The 2011 guide toJu

ly 2

011

Published in conjunction with:Bank of SingaporeBDO Private Bank Credit SuisseDBSHana BankHang Seng Private BankHSBCMaybank

Private Banking and Wealth Management in Asia

Asia – the new frontier for private banking ivBy Helen Avery

Building wealth management on solid foundations viMaybank

Putting private banking at the core viiCredit Suisse

Women philanthropists: a growing breed xiicontributing to families and communitiesHSBC

Cross-border private banking services from Hana xviHana Bank

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This guide is for the use of professionals only. It states the position of the market as at the time of going to press and is not a substitute for detailed local knowledge.

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Editor: Sarah MinnsDirector of research guides: Mike Carrodus Printed in the United Kingdom by: St Ives, Roche, UK

© Euromoney Trading PLC London 2011Euromoney is registered as a trademark in the United States and the United Kingdom.

Contents

advertising featureiv

Asia – the new frontier for private bankingBoth domestic and international players are expanding their private banking operations in Asia to cater for demand from the region’s growing numbers of wealthy individuals. Building a presence is likely to be costly and challenging for the global players, but the rewards are there

Asia now boasts a larger high-net-worth population than Europe, and

is the second largest region in the world by number of high-net-worth

individuals (HNWIs). No longer a story of purely emerging wealth, Asia

now has its global share of established HNWIs. According to the 2011

Capgemini Merrill Lynch World Wealth Report, released in June, there

are now 3.3 million HNWIs in the Asia-Pacific region. Japan and China

respectively host the largest number of millionaires in the world outside

the United States.

The total pool of assets among HNWIs in Asia including Japan amounts

to some $38.5 trillion, according to research from the Boston Consulting

Group.

The region’s wealthy have become the focus for global private banks,

and for Asia’s domestic retail banks – both of which are aggressively

expanding. For now, the growth rate of wealth in the entire region is

enough for international and local players to share. High-net-worth

assets under management grew 17% in Asia (ex Japan) in 2010, and are

expected to grow at an annual compound rate of 11.4% through 2015.

And in India and China, this wealth will grow over the next five years at a

compound annual rate of 18% and 14% respectively. While this growth

of wealth across Asia is slower than from 2005 to 2010, it is significantly

higher than in any other region. North America is expected to see a

growth rate of 5%, Europe 4.2%, and Latin America 9.3%.

Challenging in the short term Demand for private banking services therefore clearly exists, but it will

be a challenging region in the short term for both local players and

global players.

While wealth in the region is maturing, it is the super-affluent tier that

is booming and that is the domain of domestic players that are well-

positioned with retail banking franchises. In Euromoney’s 2011 private

banking and wealth management survey, domestic players dominated

the top three ranking positions for best private banks in China, India,

Japan, South Korea and Australia – yet nearly all of these winners have

little presence beyond their domestic shores in the rankings.

Global private banks fare better in pan-Asia rankings, largely because

they serve clients across several countries on an offshore basis. Six of

the top 10 ranked pan-Asia private banks in Euromoney’s 2011 poll were

global names.

But going onshore has to be part of a long-term growth strategy for the

global players. It means they will have to go head to head with long-

standing domestic banks and adjust their product offerings.

Onshore versus offshoreHNWIs in Asia have tended to use offshore banking as a means either

to protect their assets from political risk (in the case of Taiwanese and

Indonesian wealth) or to access investment products that are unavail-

able via an onshore bank. But offshore wealth accounts for only 7.4% of

total wealth assets in the region. Given that 92.6% of the wealth remains

onshore and is being created onshore, international banks must move

away from their traditional offshore business models if they want to

succeed in Asia. Local players, however, are better positioned in onshore

markets due to their extensive branch networks and brand recognition.

Going onshore also means that the global private banks will have to

address a different client segment. The wealthy individuals that do not

bank offshore tend to be lower down the wealth spectrum – a segment

in Asia that international players have yet really to serve. International

banks will therefore have to adjust their product offerings, advisory

processes and the ratio of relationship managers to clients to cater to

this lower tier of wealth, says the Boston Consulting Group.

It also means dealing with complex regulatory issues, grappling with

cultural differences and ultimately opening up in multiple locations

and using multiple distribution channels. A move onshore is therefore

likely to be at a hefty start-up cost. Investment products used by the

super-affluent sector also tend to be lower-margin products than those

used by experienced investors, and international private banks will have

to find a way to make sure their onshore move is a profitable one. “Banks

should be investing early to build a brand and network,” says Tjun Tang,

a Hong Kong-based partner with the Boston Consulting Group.

