WEALTH MANAGEMENT | Cesar Tordesillas, Thailand

Thailand's SCB adjusts to needs of its wealthier customers

Siam Commercial Bank changed its private banking strategy for clients who are getting richer.

This is to cater to their risk appetite and investment objectives.

People who are getting richer, including inherited-wealth customers, who now have a better understanding of risk and appreciate the need for a wider range of investment options.

Heritage-wealth families have traditionally wanted the bank to protect their wealth and invest it in conservative products such as deposits. However, the more advanced market has educated these clients to look beyond their families' wealth protection because the returns from conservative investment at present are unable to beat inflation, said Lalitphat Toranavikrai, head of private banking at SCB.

There are many instruments that give better returns than deposits, and the bank's asset-allocation service offers appropriate investment options, she said.

The return on investment for conservative products is about 4-5 per cent per annum, while the return on aggressive products should be 7-8 per cent. This could be higher or lower based on a client's risk appetite, the investment objective and the period of investment, she added.

SCB spent three years upgrading its private banking in line with its standard of global investment philosophy, said Yol Phokasub, senior executive vice president and head of the bank's retail banking group.

The philosophy and associated strategy consist of understanding client needs and insights; defining client investment objectives; setting up an Investment Intelligence Centre (IIC) to develop asset-allocation plans; implementing solutions in accordance with the risk appetite of customers; and monitoring and reviewing progress.

The relationship manager at a branch has until recently played the main role in looking after private banking customers, but nowadays this might not be enough to respond to the new requirements of the wealthy, he said.

The bank has, therefore, set up a "private banker" service and an IIC, apart from the relationship manager service, to look after wealthy customers.

SCB already has 40 of these private bankers, which it targets increasing to 100.

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