EXCLUSIVE INTERVIEW: RBC Aims To Help HNW Clients In Asia Sleep At Night - Part 2

Chrissy Coleman

18 December 2012

This is the second instalment of a two-part interview. To see the previous article, click here.

The clients

Asians are traditionally very hands-on with their investments, seeking excitement and the thrill of a “win” is very much part of their livelihood, said Ng.

However, he said that often investors are too emotionally-driven when in control of their own wealth, not following the basic principles of investment, which consequently leads to “buying high and selling low”. As a result of many lessons learned throughout the financial crisis, and the younger generations lining up to take over family riches, people are starting to want to “listen” a bit more, suggesting a gradually adoption of discretionary wealth management in the region.

Unsurprisingly, for a “prudent” firm, with “conservative” clients, as Ng calls them, the human touch plays a key role at RBC Wealth Management. Ng therefore said it does not plan on implementing any technologies to facilitate self-managed executions. However he did reveal that a technological platform for clients to access information on their portfolios will be available next year, as part of the 2013 business model-revamp.

New business model – hiring strategy

Prior to the growth phase, in the “midst of the building stage”, RBC Wealth Management is not currently hiring many front line staff. Perhaps a little defensive of this gradual approach, Ng said that while other new names are coming into the wealth management space in Asia, and diving straight into hiring front line staff, “we don’t believe that is the right strategy, or a viable strategy”. He added: “We will start to hire more in 2013.”

However, as part of the new business model, the bank is already hiring “champions” (product specialists) for each asset class who will have the link to the global RBC capabilities, and investment consultants, who will coordinate with these specialists and the wealth managers, or clients directly.

“We’ve started hiring investment consultants already – one in Singapore and one will be starting in Hong Kong in the very near future (April). We have filled the FX position and still have one position open for fixed income,” he said.

What attracts talent to the RBC brand, besides the reputation of financial stability, is the Canadian charm. “We are a bit more friendly,” said Ng. “I’ve been with the bank for 16 years and I would say that our culture plays a very big part in influencing how we conduct business,” he added.

Caution vs realism

With its low risk strategies and step-by-step growth plans, is RBC Wealth Management being overly cautious, to the point where it might be missing out on higher yielding investments and gaining market share in the competitive Asian scene - or is it simply being realistic? From what Ng said, it sounds like the bank is merely responding to client needs - wealth preservation has proven to be the priority for high net worth individuals, and after over four years of financial turmoil and being in the dark as to what the year of the Snake (2013), has in store for them, it’s not hard to believe that a good night’s sleep is sounding pretty appealing right now.

As reported last month, end-October revenue at the firm's US and international wealth management business climbed up from $482 million to $517 million, while revenue at the Canadian wealth unit also rose during the quarter from $429 million to $470 million.

Meanwhile, across the group, RBC logged net income of $7.5 billion in the final quarter, up $1.1 billion or 17 per cent from a year ago. Earnings from continuing operations of $7.6 billion were up $620 million or 9 per cent from the previous year.