0

10

20

30

40

50

North America

EuropeAsia Pacific

(ex Japan)

JapanMiddle East and Africa

Latin America

$ tr

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2010

2015 estimate

High net worth assets under management by region

Source: Boston Consulting Group Global Wealth Report 2011

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Initially this will be challenging. Return on assets in Asia for private banks

was lower than in any other region in 2010, according to the Boston

Consulting Group. The future payback from onshore expansion is likely

to be substantial, however, says Tang. Potential regulatory and market

developments in Asian countries will ultimately lead to higher-margin

and broader product ranges, he points out. As global private banks

struggle to meet profit levels seen pre-financial crisis in Europe and

North America, the growth in assets under management alone in Asia

will also bolster revenues. Indeed, the growth rate in China is too impor-

tant to ignore. “There is about $12.5 trillion in high-net-worth assets in

China today and by 2015 we would expect that to have doubled,” says

Tang.

While private banks, both domestic and international, are aware of the

revenue opportunities available to them through expansion onshore,

finding talent to meet that expansion is no small feat. Interviews with

chief executive officers of the largest global private banks conducted by

Euromoney earlier this year revealed considerable hiring plans in Asia.

UBS, for example, is aspiring to grow more than twice as fast as the

market in Asia, adding in excess of 110 private bankers this year in the

region. Citi and Coutts are hiring a similar number in the region over a

longer timeframe.

But there are simply not enough experienced relationship managers to

meet the increased demand. Productivity of relationship managers is

a key metric in private banking profitability, and new and/or inexperi-

enced hires can sharply reduce productivity ratios as they grapple with

regulation and cultural changes. Some heads of business say it means

expansion plans, however lofty, have to be tempered. One chief execu-

tive with a global private bank suggests that hiring has to be gradual,

and other senior managers say they are looking to redistribute bankers

from lower-growth regions to Asia to bridge the talent gap.

Meeting new product demandWhen it comes to profitability, products are at the forefront of a private

banking strategy in Asia. Globally there is still the struggle to price pure

advice properly, and in Asia that challenge is more difficult still from a

cultural perspective.

Traditionally wealthy Asian clients have tended to be more oriented to

trading-type products, where they have a hands-on approach. Struc-

tured products, which are high margin, have also been popular. Since

the financial crisis, however, wealthy clients have shifted to more vanilla

investment products, putting pressure on private banking profits. While

in 2010 there was a decrease in the amount of assets being held in cash,

there is a sense in Asia that private banks have yet to find products that

are suited to investor appetite.

Renminbi-denominated investments would be one such offering. Ac-

cording to Boston Consulting Group, in 2010, offshore renminbi deposits

in Hong Kong increased to RMB315bln, up from RMB64bln in 2009. Yet

offshore renminbi bonds amounted to only about RMB80bln in Hong

Kong. The Hong Kong stock exchange is also now actively promoting

the launch of renminbi-denominated equities and other investment

products.

Real estate is also an asset class often overlooked by international pri-

vate banks. According to the Capgemini Merrill Lynch 2011 World Wealth

Report, real estate investments of HNWIs in Asia-Pacific, excluding Japan,

accounted for 31% of their aggregate portfolio at the end of 2010 – up

from 28% a year earlier and far above the 19% global average.

Where Asia investments may be moving closer to those provided by

private banks in Europe and North America, however, is in discretionary

mandates. While the first generation and emerging HNWIs in Asia may

continue to want a hands-on approach, the second and third generation

wealthy in the region have been warming to having their money man-

aged on a discretionary basis.

Maturing marketIt is a change in how to approach wealth management in Asia. As Asia’s

wealth boom matures, there is a growing number of experienced inves-

tors that needs to be served. The number of households with more than

$5 million in assets is growing at the fastest rate in Asia. Indeed, Hong

Kong has one of the highest concentrations of ultra-high-net-worth

individuals in the world. As this market matures, there is also an increas-

ing demand for inheritance advice and succession planning. While

international private banks may find the emerging and lower segment

of wealth to be a challenge in Asia, for the highest wealth levels, the

global banks should be able to leverage their expertise and experience,

particularly in discretionary management, offering some differentiation

from local players.

Competition will only increase. The future of private banking profits

globally looks set to be driven by Asia’s wealthy, and every bank wants to

play a role. At present there is room for everyone, but the winners will be

those that can meet the evolving demands of this growing market.

