ASIA AS A SECOND HOME
103rd Meridian East speaks to Dr. Thomas R. Meier, Chief Executive Officer Asia & Middle East and Member of the Executive Board, Julius Baer, the leading Swiss private banking group, about Singapore being a wealth management platform for both Asian and European clients.
Dr Meier, Julius Baer is a leading Swiss private banking group with a long heritage. What made you decide to set up an office in Singapore?
As a Swiss banking group that manages the wealth of private individuals, Julius Baer wanted to be closer to the action, to the place where new wealth is being generated: Asia. Today, Asia's economic growth of seven per cent is globally unparalleled and is in striking contrast to the struggle in which Europe currently finds itself. In terms of volume, credit and transaction, Asia is leading today, rather than Europe.
Asia's growing economy offers immense opportunities in which people wish to participate. Julius Baer, naturally, wanted to establish its presence in the Asian region, which today is notable for an ever-increasing number of high networth individuals, who require professional assistance in managing their wealth.
The Asian region is attracting a lot of attention these days due to its numerous emerging economies with enormous potential. If you want to be successful and more credible in Asia, you must have your office in Asia. This is because proximity to the client is key, since the once-popular offshore method is history.
Currently, there are two major financial hubs here: Hong Kong and Singapore. The latter has numerous advantages: it boasts a well-established banking system and credible legislation, English is the language of business here, and business is conducted with ease and professionalism. Over the years, Singapore has emulated the Swiss concept in terms of banking culture, therefore, it was natural for Julius Baer, as the leading Swiss private banking group, to establish its regional office here.
What is the major difference between Julius Baer's Asian and European clients?
It basically boils down to the concept of "old money" and "new money". In Europe, our clients are usually of retirement age, i.e. in their 70s. They have inherited their wealth rather than acquired it themselves, so they are in the wealth preservation phase. European clients tend to trust a bank with a track record and that has been with the family for generations.
In Asia, our clients here are still building their wealth. They are more entrepreneurial and risk-loving. They represent "new money" – they are in the first or second generation and are in the wealth creation or accumulation phase.
What can you say about the Russian clients of Julius Baer in Singapore?
While many Russians have been coming to Singapore increasingly for holidays and medical check-ups, wealthy Russian investors tend to regard Singapore as an alternative for relocation (a second home base) due to their wish to participate in Asia's unprecedented growth.
Most Russian wealth has been built in the last 20 years, after Russia made a turn for a free economy and open market. This is why rich Russians are in the first phase of wealth generation. Like Asians, they have a strong entrepreneurial drive and, unlike Europeans who find comfort in a bank as an institution for asset management, Russians value the personal relationship with a bank representative. They develop a strong personal connection with the person helping them increase their wealth, and we, at Julius Baer, are well aware of this phenomenon.
Julius Baer's Success Story in Singapore
Singapore is the Bank's second home market outside of Switzerland and its Julius Baer's largest operation in Asia. Julius Baer Singapore, which is the centre of competence for the Bank's Southeast Asian operations, was established in 2006. Starting with just over 30 employees, the Bank presently occupies two buildings in separate locations to accommodate its rapid growth.
It now employs more than 400 people across Asia, which comprises 10 per cent of the Bank's total employees, and plans to move to a new office location at Asia Square by the end of 2011. The new office will have the capacity to house 700 employees, which reflects the Bank's investment in and commitment to the region.