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HK’s private wealth sector is about to get busy

HK’s private wealth sector is about to get busy

Hong Kong’s Private Wealth Management Association (PWMA) has set its agenda for the year. Grooming more relationship managers and strengthening ties with Switzerland is on the cards.

Founded in 2013, the 45-member association has become more active in the past couple of years as it gears up to serve the offshore interests of wealthy mainland Chinese clients.

In fact, Hong Kong’s $800 billion wealth management industry is set to double in assets by 2021, driven by flows from China.

A number of mainland Chinese banks are also making their presence felt in Hong Kong, and it is visible in the membership of PWMA. Noah Holdings, CMB International Securities and Haitong International Securities have all joined the body this year.

As a result, growing the pool of frontline staff and upgrading their skills is crucial to the industry, said PWMA managing director Peter Stein.

Private banking captures less attention than corporate banking in Hong Kong, for example, so not many people start their career in the space, leading to a lack of bankers.

‘We figured there are about 3,400 frontline staff in Hong Kong and that number hasn’t changed drastically in the last couple of years, but AUM [assets under management] is growing, it's growing considerably,’ Stein told Citywire Asia.

To increase the pool of bankers, PWMA is expanding a pilot apprenticeship programme with the Hong Kong Monetary Authority, giving university students a chance to get front-to-back exposure to the private wealth management industry, including compliance operations, over two summers.

What began with 20 students last year has now been extended to 50 students, who are being placed within 13 firms.

Meanwhile, to groom existing bankers, the association is improving its voluntary training framework for relationship managers, called the Enhanced Competency Framework (ECF). The ECF was launched back in 2014 and it’s time for an upgrade this year, Stein noted.

‘We are focused on module one given that it's probably the more technically complex side of the ECF, and we felt that it was the space that needs closer monitoring to ensure that it's up-to-date,’ disclosed Stein.

The curriculum comprises two modules, where the first one covers investment products and wealth management, and the second covers ethics and compliance.

Swiss plans

In January, the PWMA announced a memorandum of understanding with the Swiss Bankers Association to set up a joint working group as well as facilitate a talent exchange programme for bankers from both jurisdictions.

‘So for the people in Hong Kong, who don’t necessarily have that opportunity, they can spend some time working in Switzerland – understanding the market and regulatory environment there,’ Stein said.

‘The same thing for bankers from Switzerland too, who might not have direct exposure to Asian markets.’

The joint working group is looking to organise a financial seminar that will be hosted later this year. For now, the focus is solely on the Switzerland partnership, said Stein, and the PWMA is not looking at other markets.

‘Our hope is that we can get the planning going and then we’ll look at implementation. Ideally we’d like to get things off the ground this year but we have to see logistically what timing works for both sides,’ he concluded.

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