UOB has expanded its emerging affluent business by S$260m
($205m) in assets under management (AUM) and attracted 25,000
customers in the first three months since its launch in November
2011.
Through its new frontline tool UOB Wealth Insights, which
provides customised market information based on Thomson Reuters
data, the bank wants to introduce new asset classes to its
customers.
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“The current asset allocation of the rising rich is mainly
centred on deposits and unit trusts. We want to open their horizon
by giving them new ideas about investing in other asset
classes.
“At our UOB wealth centres customers are given access to
alternative investment products that in the past would have been
reserved solely for the ultra high net worth segment.
‘UOB Wealth Insights is a valuable tool to introduce such new
asset classes to our customers”, says James Phoen, head of sales
and distribution in UOB said in a media briefing.
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By GlobalDataUOB Wealth Insights displays market information on unit trusts,
forex, equities, stock indices and breaking news on big screens in
the UOB new wealth branches drawing data from the Thomson Reuters
platform.
It gives customers access to real-time financial information,
which usually only professional traders have.
“We are the first bank to customise a financial information
system to provide a snapshot of all asset classes in one view to
the customer”, says Freddy Lee, head of wealth banking in UOB.
He adds: “This platform provides information on UOB products,
like mutual funds, as well as comprehensive market information on
FX, equities, stock indices, etc.
It can be customised to fit our specific needs. For example many
customers are interested in “what our best selling products are”
and “what other customers are buying” to get a feel for the
market.
Together with the relationship manager they can monitor what is
happening in the markets and explore product ratings, historical
performance and much more.”
At the branch customers can enjoy a coffee while watching the
big video screens displaying UOB Wealth Insights.
If they are interested to learn more, a team of relationship
managers is available to guide and educate them on new products and
market developments.
Inexperienced investors
As most customers in this segment are relatively inexperienced
investors, wealth banking is more of a starter proposition.
For this reason UOB does not offer more sophisticated products
such as leveraged products.
“The tool is used in 99% of the client discussions to educate
customers and provide ideas on investments.
“This segment does not want to be hard sold, they want to get
ideas, think them over and then invest or not, but stay in
control”, says Dylan Ng, head of business strategy wealth banking
in UOB.
UOB defines the emerging affluent segment as customers with
investable assets between S$100,000 and S$350,000.
Growth potential
The bank values the market potential of 250,000 customers and
expects it to grow. UOB and Citi are the first banks to target this
yet underserved segment. With quite some success given UOB is
already serving 10% of the market.
While the cost to serve this segment are high, UOB says it
already achieves positive cost-to-income ratios despite the short
time since the launch.
The bank also sees the emerging affluent segment as an important
step in the lifecycle of the customers.
Many of the rising rich are young achievers who are likely to
grow their wealth further throughout their career.
Wealth Banking therefore offers the opportunity for the bank to
upgrade them to higher segments at a later stage in their life.
