Senior private bankers are divided over the importance of brand name when it comes to fund sales and the need to localise product marketing for Asia.
Speaking during an industry roundtable convened by AsianInvestor and sponsored by Aberdeen Asset Management*, participants agreed that performance was paramount.
But Dany Dupasquier, head of group funds for group wealth management at Standard Chartered, argued that brand recognition was also important in the high-net-worth segment, not only among clients but also relationship managers (RMs) and investment advisers (IAs).
“We are fund specialists, so our knowledge of the fund universe is wide,” says Dupasquier, who is responsible for fund selection and due diligence.
“If we come up with boutique names, first we have to convince the RMs and IAs to be willing to look at these to understand what they have compared with the large names. I also have to be comfortable with the fact my colleagues in the countries we serve will be comfortable with the provider. So I would say brand is still important.”
At the same time, he distinguishes between client segments, acknowledging that brand recognition is more important for the retail market.
“If you don’t have your [brand] name on the buses [during product launch] it can be difficult,” he says, reflecting that large fund houses from the US and Europe are often unaware of marketing requirements for Asia.
However, Tony Stanton, head of investments for LGT Investment Management (Asia), says a lot of its clients are receptive to boutique names. And he suggests it may not be lack of understanding that stymies US or European houses from promoting product in Asia, but lack of infrastructure on the ground.
“One trend we are seeing is big institutions in Europe or the US leveraging on the infrastructure of other organisations to create private label vehicles that then get introduced as a boutique, and these are well received by clients,” he notes.
He adds that he likes boutique firms as they tend to go out of their way to differentiate themselves. “They are more receptive to providing a better story behind who they are because they have a need to. This allows you to personalise the opportunity more.
“If we go back 10 years, every single hedge fund that a client owned was an unknown quantity to the average Asian investor," adds Stanton. "I think clients are quite open to boutiques and from a private banking perspective, some of them actually prefer it.”
Asked if there was a need for product manufacturers in Asia to localise their marketing, he says he would prefer fund houses to stick to their knitting.
“If they do one thing, I want them to do it well. The pitch may need to be differentiated for the different markets you are in, but there is no way you can try to address the specific needs of the Philippines relative to Taiwan, for example.
“Most clients are sophisticated enough to say ‘we are interested in your core competency, but you need to define that for us’, not the other way around,” notes Stanton.
Dupasquier disagrees, citing the example of US and European fund houses seeking to tap into Asian appetite via the income theme. “In that case it was not country-specific, it was Singapore, Taiwan and Hong Kong. That was interesting to see,” he says.
Rene Buehlmann, global head of investment funds for UBS Wealth Management, agrees, suggesting fund houses need to think about the packaging around products. “This is something I have found critical,” he notes.
“If you go for China [product], you want an RMB share class, probably with Chinese marketing material. The underlying is the same, but the wrapper and look and feel around it you probably need to tweak a bit.”
Asked about the differences in packaging from one Asian market to the next, Buehlmann points to language and the need for different share classes. “There have been certain products we could not get off the shelf,” he reflects. “The moment we added an RMB share class it shifted because you tap a different cash pool.”
He highlights monthly or annual dividends as another differentiator. “We could argue from an investment perspective that it [monthly dividends] are not necessarily the best thing to do. But it seems investors prefer that in Asia."
* AsianInvestor’s second annual Private Banking Roundtable was published in full in our November magazine edition. Sponsor Aberdeen Asset Management participated as a silent observer.