“Going onshore has to be part of a long-term growth strategy for the global players. It means they will have to go head to head with longstanding domestic banks and adjust their product offerings”

advertising featurevi

Maybank : building wealth management on solid foundationsA diversified portfolio that balances risk and return is at the core of the wealth management process, as Maybank Wealth Management explains

What do you think high-net-worth individuals (HNWIs) in this region need, in terms of advice and product range?At the heart for every investor who aims to build and preserve wealth

is the need to stay diversified and develop a well-balanced portfolio to

ensure that their ultimate financial goals are realized. In this respect, the

HNWI is no different. Portfolio diversification is key and HNWIs stand

to gain significantly from the advice of experts in this area and from a

comprehensive range of products. These cover asset allocations such

as equities, cash and deposits or currencies, fixed income, real estate

and alternatives according to their specific investment and financial

goals. As HNWIs are also far more exposed to the financial world, their

demands are generally more sophisticated. Hence, products that offer

opportunities to participate in regional or international markets to

capitalize on strengths and opportunities in other economies are usu-

ally well received.

To a certain extent, HNWIs also demand personalized service. These can

range from customization of products to suit their lifestyle needs to

premier events that range from sports to business type events. We also

need to cater to the entrepreneurial requirements of our HNWIs, and

this is usually done by tapping group-wide expertise.

Has that changed because of the financial crisis – and does the client base in Asia tend to have different needs to that elsewhere in the world?The financial crisis certainly has triggered some change, particularly

with regard to the reception and sentiment towards certain underlying

investments related to the recent crisis. The main impact is that it has

intensified and brought to the fore the importance of maintaining a

well-balanced and diversified portfolio. There is a greater emphasis on

capital protection as well, and ultimately on ensuring that a portfolio

is well matched against the risk appetite and profile of the individual

investor. There is also increased focus on measures such as hedging

and other financial instruments employed to limit over-exposure to any

particular asset class.

Whilst the client base’s needs in Asia are largely similar to those else-

where in the world, with lessons learned from the crisis, Asian HNWIs

are demanding greater transparency on product pricing and underly-

ing investments. There is also greater interest in learning and knowing

what they are buying; therefore there is a need for greater disclosure of

information in terms of product features, risks and expected return. We

recognize that the thing that drives core investor disappointment in a

market downturn is when risks are not fully explained. At the end of the

day, done correctly and with these safeguards in place, client segmenta-

tion leads to better products, services and advice for this segment of

clients.

How have you developed your service offering, and your product range, to reflect these changes and requirements?In keeping up with the more complex demands of this increasingly

sophisticated segment, Maybank has worked with its counterparts

and other providers to develop various wealth management solutions,

including fund management arrangements. Our initiatives include

offering an overseas mortgage plan for investors looking to invest in

property in the UK and offering our investors the opportunity to invest

directly in gold and other currencies as a hedge against inflation amid

market uncertainties. Where unit trusts are concerned, we have ventured

into funds that are diversified by geographical regions, sectors and com-

modities. All these efforts are aimed at catering to the needs of investors

who are not limited to any particular markets and wish to capitalize on

any possible upside in the emerging market economies. Ultimately, deci-

sions on asset allocation and investment execution are primarily based

on our clients’ risk and reward tolerance and expectations.

How do you work with third-party providers? Is it best to take an open architecture approach or to build your own products?In today’s competitive and fluid investment environment, open

architecture is the preferred approach. To a large extent, it removes

the conflict of interest that may arise otherwise, allowing us, as private

bankers, to sit on the same side of the table with our clients. This ena-

bles objectivity to play its role. Independent financial advice can then

be provided in the selection and monitoring of investment opportuni-

ties, with allegiance purely to quality and not to any particular brand or

relationship. Most important of all, it provides our client with access to

top-performing investment managers and further, due to economies of

scale in terms of our clients’ collective assets and our relationship with

investment managers, we are able to negotiate attractive fee arrange-

ments and timely advice for our valued clients.

At Maybank, we adopt a hybrid approach, encompassing both internal

expertise and the best of breed from the industry. We are confident that

bringing in a blend of products and services that are being offered in

advertising feature vii

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the market will be beneficial to both the bank and, most importantly,

our clients.

Do clients have increasingly international needs? How do you develop your footprint to help?The HNW client base is typically well educated and increasingly more

exposed to regional and even global financial markets. With the advent

of technology and an increasingly seamless financial network in many

countries, the international market is becoming more accessible to

investors than it was previously. Appreciating in particular the needs

of this segment and understanding the global market place that we

participate in, Maybank provides wealth management opportunities

that allow those keen on investing in overseas markets to participate in

accordance with their investment goals and risk appetites.

Maybank’s recent acquisition of Kim Eng Securities Singapore also

marked another milestone in strengthening our footprint in the region.

As we aspire to be a regional financial services leader, this strategic de-

cision will enable Maybank to tap its regional reach, which will further

strengthen Maybank’s investment banking and stockbroking presence

in the region.

On the same note, ultra HNWI banking with us will also get instant

recognition in 13 other countries where Maybank has a presence.

Universal recognition of our UHNWI where Maybank has a presence will

enable seamless cross-border banking activities to be executed for our

discerning clients.

