Co-founder and CEO
AL Wealth Partners
Q. Tell us about your firm
AL Wealth Partners focuses on a client-centric wealth advisory service and has a total of 12 staff including the two co-founders. Each client has direct access to the co-founders’ advice and are supported by the well-trained investment and customer service teams, which know these clients by heart.
Our clients engage us holistically, often given us both discretionary and advisory mandates, with the majority of them putting their entire net worth under our advice/management.
Q. What’s your growth strategy?
The independent asset manager (IAM)/multi-family office growth model allows us to manage large assets under management with a lean and fit structure of 12 people as the labour-intensive processes are done by the custodian banks of our clients’ choice. Such processes will in time likely be replaced by automation.
We are living in an era where technology is making a difference, even disruptively, so by combining ‘high-tech’ with our high-touch value, we should be able to grow the business. That’s why we are actively looking at automation.
For example, we want to develop a tool that filters information quickly so that when we advise, it can be more structured and precise in terms of where the gaps in information for the client may be.
Q. What kind of information are you looking at distilling through technology?
I need to find an IT system that processes information faster than what I’m doing manually right now.
A lot of people rely on Excel spreadsheets to extract all kinds of conclusions based on the inputs. But Excel is one dimensional. We want to look at the entire situation of a client. For example, I want something that can send an alert when a client needs to be reviewed because of circumstantial changes. Once I plug in those changes, it should send an alert that I need to talk to the client about the will, for instance. That doesn’t happen right now.
There are a few players in the market that face the same struggles, though it is mostly on the reporting side. They are trying to consolidate data from the banks and then provide reporting that gives clients all the information in one snapshot, but none of the banks or systems are able to produce it right now. Even when they can, there is so much manual intervention involved that they are not truly automated systems.
Q. What’s your client base?
Our clients are international. They come from Europe, the Middle East and Asia. You should never put all your eggs into one basket, and I learnt to diversify my business from day one because of the Asian Financial Crisis, which hurt many Asian clients.
Q. How do you charge clients?
We charge clients a management fee as a percentage of their assets under management. We never charge performance fees because we are supposed to do what we have said we will do. Just because you do better doesn’t mean you have to ask for extra payment.
Q. In terms of new asset classes such as cryptocurrencies, how are you advising your clients?
It is a development and you can’t ignore it, but until regulations come in place to put the right players in the market I don’t think it’s time to invest. Criminals have always existed, so to be a first-time mover for things like this is actually more dangerous than the potential returns.
We are living in an era where technology is making a difference, even disruptively, so by combining ‘high-tech’ with our high-touch value, we should be able to grow the businessAnthonia Hui
Q. Have you ventured into any new services?
We are constantly evolving with the needs of the clients, from helping them set up a family office to consulting on family office structures. We also advise on wealth planning structures and help them define whether they should have an in-house investment team, outsource the investment to us or have us as the supervisory consultant for the in-house investment team.
We are already setting up funds and structures to simplify the process of investing client money. We have already done the 13X fund, for example, and used the variable capital company-type of structure in the Caymans and British Virgin Islands.
Whether we are going to re-domicile in Singapore is another question. If there is merit to it, I am open to it.
The other thing we do is investor education. We help the client through this whole process and educate them on why certain information is required, especially before it goes to the next generation that has inherited their money.
Q. What measures have you taken to protect client data?
We don’t use public customer relationship management systems and things that can be accessed via the cloud. But there is no perfect system that rules out leaks or hacks.
I tell clients that they should be prepared to have their information out there in one way or the other, but I won’t be the person who leaks or mishandles it.
You have to take accountability for your own information. That’s why the less social media you use, the better.
Q. What are the prospects for the IAM industry in Singapore?
I don’t see exponential growth. A few years ago, I would have agreed with people who are positive and believe the industry is growing. But in the past few years, a significant number of changes have happened.
1) Technology. A lot of us recognise that fund management is a commoditised service which will eventually be replaced by automated processes and technology. That’s why you have to provide holistic, high-touch value to clients as well.
2) Regulations. Some people think that they will be less regulated once they are outside the banks. But the minute you come out, you are subjected to as many, if not more, regulatory controls.
3) Costs. You can’t be a two- or three-man firm with less than $250 million because you won’t be able to produce the high-touch value you represent. There’s therefore a likelihood of more mergers and acquisitions in the industry.
4) Asset growth. Financial assets aren’t growing much this year and all the growth of businesses and real estate is happening onshore, so you can’t capture it unless you have an onshore presence.
Q. What new regulations are you watching?
The Common Reporting Standards (CRS) are a lot more significant than FATCA. They have multiple layers, which the governments have been dealing with. For instance, the redefining of the accredited investor regimes in Singapore, Hong Kong, the UK and Australia are related to the CRS requirements.
The latest development in CRS is the OECD’s Mandatory Disclosure Rules. If you have done anything to help your client avoid CRS reporting, you are obliged to report your client information to your local tax authorities, who will automatically exchange under the CRS agreement to the client’s country.
Once that country gets the client information, they will not only look into the client, but will also have the information of the firm that helped the client, which could include the independent asset manager’s or relationship manager’s name, address and contact details.