Around 10 years since the first independent asset management firms appeared in Singapore, the relatively slow growth of this industry segment has largely been due to a tougher regulatory environment.
On the one hand, this has been good, to clean the market and give an opportunity to some of the larger players to gain economies of scale.
Indeed, says Steve Knabl, chief operating officer and managing partner of Swiss Asia, and also president of the Association of Independent Asset Managers (AIAM) Singapore, a critical mass is needed to be able to survive today. As a result, the model of one- or two-person independent firms is no longer really viable, nor even practical, given compliance obligations.
Openings for growth
Knabl believes that more cross-industry communication and collaboration is needed to accelerate growth in the independent sector. “Banks also need to understand that they can work together with independents when their private bankers leave.” For example, better negotiations need to happen between the individual and the bank ahead of any move, to smooth the transition and work in everyone’s favour.
Many private banks are trying to adapt their business models and look at technology to deal with a new operating landscape. This potentially provides an opportunity for independent firms to compete, in being able to offer private bankers an environment in which they can operate with their clients and still be well remunerated, says Knabl.
This highlights the importance, however, of being able to communicate what the independent model offers, he adds – in terms of the independence to the banker and more value for their clients from greater access to a wider range of products and advice.
HNW clients, especially in Singapore, are also increasingly aware of the model and its benefits – and are willing to test it out. So the AIAM needs to spend more time focusing on communication to them too, adds Knabl.