How do you advise clients on risk management? Most sophisticated investors know that all investments carry with them

some level of risk. Whilst it may have been a secondary concern in the

past, today effective risk management is more important than ever.

Our role as a private banker is to remind clients that risk and investing

are two sides of the same coin and that they cannot avoid risk if they

want the potential rewards of investing. The issue isn’t one of totally

avoiding risk but really one of recognizing the various types of risk and

controlling their impact on your overall portfolio. Understanding the re-

lationship between risk and reward is a key piece in building a personal

investment philosophy and begins with an investor knowing his toler-

ance for risk. Investors are advised to weigh the potential reward

against the risk before venturing into any investment opportunity.

It is important to remember also that a client’s risk appetite isn’t

static throughout his life and that, as his circumstances and needs

change, so does his risk tolerance. There is also a continuous need

to regularly review and rebalance a client’s portfolio.

Essentially, therefore, our role is about taking a journey with the

client and constantly engaging in discussions on a risk-based

approach to asset allocation in the building of well-balanced

portfolio to suit the individual investor’s investment portfolio and

risk appetite.

In many parts of Asia, a generational shift is

taking place, as the generation that built wealth for the first time prepares to pass it on. What challenges does this create?Having accumulated wealth, the focus for investors in the later stages of

wealth management then shifts to preserving the wealth and passing it

on to family members or other beneficiaries. The core objective remains

to grow, protect and transfer their wealth. There are many important

considerations to be taken into account in the areas of setting up

and administrating a trust account based on the aspirations of the

respective clients, particularly when family and personal circumstances

change. Further, the selection and appointment of an administrator

who will execute the will effectively can sometimes be a challenge for

many investors. An experienced and professional administrator will

help minimize stress for the bereaved. Experts can also provide advice

on instruments and other financial tools that can be employed in man-

agement and transfer of wealth so as to minimize tax implications.

As a generational handover of businesses and investment responsibili-

ties takes place, many clients also want to make sure that their children

understand how to manage and preserve the various assets.

What advice do you have for your clients on estate planning?Estate planning is essential to make the most of clients’ wealth accord-

ing to their wishes. With proper estate planning, the necessary arrange-

ments for the management of their estate and the distribution of assets

when they are no longer around will be faster and will minimize legal

and administrative costs. Careful planning is necessary and it is im-

portant to review the will from time to time to ensure that the clauses

pertaining to the assets are still effective and in line with their wishes.

At times, it may be worth considering the services of professional estate

planners, who may be able to raise thought-provoking questions or

issues which do not always come to mind but which may nevertheless

need to be considered and addressed.

Via Mayban Trustees, clients are able to receive estate planning advice,

both from the conventional or Islamic perspective. For private banking

clients, will writing can be done through any of our dedicated relation-

ship bankers situated in more than 25 private banking touchpoints in

Malaysia.

For further information, please contact

HNW & Affluent BankingCommunity Financial ServicesMaybankE-mail : wealth@maybank.com.my

advertising featureviii

Credit Suisse: putting private banking at the coreAmong the world’s wealth management firms, Credit Suisse’s private bank has an unparalleled competitive position with regard to net new asset generation, profitability and client satisfaction

Credit Suisse, one of the largest private banks in the world, is also one of

the very few integrated banks globally where private banking is a core

business, alongside investment banking and asset management.

At the end of 2010, Credit Suisse Private Banking had assets under man-

agement of CHF933bln, with a global network comprising more than 380

locations in 47 countries. More than 4,000 relationship managers (RMs)

serve more than 2 million ultra-high-net-worth (UHNW) and high-net-

worth (HNW) individuals around the globe, as well as private clients in

Switzerland. Across Asia Pacific, Credit Suisse Private Banking has 360

RMs and manages CHF78.5bln of assets for its clients. Singapore and

Hong Kong are Credit Suisse’s main regional private banking hubs.

Globally, Credit Suisse has been leading the industry in terms of continu-

ous net new asset inflows in its wealth management business. Since 2008,

it has received total inflows of CHF125bln worldwide, including CHF32bln

from Asian clients, achieving significant market share gains and reflecting

strong contributions from UHNW and emerging market clients.

Credit Suisse’s strong net new asset inflows and success in attracting

client assets underscore its strong value proposition and the trust that

clients place in the bank. Among the world’s wealth management firms,

Credit Suisse’s private bank has an unparalleled competitive position with

regard to net new asset generation, profitability and client satisfaction.

While the environment and the way the private banking business have

changed fundamentally over the past three years, Credit Suisse has

responded swiftly and responsibly to these changes with the implemen-

tation of a client-focused, capital-efficient strategy and a business model

that enables it to generate less volatile earnings. Credit Suisse now has

one of the strongest balance sheets and capitalization in the industry,

which puts it in a strong position for 2011 and for years to come.

