Terence Chow Head RBC Wealth Management Asia

A swagger has returned to RBC Wealth Management in Asia. Armed with a clear value proposition and a dynamic new leader, the private bank is on a mission to show clients and the industry why it has a ‘right to win’ when it comes to ‘Asia’s global families’.

Terence Chow, RBC Wealth Management’s Asia head, sat down with Asian Private Banker to discuss the bank’s offering and vision in a region where some would say it was punching below its weight.

Terence, you have been in the region for just over a year, first as RBC Wealth Management’s Asia COO and then as Asia head. I can’t imagine a more challenging time to move to Hong Kong.

It has been an interesting start, to say the least, but Asia has always been a passion of mine. My parents grew up in Hong Kong and I have a lot of friends here, so to be able to come to this region — which is so dynamic, where the growth story is so impressive, and to do so with RBC — was an opportunity I couldn’t pass up.

How important was it for RBC to appoint a regional head with cultural ties to this market?

I’ve been in Hong Kong for a year now. Sharing cultural ties and being able to speak the language, whether Cantonese or Mandarin, goes a long way towards connecting with everyone — clients and colleagues — on a personal level. Not to mention the fact that I am Canadian which, combined, gives me a strong corporate and market cultural affinity.

Arguably, RBC’s Asia wealth management franchise has been punching below its weight in terms of market visibility and penetration relative to the bank’s standing in North America and to international peers in the region. Is this a fair observation?

I think in terms of visibility, that’s potentially the case, yes. But our strength, stability and everything the RBC brand represents has always been here and we have been consistently delivering for our clients in the region. Now, our next step is to start increasing that brand awareness in Asia by being more vocal about our capabilities, our services and offering, and critically, our culture. We have spent a lot of time challenging ourselves on articulating our value-add and where we have the right to win. And under Peter Corry's leadership, we developed a much clearer view about our place in this market and our competitive edge.

What, in RBC WM Asia’s view, is its competitive edge and value add?

We are the bank for Asia’s global families (AGF). And it’s important to point out what this means. We are uniquely positioned to service families in Asia, Asian or otherwise, who have connectivity with Canada, the U.S., and the UK. We are, after all, the market leader in Canada, a top-five wealth manager in the U.S., and slowly becoming a meaningful commercial and retail bank on account of our acquisition of City National Bank in 2015. Our investment bank ranks in the top 10 globally and we have a sizable trust business in the Channel Islands, as well as in Hong Kong and the U.S.

So for clients that have connectivity to Canada, the U.S., and the UK, we are a viable and relevant partner. If a family has kids going to school in Canada, who then graduate and establish roots there, and then their first generation is thinking about transferring wealth and leaving a legacy, we understand and are configured to meet their needs. Similarly, if you are a U.S. person, we understand what it means from a tax perspective. We understand what it means if you are a resident non-dom in the UK. If you have business needs in these jurisdictions, whether to buy a business, to find a business partner, or to acquire a property, these are all areas where we have expertise.

The U.S. client segment has been neglected by private banks in Asia, for fair reason. I’d agree that has largely been the case, but it doesn’t have to be. The fact that we can onboard a U.S. person is definitely a hidden gem of ours — we know that there are quite a few firms here that can’t do so. But what this boils down to is our capabilities and skills as a global bank. Winning is in our DNA and our success is founded on the collaborative approach we take as an organisation to service clients with complex multi-jurisdictional needs at the family level as “One RBC”. 

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As things stand today, how satisfied are you with your footprint and market penetration in the Asia region?

Our Wealth Management – Asia leadership team is structured as a single unit and we look at the region as a whole in terms of our strategy and focus. We have booking centres in Hong Kong and Singapore and place an equal weighting on both centres as each location offers something important. There are a large number of Canadian citizens residing in Hong Kong so we have a number of conversations happening there right now. At the same time, being in a country like Singapore with its robust infrastructure, transparent rules, and strong regulation, makes it easy to do business there. And, of course, clients in North Asia are increasingly looking to book out of Singapore.

But I would also point out that we focus on clients in eight strategic locations in Asia: Hong Kong, Mainland China, Taiwan, Singapore, Thailand, Indonesia, Malaysia, and Brunei. We’ve also added resources to our representative office in Beijing and, in collaboration with our retail arm there, we’re excited about the immense opportunities to potentially work with families who are sending their children to Canada for schooling. This is a very good pipeline for business and aligns perfectly with our AGF client strategy.

And how satisfied are you with the quality of your book?

