When Cedric Lizin left Swiss banking giant UBS to join Standard Chartered (StanChart) Private Bank to oversee its Asean and South Asia business, he did not know what to expect.
But the wealth management veteran believes he was right about one thing. ‘I felt the reputation of StanChart private bank in the financial market is not in line with what it actually is.
‘It was only after I joined the bank that I found out a lot of positive things that I didn’t know previously,’ he says, adding that he now plans to change that perception, especially among private bankers.
Based in Singapore, Lizin joined StanChart as regional head of Asean and South Asia and global head of the global South Asia community last December.
He was previously the head of the UBS Wealth Management office in Dubai since September 2017. He also served as senior executive officer of the Dubai branch, which included the investment bank and asset management division.
Prior to UBS, Lizin worked for a decade at Barclays Wealth Management, where he headed the Middle East and Africa offshore and Japan onshore wealth management businesses out of Dubai.
Earlier in his career, at Barclays as chief operating officer for Asia, Lizin led the development of the Asia wealth management platform, established risk and control frameworks, and built an onshore business in Japan from scratch.
Lizin has also worked at Credit Suisse, Fortis and McKinsey, where he met his wife.
‘When I was at McKinsey, I asked to do a one-year international transfer to Asia, and so I came to Singapore,’ he says.
‘I met my wife at McKinsey Singapore, and we subsequently moved back to Brussels. We both missed living in Singapore and decided to move back.
‘I knew it wouldn’t be easy to find a job in Singapore while based in Brussels, but I applied for roles anyway. When we came on a vacation to Singapore to visit my wife’s family, I interviewed at a few banks.
‘I got an offer at Credit Suisse, and from there I moved to Barclays, then UBS, and now I am here with StanChart.’
Standard Chartered Private Bank has three out of six booking centres in Asia: Singapore, Hong Kong and India. Its other booking centres are in Dubai, London and Jersey.
Last year, its global private banking business hired 39 bankers, 40% of which are senior executives.
The division reported $94m in pre-tax profit, and assets under management grew by 14% to $67.1bn, driven by $2.6bn in net new money.
The business’s income grew to $577m, a 12% increase from the previous year. Asia contributed about 80% of that income. In Greater China and North Asia, StanChart’s private banking income grew 27% in 2019.
Now the emerging markets-focused bank is on a mission to hire about 40 more private bankers globally this year. ‘But first, we need to change the perception of relationship managers,’ Lizin says.
‘That is one of my challenges now, because many relationship managers outside StanChart still have in mind the capabilities of StanChart from two or three years ago, which were much less advanced than today.
‘They don’t realise the transformation that took place over the last few years,’ he adds.
A new dawn
Attracting the best relationship managers is crucial for any private bank aiming to expand its client base. Although bonuses do inevitably influence where private bankers choose to work, investment capabilities of a platform and strategies in place for primary markets are also important factors.
When it comes to platforms, private bankers tend to gravitate towards private banks that have a platform that suits the needs of its clients.
According to Selby Jennings, an international recruitment company, big international names such as UBS, JP Morgan Private Bank, Citi Private Bank and Bank Julius Baer feature heavily on private bankers’ wishlists. In Singapore, Bank of Singapore and DBS Private Bank are closely tied as frontrunners.
When Lizin recently sat down with some head-hunters to discuss recruitment, he discovered that private bankers were not including StanChart in their top preferences.
‘I believe they are not aware of our FX platform, which is really competitive. It is a fully open-architecture platform, and not all banks have an open-architecture for FX. Our FX derivatives platform is also online, with real-time pricing and execution,’ he says.
A key part of StanChart’s transformation journey, which started four years ago, was to upgrade its client-centric platforms and processes. The bank invested in enhancing its open-architecture FX derivatives platform, capable of pricing eight different pay-offs.
Pricing and execution that used to take 45 minutes per trade can now be done from the banker’s desktop in 45 seconds. Instead of speaking to the client, calling different providers for pricings and then calling the client back, now everything is done on a single phone call with live prices on the banker’s screen.
‘If we look at the market today, there are still a number of competitors who are not online and do it the old way by phone. In fact, competitors who do have online pricing and execution are able to price typically only three or four pay-offs while we can do eight,’ Lizin says.
‘We also don’t have market purity. Access to multiple markets is another draw for private bankers who are in banks that have strict market purity. Moreover, some candidates were even under the impression that it is very difficult to open accounts in StanChart. But that’s not the case,’ he continues.
‘If you look at the last dozen bankers we hired, each of them, on average, opened 10 to 15 accounts in their first year. I think that is pretty good.’
Cedric is now on a hunt to recruit more senior private bankers because he believes they bring invaluable experience that is difficult to teach or learn.
‘They are typically able to build a large book relatively fast given their strong relationships with clients. And they are also familiar with regulations and controls and hence more robust from a risk management perspective,’ he says.
Diversity and inclusion is also a key priority in StanChart’s people agenda. Currently, about 68% of its global private banking employees are women. In fact, women make up a higher proportion of the private bank’s staff in Asia than in Europe, where they account for half of the headcount.
A Covid-19 world
The coronavirus pandemic will undoubtedly continue to change the way we live, work and do business for many more months to come. As Private Wealth was going to press, Singapore witnessed a significant rise in local cases, triggering stricter safe distancing measures. Elsewhere, millions were still under lockdown in Malaysia and India, while Italy announced its gradual reopening plan.
StanChart, in that regard, took a series of actions to reduce transmission risk while continuing to serve its clients. Travel restrictions, regular in-branch and office disinfection, use of symptom-recognition technology, and the provision of face masks and hand sanitizers are among some of its group-wide actions.
As many clients naturally preferred not to meet face-to-face, the team actively engaged with them through video conferencing to help reposition portfolios.
While there was no significant shift in preferred asset classes, clients had a greater interest in multiple routes to markets – derivatives and options strategies aimed at limiting downside while generating income and alternative investments that are low risk and uncorrelated to equity markets, for example.
‘In times like this, you see two types of client behaviours,’ Lizin says. ‘There are clients who are uncomfortable to make any investment decision right now. So, they take a wait-and-see approach.
‘Then there are some other clients who see this as an opportunity to start building their exposure to both equities and fixed income. Typically, they use derivatives because you can build exposure while still protecting yourself from the downside.’
In March, StanChart launched a fund of hedge funds developed by JP Morgan exclusively for the bank’s wealthy clients. A real estate-focused product was also very well-received by investors, Lizin says.
In January, the private bank introduced a new ESG review process to address greenwashing concerns among clients, who have been increasing allocation to sustainable investments.
ESG Select is tailored to each asset class to manage the negative impact of risks and spot opportunities to drive positive impact. Funds and discretionary portfolio solutions follow a similar assessment process, while structured products are separately assessed on different sets of criteria.
‘One discretionary portfolio management (DPM) strategy that has been very popular among clients is global equity because it has an outstanding performance track record versus the benchmark.
‘Since the beginning of the year, we’ve had positive inflows in DPM. Right now, it is probably not the best time to invest in equity DPM. Investors should consider products with downside protection.’
Lizin personally doesn’t believe the coronavirus pandemic will disappear in the short term.
This interview was first published in the May issue of Citywire Asia’s Private Wealth magazine.