Keeping Your Wealth in Good Health
Nedbank Private Wealth is an international private bank headquartered in the Isle of Man, a self-governing British Crown dependency. The bank has been growing its presence in the Middle East since January 2011 through a representative office established in Dubai and licensed by the UAE Central Bank.
“Our presence in the Middle East allows us to meet the growing and diversifying needs of our existing clients, who are relocating to this region, and also service the requests of new clients in the GCC. We are going from strength to strength. While we are expanding our team in this region, we are also working in tandem with our support team in the Isle of Man, who are handling all the administration and relationship management for clients,” says Andrew Bates, Regional Head of Middle East at Nedbank Private Wealth.
The private bank offers international wealth management solutions in 15 different currencies, including the UAE Dirham. A fully integrated banking and investment service gives a single point of contact across a wide range of financial services, including flexible lending facilities for those looking to buy property in the UK.
With private banking being a competitive sector in the region, Nedbank Private Wealth is focused on its client base, which is predominantly Western expats. The bank takes its time to discover what clients really need and aims to lead with exemplary client service. “Our award-winning products and services are clear testimony of our excellence in client service. This aspect is reflected by the fact that 80% of our new clients come from existing client referrals.”
“Our clients are generally self-made people, senior executives and entrepreneurs who are in the upper levels of their careers. With our heritage and background, Western expatriates, who are familiar with offshore banking services, constitute the largest part of our client base. However, we cater to clients of all nationalities and backgrounds.” Andrew continues, “We are at our best when servicing High-Net-Worth Individuals (HNWIs) who move from country A to live in country B, and wish to manage their assets in country C. With our established international private banking platform, we are well positioned to service the needs of such HNWIs wherever they move in the world.”
The attrition rate of staff in some foreign banks in the local market is very high, however, 50 per cent of Nedbank Private Wealth’s team has been with the company for over ten years. “This is a big advantage when banking with Nedbank Private Wealth as you can deal with the same banker over the years,” affirms Andrew. “Moreover, most expatriate clients, being internationally mobile, can move to any country without having to change their financial arrangements, as we can service them anywhere they go.”
Clients are looking for growth and income, and this is not readily available from conventional cash-based deposits. Whenever clients are in search of a certain kind of return, Nedbank Private Wealth ensures that the client understands the associated risks and charges. “We are now seeing clients look towards the equity markets, which have always been a popular investment class over time. Over the last decade, fixed income has been very popular with clients but, with interest rates being suppressed at the moment, we see many clients turning to international property. It is very important for us to understand what our clients require and what they are trying to achieve, as this varies from client to client.”
Andrew continues by mentioning some of the challenges that private banks face when working internationally. “These are mainly related to the different time zones, the local competition, as well as the rules and regulations of each jurisdiction. The GCC market is quite competitive and businesses need to take their time to understand the market. Before we established a presence in the UAE, I was coming to the region on research trips for ten years in order to assess the market and ensure that we, as a business, understood the region and the requirements of clients here.”
In reply to a question about the offshore private banking industry in the region, Andrew said that on a global level, banks have gone through a dramatic change over the last seven years. “Banks have looked at their overall business model when making decisions about selling or merging parts of their business. A lot of banks are concentrating on clients in their home markets more than ever. There has also been consolidation in the Swiss private banking industry and we may witness more in the future. These changes could be related to capital adequacy or increasing operating costs for some banks. In the last few years, we have seen the exit of some European and British private banks in the UAE, which have sold their retail branches to other banks. Many of these were offering retail banking services, but also had wealth management divisions. Clients who previously dealt with them had to reconsider their overall relations with such banks. Thankfully, we are not affected by these developments and our clients are aware that we are committed to growing within the region.”
Andrew also stresses that local private banks seem to focus more on meeting the wealth management needs of GCC nationals, whereas international private banks are catering more to the needs of Western expat customers.
“Historically, there weren’t a lot of local banks offering good services or international solutions for clients. Local GCC residents would typically find themselves dealing with an international private bank by default. Since the local banking industry has grown, it has gradually taken market share within the local market. Such trends don’t really affect us as we are focusing more on the offshore private banking needs of the internationally mobile expat workforce.”
Banks must comply with certain regulations, tied to the level of transparency between banking institutions as well as the individuals and corporations they are dealing with. “Global regulatory changes, such as the Basel Accords, refer to the banking supervision accords that require banks to retain more capital, which costs the businesses more money. These requirements are designed to make banks stronger, more robust and less risky,” Andrew says.
“The Foreign Account Tax Compliance Act (FATCA) is legislation intended to detect and deter the evasion of US tax by US persons who hold money outside the US. As a consequence of FATCA, a number of banks are no longer servicing US clients outside the US. However, we, as a business, still accept and look after US clients in the same way that we look after any other client, while complying with the necessary rules and requirements, and carrying out the reporting for our clients.”
Andrew gave his views on the future of the private banking sector in the region, “We might see some further consolidation of the Swiss private banks. However, at Nedbank Private Wealth, we are firmly committed to the region. We have many clients that are using Dubai as their international base for work and travel to other countries and we will continue to assist them in their wealth management needs.”
