A prominent figure in the Asia-Pacific executive search industry catches up with this news service, talking about the trends he sees unfolding in the sector and how it is being affected by the pandemic, and other forces.

Technology, changing client expectations and moves in the geopolitical chessboard have already been shaking up where and how private bankers and wealth managers operate. The COVID-19 pandemic has accelerated some trends (remote working, use of digital tools), and interfered with others (ability to fly abroad to see clients, book business in specific locations). In the Asia-Pacific region, the competition between the hubs of Hong Kong and Singapore seems, at least on the face of it, to be favouring Singapore due to mainland China’s pressure on Hong Kong. Time will tell how that plays out. Elsewhere, countries such as Malaysia, Indonesia, Vietnam and the Philippines have their opportunities – and challenges. 

This news service talked to Danny Jones, founding partner of Huddleston Jones, the executive search firm operating in the private banking, asset management, external asset management, family office and capital markets sectors. He has commented on issues in the industry before, and we are pleased to catch up with him again. 

These comments are part of a wider set of articles which this news service is running to examine talent management, developments in HR and recruitment trends in wealth management around the world. For more information or to get in touch with the editors, email tom.burroughes@wealthbriefing.com and jackie.bennion@clearviewpublishing.com

Coming out of this crisis and the various lockdowns/suppression methods, what do you think will be the greatest and most enduring changes for private bankers and other wealth managers in Asia-Pacific?
Although there are many factors/contributors and considerations which will continue to follow these “lockdowns”, actually one of the most underrated long term affects we believe could be as simple as perception. We have always thought that many clients will always consider the face-to-face element essential when dealing with their wealth and that of their families… this may no longer be the case. 

The argument for totally electronic access, execution abilities and “fintech” may gradually (not instantly) become more acceptable to end clients. This is not a change for today which will sweep throughout the industry, more that it has proved that given the inability to meet, it can be acceptable and actually a positive to deal “electronically”. Interestingly, if we then take this a step further, banks which could not provide this, or effectively deliver these solutions may “push” clients to banks/institutions which can!

There is a lot of talk about how working from home will go from being a temporary emergency step to becoming more permanent. How far do you think this is correct? Some in-person meetings may have to happen (due diligence checks, meeting new clients with very complex needs) - what is your view?
We feel that “work from home” does not mean no face-to-face meetings. Where working from home limits the largest opportunity for contracting “a virus” due to the sheer volume drop of contact, the face-to-face meeting is still only one on one. Of course this is simplified when not considering air travel and the like. However, we also see a great many changes to the controls in place to board an aircraft and enter a country, so we feel this risk should be mitigated somewhat.

We also have to consider that for the vast majority of “people” - not just wealth managers - the working from home issue has had significant impact on the psychological well-being of individuals. If we consider the efficacy of them continuing doing that, I believe we would see a sharp downturn in productivity and drive for new business.

Will the way in which market heads, desk heads and other leaders of teams operate have to change due to new working arrangements in the medium term? Will reporting lines have to change?
I believe we have already seen a large change in this area over the last two years. Sales and content management and monitoring by scorecard on many facets of work have already seen improvements from a bank’s perspective. This has, of course, had an impact on layers and in some ways the “matrix” style of management many institutions have today. 

The question is how much emphasis is placed on tangible “objective” measurement, which is normally the realm of IT and electronic means, vs “subjective” personal calls by managers on the performance or “potential” of bankers. Although there are similarities, we still see a large difference between the “retail” styles of measurement versus that of a boutique.
 

Do you think that some banks might be letting under-performing staff go and recruiting more of their clients, possibly annoyed at a lack of communication, etc, threaten to defect? Do you think there will be a high turnover? What sort of firms might win from turnover and which might lose?
There is always a constant review on performance and staff. However, in these unprecedented times, it is not likely that a lack of communication has caused issues for clients. Bankers, in our experience, even though they have not been able to provide the personal face-to-face service, have connected regularly with clients. We would say that defection may be more relevant to clients and their inability to withdraw from certain investments or to make the transactions they wished in a timely manner; due more, in truth, to the banks IT access. 

There is an element of banks which give a more “flexible” investment approach to bankers possibly wining over the coming months. This is due in the main to the larger banks committing clients to an investment process which in fast turnaround times is damaging, resulting in margin calls and the like.

As you have said in the past, private banks have to offer a lot more to keep and attract clients these days - offering a full range of service and support, including helping people with their businesses, corporate financing, etc. Businesses will face a lot of stresses and demands post-COVID-19 - what sort of demands will there be for bankers with specialist skills?
This has never been more relevant, given the impact COVID-19 has had on personal and business wealth. The pain and setback for clients cannot be underestimated. Banks which can provide support/solutions for the client on both sides are going to be the front-runners over the coming months. Bankers will be keenly aware that if you are not there to support the wealth creation side, preservation will take a back seat in the next year.

Within the Asia-Pacific region, are there particular jurisdictions that you think might be busier than others, such as those which have handled the virus relatively well and are in better financial shape?
A particularly difficult question to answer with times such as this; is that we are dealing with an event which genuinely has not been relevant in modern times. Our first thought must be that when we consider regions we must also evaluate travel and how this has and will be impacted. Domestic business will of course be the easy focus for many institutions with the low hanging fruit of face-to-face meetings and no issue of air travel.

However, even this will be affected by the local rules in place with Singapore at least for the foreseeable future with tight restrictions on face-to-face meetings. This will, of course, vary as for example in Hong Kong, where restrictions are much lighter, closer to normal operating practices and are lightly legislated.