Credit Suisse has launched a digitally-enabled advisory mandate service that allows private banking clients in Singapore and Hong Kong to invest in retrocession-free share classes of funds, ETFs and hedge funds.
There is an active debate ongoing over rebates and retrocessions in Asia, as clients become concerned that banks may not always offer them the best products, preferring to promote those that offer greater kickbacks or higher trailer fees. Regulators are pressing for greater disclosure, and the Association of Banks in Singapore, which includes 158 local and foreign members, has prohibited retrocessions for products purchased under discretionary portfolios.
‘This [launch] can be seen in the context of the increasing regulatory move towards disclosure of retrocessions, or in some jurisdictions the removal of retrocessions for distributors,’ a Credit Suisse spokesperson told Citywire Asia.
Currently, a number of external asset managers in the region work on retrocession-free models, charging clients a flat fee only based on the percentage of assets under management or payment by-the-hour.
Credit Suisse Invest will be available to professional investors and accredited investors maintaining accounts in the Singapore and Hong Kong booking centres.
Plugged into the Credit Suisse Private Banking app, there are two service levels for the service – one for those with above $1 million and another tier for those with over $10 million.
Depending on the investment amount, there are two fee structures – either a flat fee or a hybrid fee that includes brokerage fees.
The service was first introduced in Credit Suisse’s Swiss booking centre in 2015 and currently manages CHF 45 billion ($46 billion) of assets under contract.
‘Credit Suisse Invest is not what is commonly referred to as ‘robo-advisory’, instead it is a highly individualized and tailored advisory solution that takes into account the client’s needs, objectives and preferences, with the client making the final decisions on the chosen solution,’ said Tan We Mei, Credit Suisse’s head of portfolio solutions Asia Pacific.