Integrated and holistic approach to advisoryCredit Suisse’s ‘integrated bank’ strategy is core to its business. The bank

has a strong integrated platform and a well-structured cross-divisional

collaboration model between private banking, investment banking and

asset management that enables it to offer comprehensive financial prod-

ucts, solutions and wealth management services seamlessly to private

banking clients.

Largely due to the benefits of Credit Suisse’s integrated bank, it has

continued to operate successfully on behalf of its clients, even in the most

challenging market conditions. Its holistic advisory approach provides

comprehensive solutions tailored to individual needs based on expertise

from across the integrated bank.

UHNW clients, in particular, are the natural beneficiaries of Credit Suisse’s

integrated bank platform as their complex financial and non-financial

requirements go beyond classic private banking services. Credit Suisse is

able to help these clients successfully handle complex transitional phases

in their professional, business and personal lives.

Strengthening capabilitiesUHNW individuals are a key client segment for Credit Suisse, currently

accounting for more than 40% of its private banking asset base in

Asia. Credit Suisse is significantly strengthening its service offering for

UHNWIs, by building up a strong competency platform with dedicated

specialists who collaborate closely with all solutions providers and key

support functions to serve RMs and their UHNW clients holistically. These

competencies include philanthropy advisory, investment consulting and

solution partners, a global team of experienced professionals in private

banking, specializing in originating, structuring and executing custom-

ized and sophisticated solutions for UHNW clients, leveraging Credit

Suisse’s integrated banking capabilities.

Credit Suisse also recently launched a family office hub in Singapore to

provide advice, infrastructure and access for Asian UHNWIs, enabling

them to jump-start their family office plans in a secure and independent

environment, while at the same time providing them with networking

and education opportunities, and middle and back office support. At the

same time, Credit Suisse places strong emphasis on the quality of its re-

lationship manager talent base and continues to hire strategically senior

bankers with experience serving UHNW clients.

The prospects for the wealth management industry remain attractive in

the long term, as economic development – especially the potential for

wealth generation in emerging markets and the ongoing generational

transfer of wealth – creates opportunities for Credit Suisse.

For further information, please contact

Credit Suisse AG Credit Suisse AG Singapore Branch Hong Kong Branch1 Raffles Link Level 88, International Commerce Centre #05-02 1 Austin Road West Singapore 039393 Kowloon, Hong Kong Phone +65 6212 6000 Phone +852 2101 6000Fax +65 6212 6200 Fax +852 2101 7990 www.credit-suisse.com

CSUI11297_RF Reading_286x210_v1p.ai 1 6/14/11 5:37 PM

DBS-278-T11 Euromoney@ft.ai 1 24/6/11 10:52 AM

DBS-278-T11 Euromoney@ft.ai 1 24/6/11 10:52 AM

advertising featurexii

Women philanthropists: a growing breed contributing to families and communitiesPhilanthropy is constantly growing and evolving, which is why it is essential to understand the changing role of women, says Cynthia D’Anjou-Brown, senior adviser, philanthropy and governance, at HSBC Private Bank in Hong Kong

For many outside observers, it might not be obvious that feminization

has taken root in the philanthropic landscape over the past two decades.

One has only to look at data and research findings on rates of female

volunteerism, donations by gender, and the growth of giving circles and

women’s foundations, to understand that change is under way.

Old stereotypesThe ‘philanthropic widow’ contributing her husband’s earnings is a

thing of the past. Higher earning potential and inheritance in line with

longer life expectancy are a potent combination. The new matriarch

may control much of the family’s giving assets.

That old adage of the ‘bake sale fundraiser’ or the ‘gala queen’ grossly

underestimates the financial clout of today’s women charity leaders.

Many women are exerting their philanthropic voices by championing

specific causes and working collaboratively with other women. Informal

or formal, this trend is in fact based on the old tradition of mutual aid

societies or community giving circles, and has been a fixture of Asian

philanthropy. It is good practice to volunteer with an organization

before making a sizeable donation.

Passing on the giving habitWomen play an important role in passing on family values such as

social responsibility and respect for others. This is best illustrated by the

biblical quote “to whom much is given much is expected”. Their ‘hands-

on’ approach to community service and charitable giving is evident in

the daily lives of their children – at the schools, at places of worship and

at local charities.

Recent research commissioned by HSBC Private Bank on the role of

women in Asian enterprises highlights the interviewees’ strength

through their ability to understand and empathize, thus playing a

highly effective high-stakes role of negotiator and nurturer of family

members.

Tapping the potential of the youngIt is easy to talk about passing on deeply held family values to children

but in practice it is hard to achieve. Research from the Pearson Founda-

tion, the non-profit arm of international media company Pearson, shows

that parents often do not do as good a job as they think in raising

children to become charitable adults. One of the main reasons for this is

the frequent absence of dialogue regarding philanthropy.

