Product shift in Taiwan, Morgan Stanley in India, UBS gets OK from Saudis. In the face of global stock-market declines and the U.S. financial-industry crisis, Taiwanese investors have bailed out of mutual funds and structured notes -- the mainstays of what passes for wealth-management in Taiwan -- to seek refuge in more conservative instruments.

Difficult year

As a result, the private-client arms of Taiwanese banks and are hurting, with some reporting that their wealth-management business is down as much as 40% year over year.

"This will be a very difficult year for wealth-management business," Sui Jung-hsin, director of Taipei-based Chinatrust Financial Holding's wealth-management department, told the Taiwanese publication CENS.com last week.

With derivatives and pooled equity plays declining in popularity, the article says that Taiwanese wealth managers are pushing insurance and annuities.

Citigroup plans to close Smith Barney's operations in Taiwan this year as the U.S. bank revamps its approach to wealth management in Asia.

Undiluted

Morgan Stanley is building out its Private Wealth Management (PWM) operations in India. The New York-based bank has hired Neena Prasad, formerly with Smith Barney, as a private-client advisor for its northern India region.

"Neena's deep understanding across asset classes and her extensive banking experience will play an integral part in our offering," says Himanshu Bhagat, Morgan Stanley's head of PWM sales in India.

India led the world in high-net-worth population growth, adding 23,000 new millionaires for a total of 123,000, a gain of 23%, according to the 2008 World Wealth Report, which is published by Merrill Lynch and Capgemini.

In a bid to capture more of the country's growing investment-banking, retail-brokerage and wealth-management markets for themselves, several big international firms have unraveled joint ventures with local players.

Morgan Stanley pulled the plug on Mumbai-based JM Morgan Stanley, an eight-year-old joint venture with Mumbai-based JM Financial, a few months ago. Goldman Sachs ended a partnership with Indian businessman Uday Kotak in March 2006. Merrill went from being the junior partner in a joint venture with Mumbia-based DSP to owning nearly all of it in 2005.

Given its troubles, Zurich-based UBS may have had things in mind other than the attractions of India's growing market for private-client products and services when it decided to back away from its plan to buy London-based Standard Chartered Bank's Indian mutual-fund business.

Kingdom

But UBS is looking to expand its operations in the oil-rich Middle East. The bank has just received permission from Saudi Arabian authorities to provide wealth-management, asset-management and investment-banking services in the kingdom.

UBS, which has offices in Egypt, Lebanon, Israel, Bahrain and the United Arab Emirtaes, is also looking for regulatory approval to do business in Qatar.

The Middle East's high-net-worth population grew 17.5% last year, according to the World Wealth Report. Their combined assets came to approximately $1.7 trillion. -FWR

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