Pampered Banking
Managing wealth the HSBC way By Michael B. Mundo
There's a lot of competition from the big local banks and some of the foreign banks in terms of priority banking services,” says HSBC Philippines senior vice president Patrick Cheng. That’s why HSBC is aggressively pushing its wealth management service called HSBC Premier, launched worldwide in 2003.
HSBC has a unique edge over other financial institutions that offer wealth management services. Cheng explains, “We're both local in the environment we deal in, but we're also worldwide.” HSBC has a footprint in all markets—in Asia, the U.S., Europe, South America, the Middle East, and even Africa. This global presence allows the bank to offer its clients an international component to its banking services. Moreover, Cheng points out that the group is very well balanced. HSBC is neither too big nor too heavily concentrated in one region.
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| HSBC wealth management head Patrick Cheng (above left) assures that the bank representatives assigned to serve their Premier clients are highly trained and knowledgeable about the financial services being offered |
PREMIER SERVICES
Cheng explains that the majority of local HSBC Premier clients are Filipino entrepreneurs, business owners, and executives. Premier clients should have a minimum total relationship balance in deposits or investments equivalent to P3 million, whether in pesos or in foreign currency (and HSBC deals in 11 currencies). This would place them among the ranks of the “mass affluent” or “high-net-worth individuals.” Cheng says, “We go to them and seek them out, but some of them also come to us.”
According to Cheng, they exert extra effort to get to know their customers well. “We cannot presuppose to understand our clients’ needs without knowing the clients first,” he points out. He compares their work to a doctor who needs to know the patient well by asking a lot of questions before making a prescription.
HSBC serves its Premier customers based on their individual profile and risk appetite. Generally, they are encouraged to diversify their financial portfolio. Cheng recalls, “A number of clients used to concentrate on just keeping their money in deposit accounts. Now, more clients are diversifying their financial portfolio and looking at other things, like investments.”
HSBC has an array of deposit and investment products to offer its Premier customers. Recently, the bank started offering structured deposits. A lot of clients also invest in securities and funds. The risks and rewards of investing in the different instruments are explained to them. Cheng shares that although some clients are a little more “adventurous” in their investment choices, the Philippine market is heavily weighted towards fixed-income instruments and securities.
HSBC Premier customers are served in exclusive premises called Premier Centers. Cheng, who is head of wealth management at HSBC, assures that the bank representatives assigned to serve their Premier clients are highly trained and knowledgeable about the products and services being offered in the market. The bank invests a lot of time and resources in training and familiarizing them with the latest trends in wealth management. HSBC also gets the best practices abroad and continuously upgrades its systems and technology to better serve customers.
Beyond their clients’ financial wellbeing, HSBC also sponsors for their customers entertainment events and talks by experts on subjects ranging from wealth management to art, wellness, and other lifestyle topics. In November 2005, HSBC sent four clients to Shanghai for a chance to watch Tiger Woods at the HSBC Champions Tournament.
RAISING THE BAR
HSBC believes that the market for wealth management remains underserved, so the bank is putting up more centers. To date, there are 11 lounges serving their Premier clients. Cheng says the bank cannot afford to sit back because the market is becoming increasingly more sophisticated. They are constantly working to ensure that their products are in tune with market demands. In so doing, they have certainly raised the bar for financial services in the country today.
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