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An Asian bankers’ guide to schmoozing mega rich millennials

Private bankers in Singapore and Hong Kong need to urgently adapt how they work in order to better serve high-net-worth (HNW) millennial clients. The potential upsides are huge if bankers can win more business from young millionaires across Asia. An estimated $4 trillion of HNW wealth is expected to be passed down to the next generation globally over the next decade.

But becoming a banker to millennials requires a change of mindset, especially if you’re from an older generation yourself. Here are some of the main factors to consider when you’re trying to build relationships with millennials.


Is it true that millennials lack loyalty? Are they more likely to switch banks than older generations are? Or has the landscape in private banking changed so significantly that they are simply being offered with more choice of firms to bank with? The research is mixed, but much of it actually shows that millennials can potentially be loyal and powerful advocates for relationships that are particularly meaningful to them.

Millennials tend to seek validation when they select their bankers and rely on their social networks to tell them whether or not they’re making the right choice. They also demand personalisation and transparency, and have a tendency to switch banks if a banker's delivery falls below expectations. But I don’t necessarily think this shows a lack of loyalty to their bankers.

In fact, many millennials will engage very directly with bankers, as long as bankers win their trust first. The key to doing this is to be bespoke and unique. When it comes to investments, for example, traditional asset classes such as equity and fixed income are no longer particularly attractive to younger people.

“The new generation of HNWs in Asia has very different needs when it comes to investments,” one Swiss private banker, who is currently serving a few HNWs in their late 20s and early 30s, told me recently. “While their parents are looking for good investment returns, the young HNWs are looking for unique investments – such as private-equity and socially-responsible investments – that are more aligned to their interests. So you have to find out what their wider interests actually are,” he added.

You might also want to tone down your sales spiel when you next chat to a wealthy 20-something. “They expect straight, down-to-earth talk, not a sales pitch from a banker who’s looking to score a big commission,” an Asia-based private banker told me at a recent roundtable discussion held by my company.

When it comes to giving them investment advice, millennials often want to further their knowledge of finance, rather than get a lecture about the basics. They grew up in the internet era, with easy access to financial information, so they most likely already possess a certain level of financial expertise. Their need for a deeper understanding means private bankers should use clear and consistent language, and be transparent about the benefits and risks of a particular product, and how it specifically meets their investment requirements.

As digital natives, millennial HNWs also have much higher expectations of price transparency. Although they may not be the most price-sensitive group, price transparency is a critical factor in earning their trust. All fees should be reasonable and fair, and (most importantly) made clear. If they don’t understand the price structure of a product you’re proposing, this could be a major barrier to you increasing your bank’s share of their wallet.

Team work

Even if you’re not serving many millennial clients right now, you will be soon, so don’t wait until the millennials take over their family businesses to adapt your strategy. My company’s research shows that many millennial HNWs are considering leaving their parents’ or grandparents’ private bankers. To help counter this trend, it’s essential for private banks to put in place a structured team approach, which serves not only the current (older) generation, but also engages the upcoming millennial generation within the client’s family.

These teams should not just comprise of investment advisors, but should also include younger private bankers, appointed to serve the millennials in the family. A private-banking team that understands the needs and preferences of both current clients and their heirs stands a better chance of inspiring trust and confidence in clients, naturally leading to a continuous relationship.

But whether it’s a fear of losing control of their clients or a lack of willingness to jump into an entirely new advisory model, many private bankers in Asia are still shying away from adopting this team-based approach.

Some are beginning to see the writing on the wall, however. “One key challenge I face today is that many of my bankers are nearing retirement age and there’s a risk that clients may switch to another bank when they do retire,” the market head of an Asian private bank told me. “I need to make sure there’s proper succession planning internally, to transfer the client relationships from retiring bankers to younger bankers.”

At the end of the day, we all know that there’s no one-size-fit-all solution to retain the next generation of Asian wealth. The overriding idea, however, is to have the right people in place to facilitate the communication that is relevant to millennial clients. Not many private banks are currently getting this communication right, but hopefully this article will serve as a reminder that such change is a necessary evil to ensure longstanding client relationships that span across generations.

Sean Kang is the director of the Asia Pacific wealth management practice for Scorpio Partnership and McLagan (business units of Aon). He is based in Singapore and provides advice to financial institutions in the region. Soo Khang, an intern consultant for Scorpio Partnership, also contributed to this article by providing her perspectives as a millennial.

Image credit: visualspace, Getty

AUTHORSean Kang Insider Comment

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