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Targeting business owners in Asia Pacific Wealth Management Abstract Introduction This report examines the opportunities for wealth managers looking to attract the owners of small and medium sized businesses. Research by Datamonitor has shown that corporate banks in Australia, Hong Kong, Singapore and South Korea are under-serving their SME clients. This report asks whether this opens up an opportunity that wealth managers can grab. Scope Looks at the financial needs of businesses and their owners and examines ways in which wealth managers and business banking teams can work together. Sizes the SME and HNW markets in Australia, Hong Kong, Singapore and South Korea. Provides action points for wealth managers and SME banks looking to attract and retain businesses and their owners. Highlights There is an enormous opportunity in the market. Not only for wealth managers to take on the role of advisor to the business owner, but for SME banks to take an initiative and ramp up their value-added services and advisory capability. By comparison with the number of SMEs, the HNW market is small. For example, South Korea the largest SME market of the four countries in this study is home to 2.9 million small and medium sized enterprises. In the market there are very few targeted offerings from wealth managers to business owners and this gap can be exploited by proactive players. If SME banks, private banks and wealth managers target niches now then they have time to build up a reputation their chosen segments and will be well placed when this type of servicing becomes the norm. Reasons to Purchase Find out how big the markets are and what your potential share is or could be Find out how big the gaps are and what the opportunities for growth will be going forward Find out who is competing in the markets, what they are doing well and what innovative players are doing in overseas markets to attract these clients Table of Contents TABLE OF CONTENTS INTRODUCTION 8 Who is the target reader? 8 Research methodology 8 WHY TARGET BUSINESS OWNERS? 10 Financial needs 11 Personal versus business needs 12 The transition process 15 Market Size 17 Number of companies 17 Outstanding deposits and loans 18 Other targets 20 MEANS OF ATTRACTION 21 Internal referrals 21 Westpac 22 Sand Aire 22 Partnerships and JV’s 23 Product or service pushes 24 National Australia Bank 24 RBS Mentor Services 24 Coutts Asset Reserve 25 Fiducian 26 Sponsorship 27 St.George 28 SICCI-DBS 28 Community ties 29 BankWest 29 ACTION POINTS 31 Step lightly on each others toes 31 Fostering referral 31 Valuable visibility 32 Pertinent partnerships 32 Offering value-add 32 Proactively seeking clients 33 Business relations 33 APPENDIX 34 Data 34 The Global Wealth Model 35 The UK sub model 35 Asia-Pacific sub model 35 Forecasting methodology 35 Datamonitor’s wealth numbers compared with others’ numbers 36 Datamonitor’s SME Model 37 Bespoke Wealth Market Sizing 38 Further reading 39 Wealth Management in Asia-Pacific SPP: Reports 39 Wealth Management in Asia-Pacific SPP: Insight Reports 39 Wealth Management in Asia-Pacific SPP: Competitor Tracking 39 Datamonitor Financial Services Consulting 40 Asia-Pacific contacts 40 LIST OF TABLES Table 1: Number of SMEs and HNWIs in Australia, Hong Kong, Singapore and South Korea, 2003 34 Table 2: Total SME deposits and loans outstanding in Australia, Hong Kong, Singapore and South Korea, 2003 34 Table 3: HNW liquid assets in Australia, Hong Kong, Singapore and South Korea, 2003 34 Table 4: Wealth markets that have been modeled using the Global Wealth Model 38 LIST OF FIGURES Figure 1: Methodology diagram and report structure 9 Figure 2: A client can with multiple relationships with the bank which could cause problems of internal conflict between business units and cause problems for the client 12 Figure 3: There are many more SMEs than HNW individuals in Australia, Hong Kong, Singapore and South Korea 18 Figure 3: Loans outstanding to SMEs consistently amount to more than two thirds of deposits, indicating that not all SME owners would be appropriate targets to wealth managers 19 |