Picking the best man no matter the nationality: UBS' Asia-Pacific wealth management h

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Picking the best man no matter the nationality: UBS' Asia-Pacific wealth management head Edmund Koh

He is a champion for Singaporeans at UBS, but insists that a global hub needs international talent

Yasmine Yahya
Assistant Business Editor


Swiss private bank UBS' Asia-Pacific head of wealth management, Mr Edmund Koh, is proud to be a Singaporean, make no mistake about it.

But when it comes to hiring decisions, he will choose the best person for the job, regardless of nationality.

In a frank interview with the media last Friday, Mr Koh said that Singapore has "swung too much" towards prioritising the hiring of local over foreign talent.

"First and foremost I am very proud to be a Singaporean," he said.

"But I'm also acutely aware that we should not overplay that, because being a cosmopolitan city and being an international hub, we need to... be pragmatic and realistic about what our requirements are."

In short, he said, an international financial hub requires international talent.

"In banking there's one thing that's very important and that is affinity-built trust," he noted.

For example, he said, if an Italian client interested in investing in China were to approach a bank in Singapore, he would be ill-served by an adviser who does not really know Italian culture, or how to build a relationship with someone from Milan, versus someone from Rome.

"Remember, because of that kind of deal flow that comes to Singapore, we create more banking jobs. If you are so myopic and keep thinking it has to be local, local, local, we lose that element of internationalising, of being truly an international centre," he said.

"Yes, I'm a champion for Singaporeans. Once a very wise man told me: 'Ed, we must never forget to plant our own timber.' Yes, we plant our own timber. We should. But if you need to supplement it, if you need to buy an orchard, then you buy it."

To be sure, Mr Koh has made some high-profile local hires.

He recruited former Singapore Exchange president Gan Seow Ann in 2013 as vice-chairman of wealth management in South-east Asia.

And last week he announced that he had managed to convince banking veteran Tracey Woon, now Citi's vice-chairman of Asean corporate and investment banking, to join UBS, also as a vice-chairman of wealth management in South-east Asia, in the third quarter of this year.

While his views might not be considered politically correct, the 55-year-old said, he believes it is what Singapore really needs.

"I care for my country. If I look at my country 15, 25, 30 years out, this is what we need for now. We need to be nimble and pragmatic, we need to communicate very well our needs and we need a balance."

Mr Koh himself has benefited from a meritocratic and international culture at UBS. At the start of the year, he was promoted to head wealth management in Asia-Pacific, becoming the first Singaporean to hold that role.

He is the only Singaporean on UBS' global wealth management executive committee, and is also the bank's global head of affluent and its country head in Singapore.

It is an impressive list of roles, especially given the fact that UBS is the largest private bank in the Asia-Pacific by assets under management.

In the fourth quarter of last year, the bank's wealth management business had total invested assets of 272 billion Swiss francs (S$382 billion),with 1.8 billion Swiss francs in net new money.

The global financial markets have not gone easy on Mr Koh since he took on his new role.

"The first quarter was the toughest beginning to a year that many of us have experienced in many years. All the different asset classes are not only volatile but have taken quite a fair bit of beating," he noted.

Amid the market uncertainty, clients are making fewer transactions while seeking out solid investment ideas for the future, he said.

"The behaviour I've seen from clients during this period is all the more they expect very good advice on their existing investments as well as opportunities going forward.

"We also see clients consolidating their wealth management and banking accounts, preferring clearly a very strong focus on research materials and ideas."

And given the volatility of the markets, Mr Koh has not set any specific targets for himself in his new role, aiming instead for gradual but steady growth.

"My target is always to progress forward. In headwinds, which is what we had in the first quarter, (we have to) huddle down, put our heads down and walk. You will still advance but slower. In today's environment you aim long, you execute short and you progressively get there."

In the meantime, his advice to his team is to bear in mind UBS' weaknesses, which should motivate them to do their jobs better.

"Our weakness is we are not a corporate banker, we don't have a retail base to farm on. What's our strength? Because of our weakness we need to be hungrier, we need to prospect better, we need to do what we have and do it very well."

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Ballast and balance in wealth management, according to UBS's Edmund Koh

By Jamie Lee

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@JamieLeeBT

Apr 4, 2016


STICKING his elbows out to make his point, UBS's top wealth management executive in this region, Edmund Koh, says he gets a little on edge with anyone breathing down his neck in a queue. Mr Koh, already ahead of the pack while running the largest private banking franchise in the Asia-Pacific, wants to keep inching ahead.

To keep a healthy distance with the next ones in line - that would be Citi, and Credit Suisse, according to rankings - he has snapped up an investment banking veteran, Tracey Woon from Citi, to patch gaps in a pure private banking play. Hiring top names such as Ms Woon, and Gan Seow Ann, the ex-president of the Singapore Exchange, are ways to stitch up advice that takes a sweeping view across Asian entrepreneurs' wealth that are intrinsically tied to business fortunes.

