egyii blog

 

Very often I speak with private wealth prospects in my daily encounters. The following is an actual excerpt between a “seven figure” private wealth prospect and a relationship manager from a large UK based bank wealth management division. The use of strange and confusing terms, the feeling of betrayal and an obvious air of arrogance put a horrible taste in his mouth about the relationship manager, the institution. The only thing he walked away with, what he felt, was advice from a “barber” and the fact that he would not do business with this “reputable” bank. Who wants barbershop advice at that price?

I arranged a meeting with a large UK based (from here on in called “XXX Wealth Management Division”) bank’s private wealth relationship manager in Singapore mid 2008.  I was interested in depositing a seven figures, plus sum in sterling to a secure bank that could also provide me with some extra services.

My questions to qualify the RM and the wealth management division were as follows:

Question 1: Is my deposit guaranteed in Singapore?

Answer from the relationship manager- Yes.

The true answer should have been NO as the Singapore government only guaranteed funds at end of 2008 and only to Singapore registered banks.

Question 2: “XXX Wealth Management Division” are part of a “much larger bank”, and the “much larger bank” bought another “large European Bank” at the peak of the bubble of banking stocks- is that correct?

Answer from the relationship manager – Yes we did and paid cash – that shows how strong a bank we are.

In truth, “XXX Wealth Management Division” is now majority owned by the UK tax payers and may fall into 100% ownership of the UK tax payers if it becomes a failed operation.

Question 3: I may want a mortgage for a property in Singapore. Is this possible?

Answer from the relationship manager – Yes we can provide them but if the market deflates any more you may have to take a 10% haircut. (I let the lady ramble on for a little while before wondering what a 10% haircut was) and I asked…

Question 4: What is a 10% haircut?

Answer from the relationship manager – It is the difference between the price you purchased the property at and its market value today. Did you not know that?

Question 5: - Investments? Please tell me what you offer

Answer from the relationship manager – Yes we offer hedge funds with a $250,000 USD minimum investment.

I stated that it is just gambling with my money and was of no interest to me. (Mr. Madoff can back me up on this one.)

Comments from prospect:

In any transaction of this kind you want to feel that you can trust the person and the company you are placing the funds with. I felt the opposite of feeling secure especially once I asked my questions to the bank.

Bottom line is I asked no further questions and walked away with the bitter feeling of “sharp city” types who take your money and then fritter it away. You can guarantee one thing – and that is their charges on your capital will be consistent, and high.

 

OUCH!

So, I ask, how difficult is it for the relationship manager to ask the right questions, get a feel for who the prospect is and what the prospect REALLY wants?

Trip Allen, the Egyii Team, Singapore

Tags: Private Wealth, Relationship Management, Trust

This entry was posted on Tuesday, January 6th, 2009 at 12:14 am and is filed under Relationship Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.