INTERVIEW
Maybank’s Alvin Lee reveals changes in investment behaviour, wealth preservation Globalisation is no longer the best strategy for banks if they wish to thrive in the new era of investing. SINGAPORE
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he age of cheap money is over. Likewise, investors’ priorities on where to park their wealth moving forward have also transformed in the past three years - with health and ESG as key considerations. “The pivot from just pure profit making endeavors, to investing in something that will help to preserve the well-being of the investors and their family was quite stark,” Maybank’s Alvin Lee told Asian Banking & Finance. The head of Group Wealth Management and Community Financial Services at Maybank was answering a question on the current state of investing and wealth management in Asia and he added, “There was a realisation that wealth was not everything, [that] health was important.” Gone were the days when globalisation was the only key strategy that banks needed to heed. “We have entered into a multi-year period when investors have to be used to higher inflation, higher interest rates, and more protectionism amongst the different countries,” Lee said. Here are more interesting observations on the changing priorities of investors and wealth management customers that came to light in this interview. It’s understandable that during the pandemic and the geopolitical crisis after, some investors may have adopted a cautious approach. In 2023, does such caution continue to reign or influence investment attitudes? If we are strictly looking at 2023, we were just coming out of the pandemic, and then we entered into the Ukraine-Russian war, so energy prices rose. Just as we thought that things were okay, we saw Silicon Valley Bank failing, and then now a bit of an issue with the Swiss private banks. We kind of moved from one problem into another. I do think that at some point, the noise will die down, and then the longer-term mindset will kick in. Asian investors have to get used to higher inflation and higher interest rates, lower level of globalisation and global credit. Asian investors will continue to increase in savviness in investing; they’ll be increasingly international. Whether this international means going all the way to Europe or America or more international within the region, it is bound to happen. And there are certain other developments like in the National Security Law in Hong Kong that will lead some mainland Chinese to look at ways to diversify their wealth. What are the current concerns influencing investment attitudes in 2023? The current hot topic about how AT1 bonds have kind of eroded in value will create some anxiety in risk appetite. Some investors might then say, ‘Look, if this can happen to AT1, what about CT bonds? What about my equity?’ Definitely, we do expect the anxiety level to remain elevated. Once the dust settles, the appetite will eventually come back, just that the investors have to get used to a fairly different paradigm than before. Before the AT1 issues
14 ASIAN BANKING & FINANCE | Q3 2023
Alvin Lee, head of Group Wealth Management and Community Financial Services at Maybank
surfaced, we did see increasing interest in private markets, whether these are private equity or private bonds. This could also be driven by the fact that the rates have increased in the past when interest rates are at zero or close to zero. Anything that pays 2% to 3% was enough to entice the customers. Given a different landscape now, I think an interest in the private market could be the way forward.
Wealth management and in particular private banking is still a people business
What digital services or digital journeys do Asian investors now seek? I firmly believe that wealth management and in particular private banking is still a people business. Very few of us would wake up in the morning and decide to buy a mutual fund or buy a bond, right? We still need our relationship managers to put certain ideas in front of us before we act. There aren’t enough investors who would know exactly what to do given the fact that they would have their day jobs as well. In the foreseeable future, at least, with this current generation of investors, it’s still a people business. If you fast forward to 30 years later, when our children are in our position and they are very used to using digital means to make their own decisions and dealing with boards and online channels, then it will be a different backdrop altogether. But even today, we did notice that investors would love to communicate via digital channels. Once certain ideas are ingrained in them, they don’t mind dealing online.
