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Stephen Diggle, Vulpes Investment Management

Asia’s HNW individuals favouring family offices rather than private banks

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Asia’s wealthiest investors are turning to family offices to manage their wealth rather than entrusting their assets to private banks reported Bloomberg this week.

According to a Merrill Lynch global wealth management report Asia’s HNW individual population grew 9.7 per cent last year to 3.3million. CLSA expects the Chinese will make up 60 per cent of the increase in HNWIs over the next five years. Speaking to Bloomberg, Singapore-based Stephen Diggle, who set up a family office – Vulpes Investment Management – after closing Artradis, said: “It was fairly demonstrably clear that there was a very significant problem of alignment of interests by private banks and their customers, adding that “they ceased to be custodians of people’s money and they became salesmen.” Clinton Ang, the managing director of Singaporean wine and spirits distributor, Hock Tong Bee Pte, clearly agrees with Diggle. He said that private banks “try to sell you everything and not necessarily what’s best for your family office or for yourself”.

Like Diggle, he favours the family office approach to wealth management. Something that even the hedge fund industry’s most famous manager, George Soros, decided to revert to recently. Defending the value of private banks, Tan Su Shan, DBS Group’s head of wealth management said it was easy for clients to point the finger at bankers when things go wrong. “What about when things go up? There are always two sides to the story.” Tan said that DBS had attracted more than USD1.6billion in net new money in August. Most Asian family offices tend to hire “generalists” to manage their wealth as opposed to specialists like former hedge fund managers which tend to be more expensive. Having close links with the appointed manager is essential to the success of a family office.

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