Advisory excellence in Asia – empty words or finally a reality?

In an increasingly knowledgeable client market providing sophisticated, high-quality advice allows providers of wealth management services to differentiate themselves.

Typically, most private banks aim to achieve “excellence” using a structured advisory process: assessing a client over a number of elements, including risk profile, and developing a customised solution.

In Asia, however, client advisers rarely follow this process for two reasons: it is a young industry and the current incentive structures for the front-line staff.

Although the last financial crisis was an exceptional situation, it has brought into focus the need for a comprehensive client analysis as a cornerstone of high-quality advice.

In order to deliver suitable services a constant learning process is required, driven by both providers of financial services and the clients.

High-quality advice in rising demand

The demand for high-quality advice is made more acute as Asian clients are usually highly hands-on in making investment decisions compared to their European counterparts.

They are also generally more willing to take risks and are more receptive to innovative products.

Despite Asian clients continuing to taking their own decisions, the need for advice still increases, especially for the initial risk assessment.

The Asian market has several notable features that differentiate it from more mature ones.

Firstly, the largest proportion of assets generally remain with the first generation, and for private banks that means the demand for wealth planning services will increase.

Secondly, there is generally little distinction between business and personal assets, therefore an adviser who can offer solutions in both areas adds more value to their clients and can obtain a larger share of their assets.

These factors place high demands on client advisers and other wealth management specialists.

A few years ago, Singapore’s Institute of Banking and Finance installed occupational groups and corresponding standards of competence for wealth management.

Even so, while the foundations for implementing these requirements had long since been established in the form of the Wealth Management Institute, supported by government subsidies for training, the implementation of these standards is only slowly making headway in the industry.

In addition to the quality standards of advisers, the sheer availability of the required number of these trained specialists remains a key challenge for the industry.

Correct, timely decision making

The opportunities for growth in Asia remain enormous.

To take advantage of this, major adaptations to systems, processes, and change management approaches are necessary in order to successfully develop a business in a sustainable manner.

The correct use of expert knowledge will play a central role in the quick development and sustained implementation of solutions in Asia.

Many private banks still work with the “everything for everyone” approach, with no clear differentiation for client segments.

Advisers often have too many clients to be able to really focus. Inadequate processes and a lack of suitable systems compound this.

Furthermore, advisers require continuous support in the provision of advice to their clients, especially for cross-border activities, where the requirements change constantly.

In addition to the necessary and continuous advanced training, advisers must also be able to rely on an efficient infrastructure to assess their client’s needs and to develop robust solutions.

This can be an important factor, especially in Asia, for companies who wish to retain existing and attract new advisers.

Central to any change is a universal vision carried by every employee, regardless of their level.

Resulting initiatives need to be incorporated within a uniform strategic framework to ensure resources are effectively used, employees are committed thanks to logical and consistent communication, and the interaction between the headquarters and the Asian management team is optimised.

A shared vision also helps convince clients about the benefits of an ongoing relationship, as opposed to a pure transaction-oriented business.

Mario Bassi is managing director and Asia head at Solution Providers Singapore, Management Consulting


Willis Towers Watson Asia Pacific business receives accreditation

Willis Towers Watson, the global advisory, broking and solutions company, today announced that its Insurance Consulting and Technology (ICT) business in Hong Kong, Singapore, Malaysia and Indonesia has received accreditation under the Quality Assurance Scheme (QAS) by the Institute and Faculty of Actuaries (IFoA).

Willis Towers Watson was one of the first organisations to be accredited when the IFoA introduced the Scheme in the UK back in 2015. “Willis Towers Watson was one of the first organisations to be accredited when the IFoA introduced the Scheme in the UK back in 2015,” said Mark Birch, global leader, professional excellence for Insurance Consulting and Technology. “Professional excellence is a core value of Willis Towers Watson and this QAS accreditation recognises that. It was a natural step for us to seek to extend the accreditation to our Asia Pacific practice,” said Birch, who attended the recent IFoA Asia Conference in Bangkok where, in recognition of the accreditation, he received a trophy on behalf of the practice.

He added: “We are committed to leading and sustaining professional excellence. This means ongoing communication to educate and engage our colleagues in our Professional Excellence approach; we provide colleagues with tools and clear guidance to meet our standards and recognise and reward for outstanding contributions to Professional Excellence.”

The IFoA has over 28,000 members worldwide. It encourages actuarial employers to provide an appropriate environment and support systems to help actuaries produce high quality actuarial work. To gain the accreditation, the offices underwent a vigorous independent assessment that examined areas such as quality assurance, conflicts of interest, employee development and training, along with creating an environment that supports speaking up about issues that cause concern. It also looked at client relationships, including engagement and communication, and the handling and resolution of any issues raised.

Bejiing China

Top 30 Chinese firm profits reached £1.4bn in 2016

The combined net profits of the top 30 highest-grossing Chinese law firms reached £1.4bn (RMB12.66bn) last year, The Lawyer China Top 30 2017 report reveals.

In an industry first, this year’s The Lawyer China Top 30 report – which will be available exclusively to purchase online on Monday 2 October – is able to shed rare light on the top 30 Chinese firms’ profitability. In the past three years, the report’s analytics were largely based on firm’s headcount and revenue figures.

Against an even richer set of data and more quantifiable results, the data shows the so-called red circle, a group of eight prestigious firms, outperform the rest of the Top 30.

The Lawyer first coined the “red circle” term in its first China Top 30 report in 2014. The group consists of Commerce & Finance, Fangda Partners, Global Law Offices, Haiwen & Partners, Jingtian & Gongcheng, JunHe, King & Wood Mallesons (China), JunHe and Zhong Lun.

Since then, it has gained wide popularity within the Chinese legal community as well as law graduates when it comes to recruitment. The “red circle” refers to a group of eight Chinese law firms that are perceived as prestigious or high-quality, similar to the magic circle firms in the UK and white-shoe firms in the US.

Although their sizes vary largely, as revenue range from RMB2.48bn to RMB280m and total number of lawyers range from 1,402 lawyers to 120 lawyers, this group has much higher average revenue per lawyer (RPL), revenue per equity partner (RPP) and profit per equity partner (PEP) compared to their top 30 rivals (see table below).

By RPL, the red circle firms’ average stood at RMB2.33m, more than double the average of the rest 22 firms in the top 30. By PEP, the red circle scored an average of RMB6.5m last year, also doubling the other 22 firms’ average figure.

However, two firms outside of the conventional red circle group, Beijing-based Han Kun and Shanghai-based LLinks, stand out from the crowd having exceeded the red circle threshold across the RPL, RPP and PEP metrics.

As a matter of fact, Han Kun has claimed the top spot as the most profitable firm in China, with an estimated profit per equity partner of RMB9.6m (£1.07m). This would put the firm in the 10th place by PEP in the UK. According to 2017 The Lawyer UK 200 research, UK firm Travers Smith posted a PEP of £970,000 in 2016/17 while Michcon de Reya’s PEP was £1.1m. They were ranked 10th and 9th respectively by PEP among the UK’s 200 largest firms. Han Kun is also ranked at the top by RPP, as each partner generated an average of 12.86m revenue in 2016.

Fangda, one of the conventional red circle firm, came second by PEP, which was estimated at RMB8.5m (£946,000). It is followed by Global Law Offices and Llinks. JunHe came fifth. Zhong Lun, Commerce & Finance, KWM, Haiwen & Partners and Jingtian & Gongcheng make up the rest of the top 10 firms with the highest PEP.