Many people do not speak openly about their voluntary and charitable

work. There are good reasons for this. In all cultures, but especially in

Asia, modesty is perceived as a positive attribute and that may discour-

age people from talking about their philanthropy.

However, it is not immodest for someone to explain their philanthropy

if it enables children to learn how their actions can impact others. As

crucial as it is to explain the scale of giving, it is perhaps more important

to pass on an understanding of why philanthropy is important for that

individual.

By being more explicit about how deeply we care about giving back to

others, it is possible to make a significant contribution to nurturing the

next generation.

Family philanthropyWhile it is important to develop an interest among young members of

the family in charitable giving for its own worth – and because of the

broader benefits it delivers in terms of creating moral and confident

adults – philanthropic education also has a role to play in preventing

animosity between older and younger members of a family. Put simply,

if children are not involved in the family’s charitable efforts there is a

risk that they will resent family funding going to charity – they may

view philanthropy as a means of disinheriting them.

Cynthia D’Anjou-Brown, senior adviser, philanthropy and governance

advertising feature xiii

The key to involving the next philanthropic generation is to reflect their

philanthropic interests in the family’s giving. For example, many young

people have a greater amount of empathy for environmental and

animal welfare causes that their parents may not appreciate. Also the

younger generation may be more interested in funding programmes

rather than capital projects.

Similarly, it is also essential to gauge the talents and strengths of

younger family members so that effective use can be made of their

skills. As a result of doing this effectively, you have the added benefit of

making the individual feel more valued, something that is not always

easy to achieve within a multi-generational family.

HSBC Private Bank’s experience is that many next generation philan-

thropists enjoy the challenge of solving social and environmental

problems using their business acumen, leverage and entrepreneurial

aptitude. They also want to be more personally involved in projects

through voluntary service.

Harmonious familiesHSBC Private Bank is committed to the preservation and growth of

harmonious families. There are a number of ways in which a family can

work towards this goal. One of the best ways is through involving all

family members in the family’s philanthropy and to that end, the bank

has developed a wide range of strategies and tools to support an inter-

est in giving and in developing the skills to ensure that philanthropy is

effective.

One of the most popular programmes is HSBC Private Bank’s Legacy

Program. With a format that encompasses seminars, lectures, experi-

ential learning and peer dialogue, the program strives to help young

family members to learn about the many challenges faced by them as

members of a business family. Our commissioned research on the role

of women in Asian family enterprises is a precursor to new programmes

to be rolled out in the years ahead. The bank also offers a number of

programmes around the world on governance and succession planning

issues, some of which can be bespoke depending on the needs of the

family.

HSBC Private Bank is open-minded and constantly looking for new ways

to help families achieve their philanthropic goals. Whether through

research, practical assistance or guidance, families can be confident

that HSBC Private Bank has their interests at heart in working to help

the entire family achieve continuity and ensure a smooth succession.

We believe that philanthropy is a truly unifying and ageless activity

and has an inclusive role to play in supporting families and creating a

harmonious life.

For further information, please contact

Cynthia D’Anjou-Brown Senior Adviser, Philanthropy and Governance HSBC Private Bank Level 13 HSBC Main Building 1 Queen’s Road Central, Hong Kong Tel: 852-2533-6211 Email: cynthia.l.danjou-brown@hsbcpb.com

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Effective philanthropy There is much more to philanthropy than just giving. Alongside the

good intentions, it is important to have a sound grasp of the practi-

cal challenges involved in effective donation.

There are several clear challenges involved in philanthropy. One

is that, frequently, there is not just one person doing the giving,

instead, a whole family may be involved. If that is the case, then a

starting point must be in achieving consensus among family mem-

bers about what the focus and process of giving will be. Most of us

are well aware that getting families to agree on anything is rarely

straightforward.

There is no shortage of potential recipients of charitable donations.

And that creates a challenge of its own: learning to differentiate be-

tween the many worthy charities. Many may have the same overall

focus, but quite different methods of how they are addressed. It is

important to understand exactly how a charity works to be satisfied

that it represents the best possible way for givers to achieve the

outcomes they want.

Related to that, families are likely to want to know exactly what dif-

ference their giving is making. Giving the money away is only part

of the process; measuring what becomes of it is quite another. One

of the major developments in philanthropy in recent years has been

an improvement in the sophistication of tracking techniques, so as

to work out exactly what the impact of a donation has been – and

how sustainable it will be.

One way of meeting challenges like these is to ensure that there

is a very clear focus for giving, and to put that down in writing. A

charitable mission statement gives guidance to philanthropy, and is

something that all family members, and their advisers, can refer to in

making decisions on new giving programmes.

