When high net worth individuals pay a premium to get top-notch service they expect plenty of close attention, and JP Morgan’s private wealth management business in Asia says it prides itself on delivering precisely that.

When high net worth individuals pay a premium to get top-notch service they expect plenty of close attention, and JP Morgan’s private wealth management business in Asia says it prides itself on delivering precisely that.

While some private bank clients may only see their relationship manager and just occasionally, an investor (investment advisor), the blue-blooded bank reckons that this sort of low-coverage ratio is not good enough, particularly at a time of rising service expectations.

And a team-based approach, where egos take a back seat to being part of a group, is just the kind of business philosophy that Peter Flavel, chief executive of JP Morgan Private Wealth Management in Asia, likes. A former private banking boss in Asia for Standard Chartered, the sports-mad Flavel has been in his current post for almost two years. A devotee of rugby, cricket and other team sports, Australia-born Flavel warms to the “team” approach of this bank.

“While the banker is the prime co-coordinator and the key contact, it is a role to promote the very best thinking of the bank for the client. When the coverage model incorporates several people, it is the advice of a team rather than an individual. A client who walks into the London office will get the same consistent investment philosophy as if they were walking into Singapore. You are paying for the quality of our investment views and clients want these to be extremely well researched by smart people,” he told WealthBriefingAsia in an interview.

“A lot of the advice that people get nowadays can be too dependent on who they happen to see and their personal views, rather than a disciplined high conviction house view,” Flavel said.

“We have got what I believe to be the best client coverage model in this industry. It is built around an integrated team. I see it as the future of advice in private wealth,” he continued. “We have all the resources that we need internally. Our global research capacity is second to none. You need to have critical mass to succeed in Asia.”

Flavel is certainly in ebullient mood. “I am coming up to having spent two years at JP Morgan and I couldn’t be happier – we're a bank with a terrific brand that resonates so well with private clients.”

He is working at one of the big-hitters in global wealth management although, Flavel says, size is not the driving objective. Currently JP Morgan Private Bank has over 600 colleagues in Hong Kong and Singapore and oversees $800 billion globally. Flavel’s colleagues serve clients with a net worth between $10 and $30 million.

Relationships and coverage

Flavel spent some time telling this publication about the client coverage approach of the bank. He referred to the usual business model which is that there are usually 10 bankers for every “investor”, or investment professional. “In the street it is the banker’s choice if and when you use that “investor” and they tend to be used very sparingly. In our model, however, every client has a banker and an investor covering them,” he said.

“Clients want to meet specialists so it is not unusual for a client meeting to have three to four relevant advisors in it,” Flavel said.

A trend that Flavel sees – and has been noted by other industry figures – is a rising interest by Asian investors into discretionary wealth mandates, although the self-directed approach is still very much alive. “Discretionary investment mandates are a core offering and we believe we have one of the highest percentages of client monies in these mandates across Asia. You know that a client trusts you when you are given the discretion to manage their wealth. Investment ideas tend to be thematic,” he said.

“We are seeing a shift to discretionary management and that is obviously why discretionary portfolios are growing….. There is a maturing of the private bank industry underway in Asia when it comes to discretionary management"

“We have a much larger percentage of client monies in discretionary portfolios, [than many peers],” he said.

Grow your own

A concern of Flavel’s is the need to breed new talent within the industry, a fact underscored by the constant merry-go-round of moves between firms in the region.  

“We hire direct from university into the analyst and associate programme here. To be an analyst takes 3 years of training, followed by another three years towards associate level, he said. “We believe it to be the best training in the industry,” he continued.

“I think the industry needs to work through how to better grow its own talent.”

Flavel does not turn up his nose at entrants from the investment and commercial banking side of the business. One of the benefits of “lateral hires” from the commercial banking side, he said, is that such people understand credit, profit and loss accounts, and how to bring in specialists. “They are very used to the concept of account planning and how to develop relationships over a period of years,” said Flavel.

Joint ventures

In recent times a number of Western firms have signed up pacts with local players to widen and deepen wealth management exposure. A few weeks ago, Australia’s ANZ got into bed with Switzerland’s Vontobel to provide each others’ clients with services; a year ago, Julius Baer inked a similar deal with Australia’s Macquarie.

Asked about some other firms' joint ventures, Flavel chose not to comment on specifics but preferred to make a more general comment: “If history is a guide banks have had a difficult time making them work well.”

Family offices

As seen with other firms such as UBS, JP Morgan sees the family office market, still relatively youthful in Asia, as having enormous potential.

JP Morgan has a specialist offering for family offices, a growing area of business, he said. “One of the things family offices look to us for is our alternative asset offering. It is one of the strengths of the bank – our expertise on hedge funds and private equity,” he said. “The amount of first generation money being generated in Asia is still in the low-teens (percentage growth),” he added.

Peter Flavel seems to be thoroughly enjoying life since he made the switch to JP Morgan. So long as the results of favourite sports teams and JP Morgan’s revenues continue to move in the right way, of course.