Wealth management services double in past year

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AGGRESSIVE EXPANSION: The market for high net worth banking surged after two banks were approved to offer products with higher risk profiles, the FSC said

Taipei Times – The number of local high net worth clients and their total assets under management doubled from a year earlier as local banks expanded their wealth management operations, Financial Supervisory Commission (FSC) data showed last week.

High net worth clients are defined by the FSC as individuals who have assets worth more than NT$1 billion (US$32.84 million).

The number of such local clients grew 124 percent annually to 3,934 as of the end of February, while the assets under banks’ wealth management programs rose 118 percent year-on-year to NT$484.1 billion, FSC data showed.

“Banks have been aggressively expanding their wealth management business. We have seen some banks readjust their structures and recruit more professionals to expedite the growth,” Banking Bureau Deputy Director-General Lin Chih-chi (林志吉) said last week.

The wealth management market grew significantly larger after E.Sun Commercial Bank (玉山銀行) and Taipei Fubon Commercial Bank (台北富邦銀行) late last year received FSC approval to provide services to high net worth clients, Lin said.

Aiming to develop Taiwan as a wealth management hub, the FSC has since 2020 allowed banks to offer high net worth clients products that are more complex or have higher risk profiles, such as structured notes denominated in foreign currencies or derivatives linked with local shares.

The FSC has approved nine banks to offer such products.

About 50 percent of high net worth clients preferred deposits as a primary product as of the end of February, up from 49 percent in October last year and 46 percent in June, Lin said.

Such clients intend to use deposits to hedge against uncertainty in the stock market while earning higher interest amid the past year’s rate hikes, the FSC said.

The high net worth clients also have an increased appetite for bonds that earn higher yields, with bonds accounting for 9 percent of overall wealth portfolios as of the end of February, up from 7 percent in October last year, it said.

However, wealthy clients became less interested in insurance policies, as such products comprised only 16 percent of their portfolios, down from 18 percent in October last year, while investment funds remained stable at 13 percent, as such funds provide risk diversification, the FSC said.

Image by: Taipei Times

 

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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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