A narrative taking hold in Asian wealth management circles goes something like this: “There are too many banks, too many financial advisors and too many asset management companies, chasing too few customers. Something has to give. Companies will need to exit or merge.”
CEOs, wealth management heads, sales people and finance directors are wondering which competitors will blink first and graciously exit the playing field, leaving ripened fruit for the picking.
That narrative is utterly wrong. Asia is neither over-banked, nor over-advised. There is not too much competition among asset managers.
What is true, however, is that there is too much competition among wealth management firms that have absolutely no idea how to express coherently, clearly, and with punch what they stand for and why an end customer should select their services.
Where are the industry’s Apples?
Asian wealth management marketing, across the spectrum, suffers from an almost mind-numbing blandness. The advertising from many wealth managers resembles the approach taken by PC companies decades ago. Stock imagery and slightly different performance specs comprised thousands of PC ads and marketing campaigns. It ultimately meant nothing to the average consumer and created zero tangible brand intimacy. In 1997 Apple posed the rhetorical challenge, “Think Different”, and the rest is history.
"Wealth managers all put the client first. They are all passionate about your money. They are all carefully searching the markets for the best ideas. They all have long experience and talented staff and, and, and… (we have all fallen asleep by now)."
Performance, of course, is important. But what Apple inherently understood was that the power of the devices themselves was meaningless unless a consumer had an inspiration to do something with that power.
So, too, the wealth managers. They show little difference in their message. Apparently, they all put the client first. They are all passionate about your money. They are all carefully searching the markets for the best ideas. They all have long experience and talented staff and, and, and… (we have all fallen asleep by now).
Recently the CEO of Standard Chartered lamented the fact that private bank offerings in Asia were too similar. It is not just the offerings that are the same, it is also the message. Most Asian clients have almost no idea why they should choose one wealth manager and not another to manage their money. Therefore, many consumers, either the average Joe or the High Net Worth superstar, don’t give that money to any wealth manager.
What those potential clients do is buy property – hard assets. And once they have that, they buy more. The property markets of London, Sydney and Vancouver are being propped up by Asian wealth. An architect who worked on the Battersea Power Station -- a prime London brownfield site converted to residential housing – said it was sold in its entirety in one afternoon to Malaysian investors.
That is a vast amount of wealth that exited Asia and is unlikely to return anytime soon. Much of it could have gone to wealth managers. But the fact is, it represents a failure of marketing.
Hone an individual message
In 2014, third-party asset and wealth managers managed 24% of US household wealth. That has grown from only 2% in 1980. Quite simply, the industry has persuaded US households to trust it with more of its wealth (the US has more than half of the world’s mutual fund assets: $18.2tn).
That situation could potentially be replicated in Asia today. Asia has the highest number of HNWIs globally with more than $15.8trn in wealth. Yet only $1.7trn of total private wealth is managed in mutual funds.*
If the players in Asia’s wealth management industry want to grow faster than the market, they need a radically different, but focused message. Each company needs to do some soul searching and decide their own reason for existing from their Asian customer’s point of view.
It can be done. In wealth management, Bank of Singapore is an example of a brand that has done a superb job in a short time. BoS took a moderate private bank proposition (the old ING Private Bank) with modest assets and a generic offering, and through a strong marketing campaign turned it into a force to be reckoned with. The “timeless Asian values of hard work…” is a message that resonates deeply with their target audience.
It is simple, it is clear and it speaks to their potential customers with authenticity. Most people think BoS punches way above its weight. What that really means is that they are gathering assets, and more importantly, clients, faster than the industry itself is growing.