Q. What’s your business model?

Our core businesses are portfolio management, protection and planning.

The portfolio business is fully discretionary. That’s the biggest part of what we do. The protection business focuses predominantly on insurance, cross-border assets and estate planning.

The financial planning practice is fee-based. We do everything from financial mediation and financial modelling to helping entrepreneurs and small business owners plan around liquidity needs and the development of their business. We also help people with trust planning, while coordinating with their accountants and attorneys.

Q. How big is the team?

We have six partners who also have clients, as well as two senior relationship managers (RMs). We have a total of 25 people on the team. Harmen leads a portfolio management team of four as the chief investment officer.

Q. How many custodian banks do you work with?

We have two main banks and do a little bit of work with a Swiss one. A big part of our work is with brokerage firms – the bulk of that is with Interactive Brokers.

Q. What’s your client base?

Most of our clients are Asia-based, and are a mix of Asian, American and European. One of the unique selling points of our business is that we help American expats or Asian families with US links with their investments in the US.

Q. A lot of wealth managers have chosen to stay away from US clients because of cost and regulatory burdens. Why has your firm decided to go down that path?

We have the expertise, and there’s very little competition in that space. Most of the banks, even if they take on US clients, don’t really provide them with any real tax or legal guidance. We have 15 years of experience advising US citizens living outside the country, and have a number of tax and legal resources. We occasionally get referrals from private banks and other firms who are simply unable or unwilling to provide advice to Americans.

We also see a significant demand from outbound mainland Chinese clients, because the US is still the number one destination for these families for buying real estate, education and potentially setting up a new location for the family.

Q. How are you charging clients? 

We don’t take any form of platform- or product-based compensation. All of our investment work is done either on a flat fee basis or a basis point basis. We typically charge on average 75-100 bps for assets under management. We don’t charge performance fees.

Q. What kinds of vehicles do you put your clients’ assets into?

We are focused on liquid, listed investments. A majority of our client assets are in different model portfolios because all our business is discretionary managed. It can be a combination of exchange-traded funds, low cost funds and single securities. At the moment, we offer global or regional investment strategies. We are developing more thematic model portfolios.

Q. Are you advising clients on cryptocurrencies and blockchain?

No. We plan to look into it and we are able to educate clients on how it works, but we don’t provide advice.

Q. What’s your growth strategy?

We are in active late-stage discussions with a firm in Europe and one in the US as we look to grow our business. One of the firms is essentially the same size as us while the other is in the few hundred million range. We are also open to the major Asian markets of China, Japan and Singapore.

It’s really about finding people whose philosophy is similar to ours. Many traditional bankers or independent financial advisers are product distributors, and that model isn’t what we do. So we’ve also focused on hiring and developing talented young people. 

Q. What digital initiatives have you undertaken for clients?

We have digitised our back office to make sure our compliance system, client relationship management tools and portfolio management tools are all digital.

As we offer a wider range of model portfolios, we are building a piece of software that is effectively the front end for the client experience. We want to be able to offer our clients an investment portal that can help them do their own financial planning, financial goal-setting and online risk profiling in a much more sophisticated way than the five-question form. More importantly, it will allow clients to construct their own portfolios out of our model portfolios in our baskets.

We don’t want to be a robo-adviser, but we believe that the use of technology is useful. We want to be a hybrid – offering digital tools to support our clients and RMs, while also making it key that clients still have an RM.

Q. How is the broader industry landscape changing in Hong Kong?

We have definitely seen more firms being set up in Hong Kong in the past two to three years. Of course, the game changer now is that some of the big Chinese firms that are effectively independent wealth managers, such as Noah and CreditEase Wealth Management, are also coming to Hong Kong.

Secondly, China’s Banking and Insurance Regulatory Commission has made the decision to separate wealth management services from banking operations. So, the big banks in China are setting up separate asset managers too.

Q. What are the new challenges facing the industry?

Cross-border regulations. Historically, a lot of firms have flown in and out of countries in the region and they haven’t been particularly diligent about cross-border policies around providing advice and licencing, but that is changing.

Secondly, one of the challenges for any firm in Hong Kong is the cost of real estate. Many firms have built themselves an incredibly high cost base, and you’re seeing fee compression and business models shifting to more pay per service, and that’s going to present some challenges.

Q. What is the most unusual request you’ve received from a client?

Sometimes we get interesting issues around estate planning and how people want to distribute their wealth. I had one client who was taking fairly complex steps to protect their pet cats, because that was what was important to them.