"We're not a commercial bank ... so we need to be hungrier. We don't have a buffer. I don't have four, five lines of business to look at," said Mr Koh. "When you're the No 1, you don't have somebody's back to look at. You have to keep your ballast and balance about you."

That these recent hires are also Singaporeans is a source of pride for Mr Koh, who was promoted some three months ago, and is the only Singaporean member of the UBS global wealth management executive committee. But he was candid in observing the pendulum has now swung too much in favour of inward-looking behaviour. Singapore, as a cosmopolitan city, must remain practical and humble in hiring decisions. "I think we have swung too much in the other direction," said Mr Koh. "Too much salt will kill the dish."

He is clear that hiring on merit is his guide; it is that in judging at the same level of skill-sets, Singaporeans are favoured due plainly to costs, and having homegrown talents rise through the ranks. "Once, a very wise man told me, 'Ed, we never forget to plant our own timber.' But if you need to buy an orchard, you buy it."

The need for strong advice is one demanded from wealthy clients, for there are undoubted headwinds for markets and so, for UBS, which managed 272 billion Swiss francs (S$382 billion) in the Asia-Pacific at end- 2015.

Performances across different asset classes have taken some beating in the first quarter - traditionally the toughest - said Mr Koh. "It's a very potent and toxic situation," he said, referring to divergent monetary policies and China's shift from manufacturing into consumption. "It doesn't lend clarity to the market, which is typically what you want."

The bank has seen its clients deleveraging since last year, and sees no risk of losses so far, said Mr Koh.

It also has some trends moving in its favour. Wealthy clients in Asia are consolidating their numerous banking relationships. On top of greater jitters over market volatility, clients are raising their positions in top-tier private banks with smaller outfits being sold as regulatory costs bite. Close to 30 per cent of total wealth-management assets of UBS come from Asia-Pacific clients. "The cost-to-income ratio is clearly unsustainable for some of the mid-tier players. You have numerous houses that are leaving the business, or are being acquired. Do I see more coming? Possibly," said Mr Koh.

The bank is not closed to acquisitions, but Mr Koh said he is wary of duplication, given UBS's size. As it is, the bank captures the biggest share of wallet from its clients, and unlike most competitors, retain clients when relationship managers leave.

Mr Koh is not deterred by fresh attention on tax amnesty in Indonesia, with the country offering tax evaders generous incentives, including a much smaller tax rate on disclosed wealth. A great swathe of private banking clients in Asia are from Indonesia. "If there are missteps, a tax amnesty is an excellent opportunity to regularise matters," said Mr Koh, noting clients are not restructuring businesses as a result, but can run into complications in complying with different jurisdictions' accounting rules for their overseas investments.

"It is a misnomer and fallacy to think that these guys are evaders," he said, adding that the bank has strict on-boarding processes.

Technology has been a boost for banks, said Mr Koh, allowing senior bankers - who are hard to find - to stretch the dollar, with algorithms helping to prioritise clients they should call in times of volatility, and predictive modelling already in place.

"I look at it as a steroid to improve productivity, but not as a full replacement except for transactional banking," said Mr Koh, noting that in time, branch networks of retail banks could be halved. "Remember, in life, the hierarchy of risk for everyone; the first thing is our health, secondly is our wealth. If you really need specialised consultation, would you go online? I wouldn't."

To be sure, the digital move has already impacted back-end jobs at banks, and changes have been quick, he said. But amid fears over structural displacement of jobs, he is hopeful workers will be nimble to transit into new roles. Singapore's skills upgrading programmes can help Singaporeans adapt, he said.

"With Alibaba, buying and selling through the Internet, you can say, 'Oh, it decimated the physical retail industry.' It is not true. It took away market share, but it also created employment for warehousing, transport, postal services, and people taking orders via the Internet 24 hours a day," said Mr Koh.

"Even my mum is playing Sudoku through her iPad. In her past, she used to go about the house with her erasers. I haven't gotten her to use Facebook before she starts wanting to see me online," he quipped.

At the intersection of technology, taxes, and jobs, is the poser of income inequality, with questions over how the gap should be closed between the well-heeled and the less well-off.

"Society has its own way for adjusting, to what it thinks would be a fair equilibrium. Singapore, for one, has been able to do that very, very well over the years," he said. "Income inequality has happened over the centuries of mankind. But let us not forget that those who are deemed to be rich are also providing a lot of employment. Those who are eking out a living, let also not the rich forget that they also contribute to their welfare. It's a symbiotic relationship."

Amid the confluence of change, Mr Koh is calmly bracing for them.

"If you ever walk in a wind storm, which is what I did, stupidly, as a young man, you'll learn that when there are headwinds, you put your head down, and walk. You'll still advance, but slower," he said. "When the wind is on your back, stand up and let the wind push you forward."