Michael Blake – who is at the helm of 48-year-old private bank UBP’s business in Asia – shares his reservations about robo-advisory, expresses why “there’s no such thing as a free lunch” when it comes to investing and reveals his own investment strategies.
What Is the Average Profile of Your Clients?
The majority of our clients are first- or second-generation entrepreneurs. Many are still running a family business, have excess liquidity and usually have commercial or financial interests across different jurisdictions. Over 40% of assets managed by UBP in Asia are for ultra-high-net-worth clients and that is a proportion that continues to grow.
Why Should Investors Engage a Private Bank Over Other Wealth Management Service Providers?
Private banks have the necessary expertise, financial strength and customised investment approach. When I ask clients how they choose an investment advisor, they invariably look for a long-term relationship manager, institutional strength and the ability to deliver a customised investment strategy – often with leverage.
A private bank is uniquely placed to offer a long-term solution for these requirements. Other providers advise on some aspects, but very few provide a comprehensive service.
Why Should Investors Engage UBP?
Investors who are looking for a pure play private bank with strong investment management credentials should engage UBP. We’re particularly well-suited to ultra-high-net-worth clients who are looking for a customised investment strategy. Our private ownership not only ensures an alignment of interests with such clients, it also enables us to make decisions quickly.
We don’t believe in a passive approach to wealth management – we believe in active management and that’s part of the service UBP provides. We’re now in a period of significant economic change – rates are rising, inflation is increasing and political risk is high. All of these trends translate into potential volatility and make active portfolio management a necessity in the current market environment.
To Cater to a Younger Segment of the Wealthy, Private Banks Have Started Paying More Attention to Digitisation. Does UBP Have Any Plans for That?
Of course, we continue to watch developments in this space very closely. We already provide clients with online services and have a bank-wide digitisation plan. However, it is important not to forget that – first and foremost – clients are looking for good advice over the long term. That is the foundation of a strong relationship, rather than a nice app.
UBP’s approach is to concentrate on getting the investment advice right – often with the help of sophisticated technology – and then to look at the most efficient way to deliver that advice.
Ultimately, most wealthy clients are looking for someone who translates their personal and often complex investment requirements into a coherent strategy – and then advises on the nuances as well as available choices. I’m not sure you can deliver this solely through a computer just yet.
What Advice Do You Have for Investors Who Are Hunting for High-yield Low-risk Products?
There’s no such thing as a free lunch. Investors must be cognisant of the correlation between risk and returns as well as appreciate the need to focus on risk-adjusted returns.
What Is Your Own Investment Strategy?
I’ve been in Asia for about 20 years and tend to invest close to home. I’ve also taken a long-term approach to my investments, tending towards discretionary rather than advisory. This is really a function of time – I’d rather delegate to a portfolio manager than do it myself in my limited spare time.
Based on Your Observation, What Are Your Clients Looking for These Days?
They are looking for innovative solutions. For example, we are seeing a strong interest in direct investments – taking direct stakes in companies and projects. Perhaps because many clients in Asia made their money through their own businesses, they are attracted by the thought of owning direct assets as well as the diversification effect of such investments within their broader portfolios.
How Is UBP Responding To That?
Over the past year, we have introduced a number of opportunities in the real estate and aircraft leasing space to accredited or professional investors – which have been well-received in Asia.
We have also teamed up with the investment manager Partners Group to create a fund – UBP PG Active Income – which invests in both public and private debt markets. We continue to work on future solutions in line with evolving market developments and client demand.