After nearly three years of pandemic-fueled anxiety, there has been no let-up in the challenges weighing on wealthy investors in Asia and the rest of the world. Faced with persistently high inflation, rising interest rates and ongoing geopolitical tensions, high net worth (HNW) and ultra-high net worth (UHNW) individuals and families are seeking guidance to grow and preserve their wealth during this volatile period.
“The pandemic has prompted our clients to think more about intergenerational wealth succession. And the changing geopolitical dynamics have further reinforced this need for them to protect and preserve their wealth,” says Bryce Wan, Market Head of North Asia, HSBC Global Private Banking.
With a long history of success in Asia, HSBC Global Private Banking (GPB) is leveraging its comprehensive wealth and banking expertise, international network and digital capabilities to help clients in the region realize their wealth ambitions. In Asia, HSBC GPB has regularly demonstrated its award-winning capabilities in alternatives, credit advisory, wealth planning and philanthropy.
Building Resilience into Portfolios
Against a backdrop of uncertainty, HNW clients are keen to build more resilience into their investments as a buffer against volatility. To this end, HSBC GPB is advising them to rebalance their portfolios towards fixed income, while still taking on some “recession-resilient” risk on the equity side, particularly in the U.S. and Asia.
“On a risk-adjusted basis, fixed income underperformed equities last year, and rates are peaking, so that is a favorable investment environment for bonds, especially mid-duration and quality names,” says Sami Abouzahr, Head of Investments and Wealth Solutions, Hong Kong, HSBC Global Private Banking and Wealth.
He also advises investors to further diversify their portfolios through alternative assets, and to look beyond the immediate to capture opportunities in longer-term structural trends such as green transformation, energy security and smart mobility, among others.
Preserving wealth is just as important as growing wealth. HSBC GPB is also well positioned to support clients in their legacy and succession planning efforts through its market-leading trustee business, protecting and preserving their wealth across generations and geographies. Established in 1946, HSBC Trustee offers clients global coverage with trust companies in Hong Kong, Singapore, Delaware, New York in the U.S. and Jersey in the Channel Islands.
Diversification Remains Critical
Diversification continues to be a key strategy to mitigate risk, and HSBC GPB can optimally help investors diversify their portfolios across assets and geographies. To do so, the bank provides its clients access to global wealth hubs and solutions across four regions—the Americas, Europe, the Middle East and Asia Pacific—through 11 booking centers. Meanwhile, HSBC GPB has over 650 experts worldwide connecting its clients to international opportunities.
HSBC GPB also boasts a successful track record in the alternative investment space, and is able to help investors seek out assets, such as private equity or hedge funds, to potentially reduce the overall risk of their portfolios, as well as uncover uncorrelated opportunities.
“Private individuals have been on a journey to institutionalize how they invest—moving away from short-term trades to long-term investments and structured portfolios. And increasing their exposure to alternatives has been a part of that journey,” says Abouzahr.
“We have been managing alternative investments for 25 years, so we are very familiar with the space. We have the expertise, the connections and the knowledge to help our clients build different kinds of alternatives and integrate them into their portfolios.”
To cater to the next generation’s digital needs and enhance client experience, HSBC GPB has been heavily investing in its digital capabilities.
Indeed, HSBC GPB has invested over US$200 million over a four-year period to build and innovate its core banking and digital platforms. This commitment to digitalization has led to greater convenience and better user experience for clients, including a strong uptake of HSBC GPB’s online trading capabilities, with over 35% of execution-only trades in Asia being completed online.
“We are using digital solutions to simplify and enhance everything to do with clients, from trading to accessing market insights or viewing their portfolios. Our recently launched HSBC Prism Advisory in Asia, a portfolio-based advisory and investment service for GPB and eligible retail wealth clients is a great example of how we are combining expert advice with digital capabilities and institutional-grade risk analytics,” says Abouzahr.
“They can also engage with their relationship managers and investment counselors through instant chat on WhatsApp or WeChat in a secure manner via our client messaging platform, HSBC GPB Chat.”
Solutions Spanning the Wealth Journey
As the wealth of Asia’s HNW and UHNW families are largely derived from successful enterprises, their wealth needs tend to span both personal and business, and are likely to evolve over time. HSBC’s “universal banking model” allows the private bank to bring the capabilities of the entire group—from retail and commercial banking to asset management and philanthropy—to meet the diverse needs of their clients over their entire wealth journey.
Collectively, HSBC GPB’s market-leading capabilities and global network enable it to provide clients in Asia with a “one-stop” solution that caters to their complex and changing needs under one trusted brand.
“We are able to take care of our clients through the wealth lifecycle, from the moment they start to build their wealth to the time they decide to pass on their wealth to the next generation, or give back to society,” says Wan.
He adds: “HSBC GPB is in a unique position to provide a full service to our clients, offering a global presence with local expertise, while staying at the forefront in terms of digital and products. This is critical for HNW and UHNW individuals and families in Asia as they look to grow and preserve their wealth in an increasingly complex environment.”
Investments in emerging markets may be extremely volatile and subject to sudden fluctuations of varying magnitude due to a wide range of direct and indirect influences. Such characteristics can lead to considerable losses being incurred by those exposed to such markets. This article is not a personalized communication from HSBC to you and does not constitute and should not be construed as legal, tax or investment advice or a solicitation of the sale or recommendation of any product or service. You should not make any investment decisions based mainly or solely on this article. All investments involve risks and may experience upward or downward movements and may even become valueless. Issued by The Hongkong and Shanghai Banking Corporation Limited