The quality of our book is fantastic and sits comfortably within our risk appetite. We play to our strengths and focus on HNW/UHNW clients with needs that draw upon our local expertise and our global capabilities. If a client has substantial global needs that make use of our private bank and other divisions, we are perfectly suited.

There is a palpable sense that the business has been re-energised since you took over. How does this translate into hiring activities?

I was fortunate to join a team that was energised and eager to execute on a well-developed strategy. And this means that we are actively hiring. We don’t have a hard target, but I’m having more discussions with candidates than ever before. We are looking for bankers with a collaborative mindset who work well in an open and transparent environment. And this requirement is reflected in how we interview. We typically ask a candidate to meet a number of different people representing different functions of the bank, to gauge their ability and to ensure that they will be a good cultural fit. This also ensures that everyone gets to know each other well so that there are no surprises and that new RMs can join us and do what they do best — which is to service their clients.

Do you intend to follow the path that some of your international peers have taken by making a clearer distinction between farmers and hunters?

We are an relationship management-led business, but with a very strong supporting cast of product and investment specialists. We have looked at drawing a stronger line between hunters and farmers, but I still fundamentally believe that private banking is a personal business. In this sense, managing a relationship from a single primary point of entry simplifies things. 

Does this not place an enormous amount of pressure on the RMs themselves to navigate a large group and activate the ‘right’ parts of the business?

I think our approach to hiring and our culture is what enables our relationship managers (RMs) to be successful. As mentioned earlier, before RMs join, they’re already introduced to a wide audience of partners that they would be interacting with on a daily basis. We also have leaders across Asia who have worked in many different geographies and business lines across the bank. This provides our RMs with a rich source of information and connectivity for them to be able to service their clients effectively. In addition, we also have a global team called the Enterprise Strategic Client Group that we can draw on to help connect dots across the entire organisation. This group is agnostic to any business line and is there to solely focus on complex needs of our largest clients.

For candidates, the quality of your product and solutions offering is a primary consideration when deciding whether to join. Do you believe RBC WM is sufficiently competitive on this front?

Before diving into any discussion on product, I would point out that we place tremendous emphasis on understanding our clients and their needs. Our commitment is to ‘lead with discovery,’ not starting conversations from a product perspective. That said, and at a high level, we are strong on all aspects of investments and wealth planning solutions. Our discretionary and advisory solutions are innovative and ever evolving to meet clients’ needs, and in fact, I would argue that our various fee-based propositions are a real differentiator. We do have some ground to make up with respect to private equity and the alternatives space, but we are actively working on this. And finally, we can readily accommodate those clients who are more focused on transactions, across a wide array of asset classes.

What we are also seeing is that first-gen entrepreneurial clients want to keep their hands on the steering wheel, which is why advisory mandates are particularly important. The next generation, who seem to be more aligned with Western preferences, are more inclined to spend their time on passion interests than actively managing the family wealth. They want to be stewards but are open to hiring professional managers. Some of our new investment solutions cater directly to this trend. They are also more focused on ESG as a priority, so this is a key factor in our investment process. Then, there is the fact that fee-based solutions better align the interests of the bank and client, and makes for a far stickier long-term relationship.

Entrepreneurial clients in Asia also tend to be balance sheet intensive. Is RBC WM as competitive as it needs to be on the credit side?

We do extend balance sheet, for sure. While our relatively conservative risk appetite has kept us (and our clients) in safe harbour, we do want to be competitive and grow our credit book. When we are talking about servicing Asia’s global families with multi-jurisdictional needs, we have certain bespoke capabilities that other banks cannot offer.

I would also point to our strength in wealth planning, which is a critical element to serving Asia’s global families. We have wealth planners in Hong Kong, Beijing, and Singapore and we encourage all our RMs to involve a wealth planner to look at their clients’ needs holistically. 

Finally, what enhancements are you making on the operational side to support your growth agenda in Asia?

We are actively working with team heads, and our operations and technology teams to better understand concerns and priorities, and to increase our agility. We have introduced better workflow solutions — including deploying robotics process automation — and further streamlined the backend, which has had a positive impact on our client onboarding times.

When I first came to the region, a typical account might take around 45 days to onboard. We are now down to 20-25 days. We are working hard in terms of digitalising onboarding and on new functionalities such as esignatures, which we recognise as an important part of the way we will do business going forward.

Our goal is to be a digitally-enabled relationship bank, and we are focused on deploying technology to enhance the client experience, improve productivity, while building deeper relationships with our clients. The key here is to change the work we do and how we do it, all with the client experience as a central focal point. We’ve put some very specific employee training and development in place to re-skill our team members for future work and they are really embracing these changes.

This article was originally published by Asian Private Banker