But what is less well known is that a large percentage of these wealthy individuals would prefer to deal with a single firm able to meet a full range of their financial and other needs than work with multiple companies as they go about acquiring and investing in these assets, at least according to a recent survey of a global sampling of high net worth individuals (HNWIs).
The so-called Global HNW Insights Survey, released in June, found that more than 40% would rather have their needs handled where possible by “a single firm”, compared with just 14.4% who expressed a preference for working with numerous entities, each presumably specialising in the asset class in question.
One vision
For Mark Kirham, chief executive of the Hong Kong-based Business Class advisory group, the Capgemini/RBC Wealth Management Global HNW Insights Survey was evidence of something he and his partners already had reason to believe.
Indeed, they have employed it in determining the shape of the business they have built for themselves over the past five-plus years.
“Our vision was to be able to put our arms around the client and take care of everything for them, whether it had to do with insurance, financial services or property,” he explains.
Not, Kirkham adds, that super-rich people are alone in preferring to deal as much as possible with a single company they know, like and feel they can trust.
He says you don’t have to be a HNWI to prefer to deal with people who are not pressured to sell you a product on the spot – a type of pressure he says is less likely to exist in a group structure, since the person asking about car insurance or property is, in many cases, already a client of some other areas of the business.
And if they’re not already on the group’s books they may be soon, even if they don’t opt for the car insurance today, if they’re dealt with properly now, Kirkham says the Business Class Group’s experience has shown.
“You get a client who comes in with a basic question about car insurance and, as you get talking, it turns out they’re interested in other areas as well,” Kirkham explains.
Pre-financial crisis launch
Kirkham founded BCG in 2007 in Hong Kong in the heady days before the global financial crisis, when optimism was high, investment returns were in the double digits, and investors in the special administrative region were piling into exotic investments of all kinds, including, it subsequently emerged, Lehman Brothers mini-bonds (which BCG never handled).
By 2007, Kirkham had been in Hong Kong for four years, after having moved there in 2003 to take a directorship of a small brokerage company. Prior to this he had spent five years in Germany and Brussels with Britex, the advisory company that later became the deVere Group, after beginning his career in the UK – where he is from – with Liberty Life.
After deciding to strike out on their own rather than working for others, Kirkham and his four founding partners – the three remaining ones are Gordon Franks, Nigel Brooker and Mark Cowan – chose the Business Class name for their new venture because they believed it suggested “better levels of service than you might expect while travelling cabin class”, Kirkham says.
The ‘Platinum’ and ‘Lifestyle’ brands were selected as names for the flagship financial advisory operation and its ancillary businesses for similar reasons of association.
From the start, property has been an important element in the BCG business model. Kirkham says: “Ever since I came to Hong Kong, I’d been amazed at how important property was, both to Hong Kong residents and the economy, and I couldn’t wait to dovetail financial and property services into a single business.”
Individual companies
In fact, thoug, BCG isn’t a single business, but rather, a group structure comprised of individual businesses that just happen to share owners, top management, a website and other elements, including many clients.
Although Kirkham and his colleagues were convinced that the multi-brand, multiple-speciality business model was the way to go even before the global financial crisis hit, once markets started tanking and banks were having to be bailed out, it served to cushion them, they believe.
“If we had just been in financial services [when the financial crisis hit] we might well have been dead in the water,” Kirkham says. “So many other companies really struggled at that time, and many still are struggling, especially the smaller ones.”
Recent acquisitions
Today, BCG has assets under management of about $90m (£57.5m), overseen by a staff of 70, of which around 44 are advisers, a size Kirkham says he’s happy with. “Our philosophy is ‘boutique’ is preferable to ‘biggest’,” he explains.
That $90m has been achieved not just through organic growth of the company, but with some help from acquisitions, including the purchase of the Bangkok-based Barclay Spencer advisory business in 2009, for an undisclosed amount, as well as another Thai business, the KFMS brokerage, at the end of 2011.
Local push
Looking ahead, rather than buying market share by acquiring rivals, Kirkham says one of BCG’s growth strategies will be to reach out more to local clients in the markets in which it already operates. The exception to this strategy is Russia, where native Russians already account for most of its customer base.
A major push in this "go local" strategy will be rolled out this month in Hong Kong, where an executive with experience and contacts in the local market has been recruited and is expected to join the company imminently to head up the effort, according to Kirkham.
“We realise this is where the future is,” he explains.
“All kinds of people are interested in many of the services we provide, including the local citizens in the countries in which we have, until now, specialised exclusively in [looking after] expatriates.”
Client concerns
BCG currently has clients ranging in age from thirtysomething to retirement, and spread out across more than 30 countries across the globe. As a result, Kirkham says, the financial issues concerning them vary widely. But across all markets, “job security” coupled with bewilderment at the array of investment options open to them are widespread, he reports.
“In Hong Kong, matters have not been helped by the constant bad-mouthing of investment-linked assurance schemes by the press, and the regulators stressing all the reasons why you shouldn’t be buying one of these things. You can go overboard on the warnings.
“We have been seeing a general shift away from long-term products towards much shorter, non-contractual-term products, which don’t require the person to commit to a lengthy investment period.”
Kirkham believes that some of the life industry’s “more forward-looking providers” are sitting on prototypes of the types of products this shorter-term market is looking for – hybrids of their existing contractual products – but none of them has been brave enough to launch them yet.”
In the meantime, he says, BCG will continue to scrutinise its clients, with an eye towards providing them with the products and services they will be looking for next – for example, non-traditional asset types – and be prepared to evolve with them.
“We must make the changes our clients demand of us, rather than attempting to shoehorn them into whatever is available in the market simply because it is easier.”
