Winners rationale

Chinese HNWIs tend to have a home bias and a penchant for self-directed investing. Indeed, when considering China’s high rates of economic growth and wealth creation, coupled with the potential for investors to achieve outsized returns domestically, it should come as no surprise that impressing upon Chinese HNWIs the importance of pursuing conservative risk-adjusted returns can be a challenging task.

However, one private bank in Asia has done just this. In 2017, Goldman Sachs stood out from its peers in the China International space, clearly demonstrating its ability to win the trust of China’s wealthy by virtue of the quality of its advice and management.

2017 was a record year for Goldman Sachs on a number of fronts. With a stated aspiration to be “more global than local competitors and more local than global competitors”, the private bank continued to evolve its business to one that centres on the delivery of holistic wealth advisory that leverages its strategic partnership with Beijing Gao Hua Securities.

The results speak for themselves. Goldman Sachs’ fee-based business (excluding interest income) from Chinese private clients surged by more than 50%, representing half of the total revenue share – a percentage that surpasses even some of the ‘purest’ private banks that proclaim to have limited interest in transactional income. Moreover, client trust and satisfaction continues to rise, best evidenced by growth in discretionary portfolio management (DPM) assets and a boost in average client account sizes.

Indeed, the bank’s focus on client experience and servicing extends to the quality of its frontline: relationship managers oversee no more than 15 clients each and 20% of them have at least ten years of relevant experience. The bank has also revamped its digital channels to enable online access for portfolio reviews, risk analysis and secured payments, and plans to further enhance the digital platform to include online trading capabilities and interactive sessions with client advisors.

Ultimately, while the desire to tilt revenue share in favour of fee-based income is an industrywide ambition, and though some leading Asia players have made inroads in this endeavour, few can boast that their efforts are led by the Chinese HNWI segment. Goldman Sachs can, and its outstanding progress in promoting portfolio-oriented investing – especially through its wide range of DPM solutions – is just cause for Asian Private Banker to name Goldman Sachs 2017’s Best Private Bank – China International.