Another is to be systematic. Organizing philanthropic activities with

clear operating and donation policies is good governance, just as in

any other business; it makes for efficient, focused giving.

On the challenge of the sheer range of charities, it is important to

devise a process for screening requests, and to be consistent. A clear

set of criteria will help with this.

And, while achieving consensus among family members is obvi-

ously a challenge, it is also a great opportunity. Philanthropy can

offer a unique opportunity for business families by acting as a

meeting point for all generations. It can create a role and a voice

for family members who are not involved in the family business.

As importantly, it provides a chance to stimulate the interest of

younger members of a family to take responsibility and learn about

the importance of stewardship of resources. Philanthropy also helps

to establish the boundaries around the intersection of family life,

community life and business.

DBOSA1106145_Advertorial_EuroM_9243_r1.ai 1 6/27/11 12:53 PM

DBOSA1106145_EuroMoney_9240.ai 1 6/24/11 1:58 PM

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Cross-border private banking services from HanaThe continued trend for expansion in the wealth-management sector has led Hana Bank to expand its global reach. It remains well placed to continue delivering an excellent level of service to a large client base overseas, who benefit from its cross-border asset-management service, ranging from a dedicated private banker in their home country to the bank’s support and experience worldwide

While it grew its total assets under management to 168 trillion won

($153 billion) in March 2011, Hana Private Bank draws on the strength

of the Hana Financial Group, providing a comprehensive range of fi-

nancial services to our private banking customers. Winning Euromon-

ey’s Best Private Bank in Korea award for an unprecedented seventh

consecutive year, Hana Bank never stops underlining the strength of

its reputation in the private banking business.

Hana Bank’s ultimate goal is to provide customers with the fastest

and most convenient support in the industry while the bank tries to

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Recently, Hana Bank increased its total number of private banking

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Reliable overseas partnerThe bank understands that each customer’s situation, environment

and issues are unique and therefore we provide tailored solutions to

address their specific needs. Many of our existing high-net-worth cli-

ents are cross-border customers. Our definition of cross-border clients

includes those leaving Korea to live abroad (outbound planning) and

those relocating to Korea (inbound planning). In some cases, it may

also include clients who have citizenship in more than one country

(dual citizenship) or have permanent-resident status in other country.

All of these individuals face unique financial planning issues. For those

who wish to bring back their money or invest their wealth in their

home country, Hana Bank can fully help them to make investment in

Korea easily accessible through offering financial planning for these

internationally mobile clients.

Cross-border asset management In fact, Hana Bank initiated its overseas asset management services in

1994 as a means to provide cross-border financial services to Korean

expatriates living abroad, including those living in Canada, the US,

Australia and New Zealand. Hana Bank and its team of expert profes-

sionals in the fields of real estate, tax planning and investment funds

manage the Korean financial assets of these overseas customers.

Tax planning seminars Hana Bank hosts tax and trust planning seminars every two to three

years that travel around the major five countries of its client base,

including Canada, the US and New Zealand. The bank has held a total

of nine overseas seminars so far. Through these seminars, the bank’s

professional tax advisors deliver the latest information and a handful

of tips on the tax structure in the foreign country and an understand-

ing of any tax treaties that may override the tax code in either country.

With great experience and knowledge, our expertise makes clients’

tax planning easier by giving them a thorough understanding. What

is tax-advantaged in Korea may not be tax-advantaged abroad. Our

professionals compare the tax systems of each country and suggest

the tax plans best suited for each client’s individual case. Our global

branch network always come in handy when it is necessary to contact

domestic or overseas branches to find out the best financial products

for our customers to save effectively on their tax.

Real-estate servicesOur real-estate industry experts offer a wide range of services and

property investment opportunities for our overseas clients. Hana

Bank works with clients and brokers to understand their needs and

discuss solutions to help them solve their property investment issues.

Frequently discussed issues include the latest property price trends,

the housing market outlook, land-use planning and regional develop-

ment trends. Our real-estate advisors offer professional and reason-

able investment analysis reports to clients on a weekly basis.

Together with our tax advisory teams, the real-estate advisory teams

participate in the overseas seminars that travel around five countries.

While our overseas clients have a number of questions on property

development and its trends, our team offers annual reviews and

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For further information, please contact

101-1, 1Ga, Euljiro, Jung-Gu,Seoul, 100-191, KoreaTel : +82 2 2002 1740Email : hanair@hanafn.comWebsite : www.hanafn.com

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BDO: private banking with a local edge. BDO Private Bank proves that a domestic bank can deliver a private banking service that can compete with the global players

Although the private banking and wealth management industry is

still dominated by foreign banks, rising standards of living and an

explosion in per capita income in emerging economies, particularly in

Asia, will lure local banks to compete for market share with interna-

tional banks.

