Advisers in Asia need to adapt their advice models to a more fee-for-service proposition instead of just selling clients products, according to the executive vice president of wealth solution provider SEI.
This comes after SEI signed an expansion deal with BMO Financial Group to provide investment products in Asia.
Kevin Barr, who is also head of the investment management unit and asset management distribution team at SEI, told International Adviser: “I don’t have a crystal ball but one of the things that is clear is the trend towards globalised investing and advice.
“As we start looking at the region, there is a tremendous amount of wealth creation. You are seeing the needs of investors to continue to expand and the response of advice givers needing to adapt their advisory models instead of just selling products and offering products.
“Now they need to truly go ahead and understand that these newly-created wealth holders want advice and are willing to pay for advice. Asia is quickly catching up and mirroring what we are seeing in other developed markets across the world, as far as delivering and consuming advice,” Barr said.
To enable distribution to Asian investors, SEI has registered 25 of its Dublin Ucits funds in Singapore, and BMO has unveiled a set of four risk-rated global strategic portfolios which are managed by SEI.
Differentiation
Wealth is rapidly increasingly in the region as Wealth-X’s report in December 2018 found Asia Pacific will be the wealthiest region by 2025.
This means that there will be more clients available for wealth firms, that will have to entice people to join their books.
“One of the big shifts we are starting to see is that in the past firms needed to have in-house asset management as a form of differentiation, but as time goes on, investors are looking for holistic advice and for firms to really represent their needs and not to sell them products,” Barr added.
“It becomes more important of what the in-house products are and more important how firms are able to describe their in-house model.
“This is a change that is happening not only just Asia but around the globe where firms are recognising that clients are willing to pay for advice.
“What traditionally has been about providing in-house products to differentiate is now forcing firms to think about advice for clients as a way of differentiating.”
Asian expansion
SEI’s strategic partnership with BMO Private Bank Asia builds upon an existing 21-year asset management relationship with Bank of Montreal Nesbitt Burns (BMO NB) in Canada.
The firm already works with HSBC in Asia – and Barr believes SEI is offering more diversification for investors in the region as it expands further into Asia.
Barr said: “Asian investors have previously been very concentrated. What SEI is really attracting investors in the region is that our approach to diversification and asset allocation has not replaced but complementing that approach to investing.
“Whether people have been building businesses to develop the wealth or wealth has been concentrated, what SEI is looking to providing diversification to offer exposure to not only on a geographic basis but also on an asset basis.
“We are talking to Asian investors and Asian wealth managers about it being a complementary to allow investors to hedge and protect their wealth but at the same time not giving up opportunities to watch that wealth grow.”
