Private Wealth Managers: Facing Up To Operational Challenges To Enhance Private Banking Services
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Asset management is an endeavor that must be in constant progression, particularly in times of immense worldwide shifts in the financial environment, its parameters, and regulatory frameworks.

Upgrading technology, stock of information, tools of analyses and human resources complement, the main objective of which is to deflect the adverse impacts of inevitable adjustments on the wealth under the company’s management.

Sustained viability and profitability in the wake of the 2008 financial crunch, had challenges abound, undoubtedly very intricate ones. Despite the market’s resurgence from the meltdown, the financial climate remains more anxious and volatile as indicated by the enforcement of tighter regulatory frameworks and fiercer competition making positive growth a prized achievement.

Christophe Audergon of Crossinvest Asia Pte Ltd. stays assertive that the growth of the worldwide pool of assets under management over the years will always be an ascending chart. Nevertheless, wealth manager companies have to address contentious issues confronting the industry and adapt its strategic moves to thwart perils and constant global financial shocks.

Adaptive governance: An ally of effective asset management

Audergon says a private banker must always have the foresight and the mental preparedness, aligning the company’s business approaches and key plans of action to substantially resolve impending operational snags and face up to major challenges on governance, risks, regulatory requirements, operations and technology, human capital, growth and expansion as well as data base and information systems.

Governance is a basic concern where constant implementation, modification and rethinking are daily ongoing operation. New management models are designed to allow hands-on management paradigms, wherein board directors are mainstreamed into vital operations processes. Alongside this is the implementation of performance score cards and effective feedback mechanism down to the client level and vice versa.

Christophe Audergon emphasizes the identification and mitigation of investment risks. Sound risk management, innovations in risk reduction, use of risk metrics and sensitivity analyses are pursued simultaneously with serious consideration for the client’s risk appetite. These initiatives are dictated primarily not by compliance mandates but by the obligation to ensure that the products and services offered by the company do not pose hazards to its clients’ wealth, especially in periods of worldwide economic downturns. Private Bankers must uphold its commitment to add value to its customers’ resources.

Compliance with regulatory standards

Meanwhile, conformity to regulations has evolved into voluminous and more complex transactions. The US Dodd-Frank Act and the EU Alternative Investment Fund Managers Directive are the most recent encompassing compliance measures. Hence, Private Bankers must continue the enhancement of its operations framework, with emphasis on workflow analysis and management, towards greater operational efficiency and improved reporting systems as well as data management.

As novel technologies hurdle geographical constraints, regulatory requirements, client expectations, product offerings and taxation schemes turn increasingly complicated, simultaneous with broadening information and documentation needs.

Private Bankers must remain proactive in carrying out reporting obligations and apprising itself with new rules and standards, such as the requirements engendered by the US Foreign Account Tax Compliance Act (FATCA). The latter is applied globally, intended to enforce federal income tax on US-sourced investment income. Crossinvest Asia Pte Ltd. encourages transparency and accuracy in its reporting system because this strengthens business relationships founded on trust.

Strength in human capital

The challenge of maintaining quality human capital is made more pressing by the gradual emergence of a new generation of younger investors who are technically savvy and more enlightened in utilizing state-of-the-art technologies to screen investment instruments and analyze prescribed solutions. This new breed of patrons has easy access to online information regarding the best options to stake their resources.

An asset manager has the innate acumen to discern high yield placements, prognosticate, and ward off adversities as well as comply with voluminous regulatory and documentation requirements. Data abound with myriad sophisticated research sources at easy disposal. But the competence to cull valuable, accurate information from the barrage of statistics, charts and analyses is scarce but premium.

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