambition from the start to cultivate the private banking and wealth management needs of the second-generation wealthy Chinese. It’s great to get the first generation to work with us, but we need to underline the importance of passing on their wealth, in good order, to the next generation.

The young people we meet often have a better education than the generations that came before them. Around nine in 10 clients who stem from the next generation of Chinese wealthy studied overseas. They have active minds and a wealth of global experience. They grew up with a silver spoon in their mouths, but they aren’t typically as engaged as their parents in running a typical old-fashioned industry or corporation – though they are genuinely, in my experience, engaged in creating and forming new wealth. Many want to build their own business interests, in sectors they personally enjoy. They don’t want just to make money, but to make money in ways that engage them and that allow them to build a rounded life.

The key is that one generation in China always wants to pass its wealth to the next, and this often creates a lot of internal squabbles inside families. So family groups invite us in to coordinate between generations. Fathers want their kids to help with the business; in turn, the second generation wants first-generation figures to accept new ways of doing business, so we often act as a facilitator and a coordinator.

Suppose the next generation doesn’t want to take on the family business in their 20s, but then they change their minds in their 30s. This may be something they are willing to share with us, but not with their parents, and we continue to focus heavily on building our relationships with those clients, to offer suitable advice and services whenever we are needed. Factors like this explain why we run these young business clubs, and have done for years. We have to take the long view in this industry: it’s the way it works across the world, and it’s the way it will work here in the long term. 

Lin Caiyi 35

LF, Guotai If I think of specific clients, there is one that comes to mind. He’s wealthy, with around Rmb2 billion or Rmb3 billion in assets under management. He’s in his 30s; he has a collection of high-end cars including Ferrari; and he has a lot of repeated insurance products. We produced an investment portfolio tailored to his needs and a planning strategy designed to show how he could increase his wealth by a specific amount every year. He was happy to receive the report and the support: despite being a second-generation affluent, he’d never seen anything like it. We are now offering genuine wealth management services, and we are currently proposing an IPO investment plan for him. He welcomed our help and appreciated our professional service. 

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Euromoney How do you keep your customers happy? And are your clients found in more distant inland cities, as well as big eastern cities like Beijing and Shanghai? If so, how do you find new customers, or do they find you? 

Jing Wang35

JW, CMB Around 60% of our clients at China Merchants Bank are from tier-one cities such as Shanghai, which are filled with entrepreneurs who built their companies from the ground up. People often come to us in large part because a friend of theirs has referred our services to them. Shanghai is a key focus for our private banking team, as its financial services base is so much more developed than the rest of the mainland. So it’s where you find a higher concentration of affluent people, and a wider range of advanced financial and business services providers. There is less need to set up private banking offices in poorer or inland towns that have a smaller financial services base than top-tier or second-tier cities, as many business owners travel to big eastern cities like Shanghai to find high-end wealth management services. We plan for the long term, and building private banking offices in key major cities, as well as our excellent IT services, ensures that our clients don’t need to visit branches on a weekly basis. Every two or three months is often enough. 

Yin Jinqiang35

YIJ, ABC Our client base is geographically scattered. In 2010, we set up our private banking department, which then boasted 10 branches. We now have 33 branches, with service channels across the nation and best-quality service provided to our clients. A lot of our clients have been with us for years; they are loyal to us, and we are loyal to them. Some are older customers, whose wealth has slowly grown over a period of years or decades. Their affluence has defined them, and we place them in our HNWI base. We are using big data to provide a better level of personal service, and an increasingly valuable and complex client management system. We also have a partnership programme in which a private banking client of ours can refer a friend or acquaintance to us and to our services. The next challenge for us is to retain recently acquired clients as well as our long-term customers.

Liu Feng 35

LF, Guotai As a securities firm, we provide corporate financing facilities. We have a corporate and institutional business. And within our database, there are CEOs and chairmen and various wealthy individuals who belong in the HNWI and UHNWI wealth groups. Whenever key clients engage with us to buy or sell shares, or outline plans to complete an IPO, we look to approach them, to see if they are interested in engaging with our wealth management services.

A key discovery for us was the revelation that our clients don’t put all their assets in stocks and shares, or in various corners of the capital markets – in fact, only a fraction of their wealth is placed there. They often invest their money in and through a number of financial institutions, and we try to help them invest their capital in a raft of various financial and economic assets and instruments. Finally, referrals are very important to us. Our high-end premium branches have been using this approach with existing and new clients for years, notably our main headquarters in Shanghai, which has a huge concentration of HNWIs. That branch has a halo effect that attracts many more new clients to it each year. 

