Wealthy people are increasingly drawn to structured products and diversified investments in light of market uncertainty, according to Standard Chartered Bank’s Eliza Law, who sees affluent clients putting more money to work in Hong Kong.
“Our clients’ interest in investing has grown,” Law, managing director and head of affluent segment and distribution, wealth and retail banking at Standard Chartered Hong Kong, said in a briefing on Thursday. “They are keen to enhance their investment knowledge and gain access to unique products.”
First-quarter data from Standard Chartered showed the number of clients who moved up the ladder from other segments to the private-priority tier – those with assets worth more than US$1 million – surged 45 per cent from a year earlier. Other segments include priority banking, for clients with more than US$100,000 in assets, and premium banking, for those with more than US$25,000 in assets.
This client “up-tiering” contributed to the bank’s double-digit growth in the first quarter from a year ago, Law said. That trend would be a “key source” for the bank to meet its ambitious goal of attracting US$200 billion in global wealth-management business from newly affluent people in the next five years, she added.
Greater interest in diversified investing and higher-return products, compared with time deposits, reflect how affluent clients are dealing with current economic challenges and global trade tensions.
Law said Standard Chartered offered a range of highly sophisticated products that catered to professional investors within the bank’s private-priority segment. The sales volume of these products grew 2.4 times from 2023, driven by certain principal-protected structured products linked to equities and interest rates.
Equities, according to Law, were a popular choice because this asset category provided more liquidity, allowing clients more flexibility in buying and selling these assets.
Hong Kong’s benchmark Hang Seng Index, for example, already advanced around 20 per cent this year, while the MSCI World Index rose about 6.4 per cent.
The strategy of Standard Chartered to operate bricks-and-mortar wealth-management centres in hot tourist areas across the city also helped sign up more clients and boost sales, according to Law.
Apart from upscaling staff skills, “the establishment of wealth centres and the special products offered to priority-private segment clients” helped grow business, she said.
The bank’s latest wealth-management centre is located at One Peking Road in Tsim Sha Tsui. A sixth centre in Central is expected to open later this year.
In February, Standard Chartered CEO Bill Winters unveiled a plan to invest US$1.5 billion in the bank’s wealth-management business over the next five years.
Half of that funding will go towards recruitment, with 25 per cent of new hires for wealth-management centres and 25 per cent for digital platforms. Hong Kong would follow these ratios, as Standard Chartered plans to hire around 100 wealth managers this year.
Standard Chartered is also focused on providing more of the so-called experiential services. These included meet-and-greet events with stars from Liverpool Football Club, which the bank sponsors, and hosting “soccer clinics” for the children of select clients, Law said.
Source: South China Morning Post
