Opening Address by Mr Heng Swee Keat, Minister for Finance, at The Opening of Wealth Management Institute (WMI) at Nanyang Technological University (NTU@One-North)
07 Dec 2017Pro-chancellors, NTU
Professor Bertil Andersson, President, NTU,
Mr Lim Chow Kiat and Members of the Board of Governors, WMI,
Distinguished Guests,
Ladies and Gentlemen,
1. I am very happy to join you this morning.
2. Let me start by congratulating WMI and NTU on the opening of WMI@NTU, which marks the next phase of growth for both institutions.
3. WMI has been playing a key role in developing expertise for the industry since its inception in 2003.
a. Talent development is an integral pillar for the growth of Singapore’s wealth management industry.
b. To date, WMI has trained more than 14,500 professionals from over 108 financial institutions, both local and foreign.
4. The wealth management industry is undergoing transformation arising from changes in the global regulatory landscape, clients’ profile and demand, as well as technological innovations.
a. Against this backdrop, WMI@NTU will have to play a bigger role, to ensure that our talent is well-equipped for the future.
Creating stronger linkages for channelling investments to the real economy and social returns
5. We are familiar with the story of Asia’s impressive growth.
a. Asia is poised to remain the fastest-growing region in the world in the medium term.
b. In tandem with this growth, private wealth in Asia, ranging from the affluent to ultra-high net worth, is also expected to be the fastest-growing globally, at 10% per year from 2016 to 2021[1].
6. Singapore is well-placed to mobilise this global and regional wealth to productive uses in Asia and around the world, which will support sustainable economic development in the long term.
a. Today, Singapore is considered a leading Pan-Asian asset management centre, with S$2.74 trillion assets under management in 2016.
b. We started off building strengths in traditional markets like Asian and emerging fixed income and equities.
c. Over the last five years, we have seen global investors shift from public markets towards private markets such as private equity (PE) and venture capital (VC), which are growing by almost 20% a year.
7. In line with this, more private banking (PB) funds are being allocated to private markets, in their search for yield and portfolio diversification.
a. When PB clients invest in PE/VC, they can benefit the broader industry and real economy when these PE/VC firms invest in the growth of Asian start-ups and growth companies.
b. These companies can drive future economic growth and job creation in many Asian economies.
c. For example, clients of DBS Private Bank have participated in multiple funding rounds of TauRX Phamaceuticals, a local company in Alzheimer’s disease research.
d. The funds raised have been used to boost the company’s development and commercialisation of cures for neurodegenerative diseases, and to expand its research and development teams.
8. Apart from the traditional focus on investment objectives, we are also seeing growing interest from PB clients in investments with social impact.
a. The UBS Global Family Office Report 2017 found that family offices globally and in Singapore are increasingly focused on impact investing.
b. Almost 30% of family offices here have an exposure in impact investing, slightly higher than the global average of 28.3%[2].
c. Some of these impact investments have been directed to regions close to home, into countries such as Cambodia, Myanmar and Vietnam, supporting causes in education, agriculture and SME financing.
d. Another avenue to create positive social impact with wealth is through philanthropy.
e. Many private banks here have dedicated units for philanthropy advisory, and Credit Suisse is one of them. The bank set up the SymAsia Foundation six years ago to help its clients launch their own charitable foundations.
f. For instance, SymAsia helped beauty group Luxasia set up a foundation in 2011 to empower disadvantaged women in Asia.
g. The Luxasia Empowerment of Women Initiative offers beauty training to these women and assists with job placements. The initiative has since expanded to Taiwan following its successful pilot in Singapore.
Developing Relationship Managers with high standards of integrity, professionalism and competency
9. To achieve these social and financial returns, relationship managers (RMs) are key to bridging client monies with the appropriate investments.
10. Demands on our PB RMs are more intense and complex than before amid shifting industry trends and client needs.
a. RMs have to be competent in offering more sophisticated wealth solutions, and navigating a complex regulatory environment.
b. RMs also have to be competent in harnessing technology’s potential, to deliver their services in a faster, more interactive and customised fashion.
c. Above all, trust is at the heart of wealth management. While navigating these demands, RMs need to uphold a strong relationship of trust and integrity with their clients.
11. To ensure that our private banks are able to stay on top of their profession, we need to equip our RMs to be future-ready.
12. We need to effect three paradigm shifts:
a. One, from “product sales” to “total wealth advice” – RMs should move from merely doing product sales to providing comprehensive wealth advisory that meets clients’ personal, family and business needs.
b. Two, from “compliance” to “conduct” – RMs should move from just carrying out activities in a process-compliant way, to doing what’s right and in the best interest of clients.
c. Three, from “entry-level competencies” to “senior RM competencies” – RMs should deepen their competencies, leadership skills, and knowledge of key regional markets as they gain industry experience.
Enhancing Singapore’s PB talent pool – WMI as PB Lead Provider
13. To effect the three paradigm shifts for RMs, the Institute of Banking and Finance (IBF) has appointed WMI as PB Lead Training Provider, with MAS’ support.
a. As Lead Provider, WMI will serve as a centralised training utility to raise standards and develop future-ready talent across the PB industry.
b. To this end, WMI will be enhancing the IBF Competency Standards and training curriculum for PB RMs.
c. The enhanced curriculum will include new competencies such as digital skills, cross-banking and specialised market knowledge, and a new management track focusing on leadership and managerial skills for senior RMs.
14. WMI will also benchmark the enhanced curriculum internationally to ensure that Singapore’s talent pool remains competitive on a global level.
a. To achieve this, WMI will take strategic direction from its Private Banking International Advisory Committee, which comprises local and international veterans in the PB and Wealth Management industry.
15. With the incorporation of WMI as an autonomous institute under NTU, WMI is even better-placed to achieve the goals of PB Lead Provider.
a. WMI’s programmes can leverage NTU’s strengths in finance and technology, to address the more complex demands on our RMs.
16. We support WMI@NTU and appreciate WMI’s support towards Singapore’s development priorities in turn.
a. WMI’s work is aligned with the PB and manpower strategies under the Financial Services Industry Transformation Map, to upgrade our talent pool, and build a pipeline of Singaporeans across all levels.
17. I am confident that the institution is in a strong position to deepen Singapore’s pool of RMs of the future.
Conclusion
18. Congratulations to WMI on your appointment as PB Lead Provider, and once again, on the opening of WMI@NTU.
19. Thank you.
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[1] Global Wealth Report 2017.
[2] Global Family Office Report 2017.