For the Philippines alone, BDO Private Bank Research forecasts per

capita income will jump by 300% in the next decade. This explosion

of purchasing power and wealth is expected to increase the number

of people requiring private banking and wealth management

services in the future. A recent study estimates that Filipinos account for

$15 billion-20 billion of wealth managed outside the Phil ippines.

The level of Filipino wealth is expected to expand dramatically in

the years to come.

Domestic private banking

sectors has brought in knowledge and new skills, nurturing a new

The liberalization in banking as well as in other finance-related

breed of dynamic and innovative local bankers, who are experts

in their respective fields.

Our new banking professionals are now capable of servicing clients to

achieve not only their financial objectives but also their trans-genera-

tional aspirations. Domestic banks are now better prepared to handle

the wealth management needs of fellow Filipinos.

In what ways can a domestic bank excel in providing private banking

and wealth management services to the Philippine market? First, local

expertise and constant presence assure clients regular updates and

performance of accounts in both good and challenging times. Second,

employing an open architecture framework allows local private banks

to access financial products and other services from different institu-

tions, providing best execution in managing their wealth and not just

selling financial products. This change in paradigm puts clients’ needs

first in meeting their long-term performance objectives. In addition,

the integration of varied insights and research outputs from different

institutions help clients understand and evaluate an uncharted eco-

nomic landscape and the range of possible outcomes.

Third, local private bankers can easily form a diverse team of experts

specializing in investment, tax strategies, estate planning and

philanthropy to respond quickly to the needs of clients. Fourth, local

private banks can consolidate all the offshore and onshore holdings

of affluent clients to improve overall performance and evaluate if their

objectives are being achieved.

Clients have realized that they need not just to preserve wealth, but

more importantly to ensure that its value continues to appreciate

under the prudent care and management of a trusted adviser. Assets

like properties may deteriorate over time if not properly maintained,

investments have to be reviewed with constantly changing market

conditions in mind, insurance policies, titles and other documents of

value can be kept in a secure place and access given to designated

persons if the inevitable happens. Aside from being the repository

and administrator of assets, a domestic private bank can also act as

executor and distribute clients’ assets as provided for in a will or a

letter of wishes attached to the trust arrangement.

Therefore, domestic or local banks are seen to join in providing wealth

management services to the new affluent or emerging affluent in

the future. Instead of competition, we expect local private banks to

partner with both local and foreign financial institutions in delivering

the best service and execution for their clients. Wealth management

is expected to become part of a domestic bank’s core activity in the

future.

The BDO Private Bank experienceBDO Private Bank was the first to find this fertile ground for a new

and unique business initiative. It is focused and committed in build-

ing a private banking business based on a comprehensive wealth

management platform. Though operating under a commercial bank-

ing licence, BDO Private Bank decided to focus its resources in

offering and creating customized investment products to achieve

clients’ specific goals for wealth accumulation and growth, structuring

bespoke engagements that cover financial investment and advisory,

investment management and, more importantly, providing clients

with assistance in creating their estate.

As a domestic private banking institution, BDO Private Bank has the

advantage of being in touch, on call, on demand for its clients.

The proximity to clients allows BDO Private Bank to be pro-active through

planning and advisory and, more importantly, hand-holding, guiding

and reassuring clients during periods of crisis and market volatility.

Domestically-rooted yes, but more importantly with a

global perspective. In this electronic information age, clients are

deluged with data from all forms of media and information channels.

Clients need independent and unbiased expert help to digest the

data into meaningful information that can be used to make invest-

ments and life decisions. The open architecture philosophy starts with

accurate and reliable information on the macro-economy, markets

and products to produce strategies that will seek to achieve the goals

and aspirations of a client. More importantly, the open-architecture

approach allows clients access to best-of-breed products, not only

within the local environment, but on the principle of best execution,

access to appropriate products onshore and offshore.

A core business for domestic banksThe domestic banking industry does not lack people of brilliance, skill

and talent. The exposure of Filipino banking professionals to global

financial institutions upgraded their expertise in offshore markets and

enhanced the knowledge base. This has created a pool of financial ad-

visers, investment bankers, financial risk specialists and legal and fam-

ily estate lawyers that domestic banks can use as a resource to create

the platform from which to deliver a domestic private banking service.

The experience of BDO Private Bank is proof that there is a niche for

domestic banking institutions to focus on private banking. Interna-

tional recognition proves that the bank’s model for private banking

is workable and sustainable as a business. A domestic bank can

excel and deliver private banking and wealth management services

relevant for the Filipino emerging affluent.

The opportunity and the challenge for domestic private banks is to create

a true private banking platform to serve the needs of domestic clients.