News Column

Asian millionaires now turn to independent wealth advisers

May 25, 2014


Singapore: When the value of his $20 million portfolio plunged in the 2008 global financial crisis, luxury car enthusiast Gerard Tan followed a growing trend among Asia's elite investors by turning to an independent adviser for help.

His bank had put most of his cash in volatile emerging market bonds, which were hammered by the financial turmoil.

Tan, who asked that his real name not be used, kept his money in the bank, but engaged the services of an adviser unrelated to the institution in order to staunch the losses.

Six years after the crisis, a growing number of Asia's millionaires are turning to independent wealth advisers, who offer professional advice for a fee much like doctors and lawyers do.  Without pushing clients to buy financial assets, they offer an alternative to wealth managers working for private banks, which traditionally generate revenues on commission.

Banks put the focus on selling and this can sometimes lead to risks being overlooked in favour of revenue, according to analysts.

"My positions were restructured and portfolio risks were managed," said Tan, a publicity-shy father of two who owns a range of high-end cars.

"I feel a lot more comfortable now about my market exposure," added the self-made businessman whose assets are now more than $40 million.

An exporter of manufactured goods in his 40s, Tan had heard about independent wealth advisers being quite popular in Europe and readily agreed when approached by a friend to try a Singapore-based firm.

'Growth trend'

"The concept and acceptance of independent wealth managers is certainly on the growth trend," said Justin Ong, Asia Pacific asset management leader at consultancy PriceWaterhouseCoopers (PwC).

This growth "is due to the demand for more transparency and also objective client service", he told AFP.

Most of Asia's investing public still favour commission-based selling, but the ultra-rich and "more sophisticated families" are more open to objective advice from independents, Ong said.

He added that while Asia's wealthy still prefer to invest in property, stocks and bonds, "passion" investments like yachts, wines or private jets are preferred by a niche segment.

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Source: Times of Oman

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