Oreana Financial Services has recently entered the outsourced chief investment officer (OCIO) services market in Asia.
Last year, Purple Asset Management in Singapore rolled out OCIO services targeting family offices with an ambitious goal to triple AUM in 18 months.
Mercer and Willis Towers Watson have long provided similar services, as well.
Oreana labels its own proposition portfolio advisory services (PAS) and it includes strategic or dynamic asset allocation, fund selection, reporting, client communication and governance-related services such as investment policy statements, Luke Moore, chief executive, told our sister publication Fund Selector Asia.
Licence on the way
One difference with a traditional OCIO model is that the various services can be offered separately in modules, according to client needs, he added.
“Some clients are coming to us asking for help in building governance frameworks around existing processes, others want help with asset allocation, dynamic or strategic,” Moore said. “At the other end of the spectrum, clients want a fully integrated solution, and we build and manage it on an ongoing basis.”
The firm also hopes to differentiate on fees, which are levied at the business level off the client’s profit and loss ledger, or directly to the client as an asset consulting fee.
The more services the client uses, the lower the fees due to economies of scale, Moore explained.
PAS is offered in Hong Kong and Australia, where Moore said the firm already has external clients, and a Singapore license is expected to be ready in Q4.
Demand for outsourced services in Asia is mainly driven by two trends, Moore said.
Wealth management clients are growing in sophistication and expect more services from their managers. At the same time, regulators are increasing governance requirements on wealth managers to heighten investor protection.
To drive the PAS effort, Oreana hired former Towers Watson director Flemming Helbo in March to serve as managing director based in Hong Kong.
At Towers Watson – which was bought by UK-based insurance broker Aon in March 2020 – Helbo advised clients and developed the firm’s outsourced solutions business in Asia, working with institutional investors and family offices, Moore said.
Considering all options
Oreana’s service model is aimed at smaller players to larger wealth firms.
“Initially the target was IFAs and wealth management firms who don’t have the capacity or scale to run the services themselves,” Moore said. “But now we are targeting family offices and small institutional clients who we feel could benefit from the service.”
Oreana once looked into using outsourced services for its own firm, the chief executive added. It found large players who were expensive and inflexible on services.
“At the other end, asset consulting firms were good but we were concerned about the depth of resources and their ability to survive long-term, so we were concerned about sourcing their services.”
A gap existed that could be filled through an entrepreneurial approach to asset consulting, provided the firm could demonstrate adequate capability and the potential for long-term profitability, Moore said.
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