Yu Jin35

YUJ, ABC-CA Our clients are nationwide, from tier-one to tier-four cities. Around 80% of affluent people in China own companies or are C-suite executives or directors at privately run firms. They are mostly entrepreneurs, but it’s important to remember that wealth is scattered across the country, from technology firms on the east coast to natural resources companies based further inland. At Agricultural Bank of China, around half of our wealthier customers hail from first-tier cities, with the other half living in second-tier cities and below. But that doesn’t necessarily mean that we need to scatter our branches across the country in order to chase clients. They also chase us. Our branches are located mostly in Shanghai, Shenzhen and Beijing. That’s where people tend to go to find quality private banking services: clients migrate their money to the place where they also manage their money.

Personally, I believe you don’t have to locate your private banking branches everywhere, particularly now that technology allows customers to access financial services whenever and however they want. Demand for professional wealth management services is very high and growing fast in China. If you look at the annual Hurun wealth report, the average individual with personal assets of more than Rmb1 billion is 50 years old, looking forward to retirement, and focused on key issues that affect their lives, from continuing to build wealth to managing their tax demands, to passing down inheritance value to the next generation. But there is much work still to do, notably when it comes to branding and marketing. China’s wealthy individuals still lack skills when it comes to wealth management, and we need to be patient is to wait for the market to grow and develop, and to nurture it. 

Emily Gu35

EG, UBS Our strength is to offer a holistic approach covering investment, business and family needs. As a foreign bank, we don’t have that many branches in the mainland, so we do not have a very large client database in the way that domestic banks can. So our focus is on key segments such as UHNWIs and HNWIs. They are mainly private entrepreneurs. We reach out to them with our professional client advisers.

When we hire client advisers, we are careful to employ the right people. To become a private banker at UBS, you have to have 10 years’ experience in banking under your belt. When it comes to wealth management, people will trust advisers with a long and rich experience in major banking institutions. Foreign banks place great emphasis on selecting the right candidates who are able to leverage their experience and market intelligence. In addition, branding and marketing plays a growing role. 

Euromoney How are you investing in your brand and in advertising and organising events to educate the wealthy about the services you offer? How important is this as a way to distinguish yourself from your peers?

Yin Jinqiang35

YIJ, ABC This is a very important question. We have done a lot of work on branding and marketing. We focus on building out our marketing work focused on higher-end clients. We have several sub-brands; we work with clients. We bring in healthcare groups that offer routine check-ups to clients – that’s always very well received. And we are always looking to improve our service offering. We invite them in, offer them financial advice and show them how we can help with their families’ healthcare and with art- and culture-related investments and acquisitions. We are here to serve our customers. This has helped us to retain our customer base and to attract new clients. We advertise on television stations and billboards and seek to inform people about the products we provide. It’s a journey, and we aim to grow and develop alongside our clients.

Jing Wang35

JW, CMB At China Merchants Bank, we aim to differentiate ourselves with the quality of our advice and advisers. We offer a whole range of solutions for wealth management advice. We do a lot of marketing; on a quarterly basis we pull together a research report that focuses on a raft of issues and subjects, including the state of the domestic equity market. We run regular salons, to which we invite internal and external specialists in areas ranging from the legal to the accounting worlds. And in addition, if our clients have problems – say, if they are looking to emigrate, or to invest in foreign real estate, then we are there to serve them. It’s all about providing expert levels of service to our customers.

And when it comes to the maintenance of our clients, that tends to happen at a branch rather than at a central level. At the core of our operations is our ‘One plus N’ service, which refers to the universal range of advice and services, financial and non-financial that we offer to clients. We have more than 200 specialists at our headquarters who we can draw on to provide service to key clients. 

Yu Jin35

YUJ, ABC-CA When it comes to wealth management, the issue is how to differentiate ourselves from other institutions. Every customer is different. We are also trying to establish our own strategy and style. Currently there are two key planks in our strategy. The first is to respond to the latest trend in domestic, economic and financial reforms. The second is a greater internal focus on the agricultural sector.

China’s economy is being restructured, and more and more resources are being used to boost and shore up the support of the domestic agricultural sector. Investment and earnings in the farming industry will increase sharply in the years to come, and at Agricultural Bank of China, we see it as a promising direction of investment for our wealth management and private banking services. Educating and guiding our clients is also key to their future and to our future. Our focus is on becoming more internally sophisticated, in terms of our financial knowledge and the range of services we offer to our clients. We have a short history when it comes to wealth management, but we can see that the demand is there. We need to promote ourselves to clients to deepen and increase their awareness of wealth management. We have to be increasingly customer oriented and to have a deeper perception of and focus on the client.

We have a specialist research team that focuses on the domestic capital markets and the state of the economy, and we issue a regular report to our sales teams across various channels, which are then distributed to our clients for free. We also regularly visit our clients, particularly our biggest banking clients at Agricultural Bank of China, on a regular basis.

I visited ABC’s main Sichuan branch recently, where I observed that we already provide securitized products to clients there. That’s very impressive, as it shows that we not only have a highly advanced offering, but also increasingly highly advanced clients. 

