Here’s a sign of the times: Asia is getting rich so fast that private banks cannot add staff quickly enough to keep up.
The region’s financial wealth has more than tripled since 2001 and Asia’s rich are increasingly looking to professional advisers for help, stretching banks’ ability to hire qualified staff. The problem is so great that Credit Suisse has just opened its first private banking school in Asia — the Credit Suisse Wealth Institute — which it describes as a “regional training and competency hub”.
“The aim is to gain a sustainable competitive advantage by attracting the right talent early,” Francesco de Ferrari, Credit Suisse’s head of private banking for Asia Pacific, said. “[In Asia], the intense demand for high-calibre relationship managers far outstrips the limited talent pool available in this relatively nascent industry.”
The bank says it will run more than 250 programmes at the centre in 2014, with a focus on classes that “strengthen the competencies of frontline employees, particularly in the areas of client services and leadership development.”
All of the bank’s client-facing staff globally must take an in-house training scheme, which more than 800 staff in Asia have already taken. A lot of this training to date has been done through web-based interaction but the new centre will allow for more classroom-based training.
“We can only succeed if we continuously upgrade and develop our talent, particularly against an evolving industry landscape and increasing focus on client-facing employees’ competency and skills,” said Helman Sitohang, head of the investment bank in Asia Pacific at Credit Suisse.
Training wealth advisers properly has become an important issue for bank executives after repeated mis-selling scandals at financial institutions worldwide. Ironically, most of the problems have been discovered in developed markets.
However, the growth in Asian wealth far outstrips the damage done by such scandals. According to HSBC, China’s total financial wealth (including government holdings) will surpass Japan this year and could grow by a further $25 trillion in the next four years -- broadly equivalent to the entire value of the US housing market at its peak in the mid-2000s.
The good news for Asia's private bankers is that this growth could get even faster in India, Indonesia, South Korea, Malaysia, Thailand, the Philippines and Vietnam (see chart, and note HSBC’s warning to ignore figures for Hong Kong and Singapore, which are distorted by financial flows).
The main challenge now is to find the staff to service this growth — people who are poor enough to have to work for a living but rich enough to afford an education that can land you a job at an international bank.