Barclays’ decision to create an independent asset manager (IAM) team in Asia reaffirms that the IAM/ external asset manager (EAM) business model "is here to stay," according to Anthonia Hui, chief executive officer of Singapore-based AL Wealth Partners.
Late last month Barclays created a team to serve the sector and set the ambition to become a top three provider to these new class of advisers – a boost to the fast-growing independent asset manager industry in Asia.
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The move has been warmly welcomed by independent and external asset managers in Singapore, the main hub for this infant industry.
The IAM/EAM business "will continue to grow as it has done so in Switzerland in recent years," Hui added.
A concept well entrenched in Switzerland
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By GlobalDataThe Asian initiative for an independent advisory sector is based on a concept that is well entrenched in Switzerland.
Independent asset managers there manage assets of CHF500bn ($534bn), corresponding to a market share of about 14%, according to Finanzplatz Zurich. Some estimates put their share as high as 30%
The move by a major global private banking player like Barclays is also seen as a recognition of the harsh realities of doing business in the tough Asian wealth market, by using the IAM/EAM model as an alternative way of tapping clients.
Servicing the IAM/EAMs
The new Barclays platform will provide its custodian and execution facilities to serve clients of the IAMs/EAMs.
This is a way for the bank to optimise the infrastructure which it has built and invested over time, say analysts.
Instead of competing for advisory talent, such as highly-remunerated relationship managers to bring in clients, Barclays is instead servicing the IAMs/EAMs which will bring them clients and client assets without bearing for the cost.
‘Best of both worlds’
AL Wealth’s Hui commented, "This is the best of both worlds and clients are happy to see such development, especially with those banks that have a significant infrastructure in place already."
Asia’s IAM industry is still in its infancy, holding about an estimated 5% of total assets under management within the private banking industry.
"We expect this segment to grow at a much faster rate than the approximately 10% per annum growth rate of the overall wealth management industry in the region over the next few years," said Cedric Lizin, who has just been appointed as Barclays head of the independent asset managers segment, Asia Pacific.
30% growth in Asia
Looking at the more established wealth management hubs such as Switzerland, "we project that it will grow to around 30% of (Asia) private banking AUM. With our business model, value proposition, and highly experienced team, we expect to capture market share very quickly, break even in the first year of operations and be a net contributor to Barclays’ private banking business in Asia."
Based in Singapore, Lizin will build the business and manage a team of bankers. He is also head of Japan, as well as head of key clients, Asia Pacific, at Barclays. He has been with Barclays since 2007, when he joined the wealth and investment division as Chief Operating Officer Asia Pacific.
In addition, Barclays has hired Annabelle Chow as Director, team head, as well as Josephine Koh, as director. Both join from Credit Suisse in Singapore.
In a statement, Barclays said it would provide IAMs with access to a full range of investment solutions, covering research, investment products, direct trading and market access, credit, wealth advisory and investment banking.
IAMs will also get access to Barclays online capabilities in offering end-clients account aggregation, performance reporting and statements, with real-time access to bank accounts, balances and transactions.