Lin Caiyi 35

LC, Guotai Guotai Junan is a special company. Brokerages usually have strong research teams, but they tend to focus more on transaction-based research, as well as on what stock or financial product to buy. But only Guotai Junan has the same sophisticated range of product offerings and the ability to allocate resources so effectively and efficiently. Our aim is to build a tailored investment portfolio for each of our high-end clients. Our wealth management team was first rolled out in 2012, and we focus on key services such as foreign-currency risk. This is key, as our high-end clients are increasingly keen to place and invest their assets overseas, and this means that we need a sophisticated foreign exchange services department. We are educating our clients about the fixed income market and about nontraditional investments, such as collecting everything from art to wine. We also look at equities and place greater importance than ever on Chinese and global macroeconomic development. And finally, we help our clients to decide when it’s the right time to invest in real estate and in domestic or foreign stock markets and when to reallocate their investment portfolios. 

Emily Gu35

EG, UBS At UBS, we have dedicated and strong teams to take care of branding, marketing, public relations, events, sponsorship and so on. We are investing in these areas and through various unique events to share our experience and values with our clients. For example, art is an area of our focus. For many years, we have sponsored the Art Basel fair in Switzerland, as well as the Beijing Music Festival in China.

Euromoney More wealthy Chinese people now move some of their personal assets overseas. As capital controls ease, that number will rise. How are you looking to help your clients export and manage their wealth outside the mainland?

Yin Jinqiang35

YIJ, ABC Our clients increasingly want to manage some of their wealth overseas, and we need to make arrangements for that. Some of our clients are looking to buy foreign real estate, so we are working hand-in-hand with foreign banks. Other customers are keen to direct more of their investment capital overseas.

We are beginning to build out our overseas branch network, but we are still waiting on licences in many jurisdictions. Currently we are using our branches in Hong Kong and Singapore to help relocate clients’ capital overseas. In future, when we have secured the appropriate licences to operate overseas, our wealth management expertise will increase exponentially. We will offer a wider range of better wealth management services overseas to our clients.

Jing Wang35

JW, CMB From a client’s point of view, we can offer a range of foreign investment channels and opportunities, from the QDII [qualified domestic institutional investor] scheme, through to investing in overseas stocks via specialist foreign funds. Some wealthy Chinese clients have already emigrated, or partially emigrated, and the portion of their assets that sits overseas needs to be looked after in careful ways. Maybe these individuals don’t have much experience in how to manage their assets overseas, and we look to ease their minds and worries. And this is important as we track these clients and we see that the amount of Chinese assets that are held and invested overseas is on the rise. 

Lin Caiyi 35

LC, Guotai Wealthy citizens increasingly put their money to work outside the mainland, as they see foreign markets as a safe and good place in which to invest. A lot of families form trust vehicles overseas, or invest in private equity firms and put their money to work in them. For others, the main reason to put your money to work overseas is for pure diversification purposes. At least one-third of rich Chinese individuals have placed an average of one-third of their total assets in offshore jurisdictions, and this number is on the rise. More wealthy people are putting their money to work outside China. 

Emily Gu35

EG, UBS The further opening up of the capital account in China will present great business opportunities to foreign banks such as UBS, who have strong global networks and expertise. Our value proposition is to bring superior international advice and solutions to our domestic clients in China. We have established a structured and robust CIO investment process that brings together a global network of 900 global expert analysts, economists and strategists from the fields of wealth and asset management and investment banking, who then provide our clients and client advisers with a house view on investment.

An example would be the QDII scheme, which is a good option for outbound investment: we help our clients to access the European equity market through QDII funds. We expect the launch of the QDII2 scheme to substantially boost overseas investment.

Other examples include the desire of clients to buy a chateau in France, or property in the UK or Australia, or to acquire another company. UBS is the right choice as a wealth management partner, as we have a global platform and strong knowledge and a wealth of resources to help our clients to achieve their aims.

Liu Feng 35

LF, Guotai We are heavily focused on ensuring that we keep up-to-date with new policies and regulations that affect wealth management services, both at home and abroad. We coordinate our Hong Kong and mainland operations to offer clients a truly global distribution network. We were one of the earliest Chinese brokerages to offer and achieve this. We call ourselves a securities firm, not an investment firm, but this is a distinction that we are looking to change.

To promote ourselves, we run sailing competitions and invite top clients to our offices to educate them about products such as family trusts and wealth inheritance. By going above and beyond, we have earned wider recognition from clients for our range of services. Getting our clients involved and engaged in understanding wealth management is a key step in the long-term transformation of mainland brokerages. This is key to our future.

In the future, premium wealth management services should be deeply rooted in the securities industry. At the moment, too few mainland brokerages focus on wealth management as a central tenet of their businesses, and this needs to change. There’s a long way to go, but we are well on the way to diversifying and building our business.