Asia's wealthy are taking a more conservative route by putting their money into stocks and bonds and turning their backs on so-called 'exotic' investments like hedge funds and derivatives, Bloomberg reports.

In an interview with DBS Group, the publication found that the collapse of Lehman Brothers last year and the growing number of lawsuits filed against private banks had destroyed the reputation of derivatives.

"Their (Asian investors) investment activities are very basic ones, like what we used to see in the late 80's and 90's, but the only difference is they carry much thinner profit margins today. This scares me," said Kwong Kin Mun, DBS' private banking head in Singapore.

Prior to the Lehman collapse, the majority of private-banking revenue came from alternative financial products. Mr Kwong reportedly said that bankers these days are already finding it difficult to close deals with clients who are looking for just the basics.

As this publication has noted, there are signs that risk appetite is returning among investors in parts of the world. A recent report by T Rowe Price, the US investment house, said that the underlying drivers of emerging market growth in Asia remain intact. Even so, strategists have been cautious, a stance mirrored by their clients.

"Clients are saying, 'I don't need the exotic complex stuff since the basic products achieved the same objective.' For them, cutting-edge means it cuts," Mr Kwong was quoted to have added.

For the first six months of 2009, DBS' wealth management unit saw a 53 per cent drop in net fee income to S$21 million ($14.7 million) compared to the previous year. This decline happened despite a $3 billlion growth in assets during the said period.