Profile: Singapore: From guns to bankers in colonial bungalow

Command House served as the headquarters for the Singapore-based commander-in-chief of British forces in the Far East from the 1930s until the withdrawal of the UK armed forces in 1971.

The colonial bungalow, set in 500,000 sq ft of rolling grounds, second only in size to the residence of Singapore's British colonial governor, echoed with the bark of orders from General A.E. Percival as he unsuccessfully sought to halt the invasion of the island by the Japanese in 1942.

Now a new army, one of private bankers, is being trained there, as Singapore seeks to become the main beachhead for the wealth management industry in Asia. Inside can be heard briefings on portfolio management and client advisory services for the staff of UBS, the Swiss investment bank, which has operated the facility since April.

The campus is meant to address the biggest obstacle facing the private banking industry in Asia – a shortage of relationship managers.

Singapore has become the world's fastest-growing offshore banking centre due to strict bank secrecy laws, low taxes and a strong legal system. But government officials and bank executives worry that the effort could be derailed by an escalating and expensive struggle for talent as more private banks set up offices in the city-state.

“We can import private bankers from the US and Europe, but sometimes they cannot relate to the nuances of the local culture. That’s why we need to develop talent from the region,” says Patricia Enslow, head of Asian market strategy and development for UBS.

Demand for private bankers will grow. The Merrill Lynch Capgemini World Wealth Report estimated that the region's rich held $7,600bn in assets, which are rising by 7 per cent a year.

To help meet the talent shortage, the Singapore government has helped sponsor the Wealth Management Institute at Singapore Management University, while UBS and Credit Suisse, two of the world’s biggest private banks, have set up extensive training programmes in the city-state.

UBS expects that its projected Asian wealth management staff of 5,000 will receive training at the Singapore campus by 2010. But emphasis will be placed on cultivating private bankers, whose numbers are expected to double to 1,800 over the same period.

“While the downside for the industry is the intense competition for talent, the upside is that the industry is attracting many more qualified applicants,” says Ms Enslow.

New recruits are placed on an 18-month associate residential training programme, which includes six weeks of classroom courses in Singapore, on-the-job training and an assignment in Switzerland.

Hong Kong and Singapore provide most of the 60 candidates now taking associate training, with about half having some kind of financial background and the rest coming from such occupations as law, government, consulting, engineering and medicine.

“We look for articulate people who have EQ [emotional intelligence] as well as IQ. We have found that those who have these skills can learn financial management even when they don't have a banking background,” says Ms Enslow. “But it takes three to five years to become a seasoned private banker.”

Those graduating from the programme are certified as qualified private bankers under standards set by Singapore’s Institute of Banking and Finance. The Singapore campus also offers day courses to clients on new investment instruments and asset management strategies.

UBS says the investment in the Singapore campus is justified since wealth management is a main source for the bank's profit growth and accounts for half of its business in Singapore.

The training programmes offered by UBS and Credit Suisse also give them a competitive advantage by developing an in-house cadre of private bankers, while smaller rivals are being forced to hire client advisers from other banks, often at great expense.

The long gestation period to create skilled private bankers, however, means that the competition for talent is not expected to ease in the short-term. The total number of Singapore-based private bankers is expected to double to 5,000 in the next five years.

Moreover, Asian clients tend to be proactive in managing their portfolios, with the result that relationship managers must focus on a fewer number of clients than in Europe or the US.

“Demand for private bankers will eventually ease as the boom in regional financial markets stabilises. We will then see a shake-out in the industry, with some players leaving. That should bring the supply and demand [for private bankers] into better balance,” says Christine Ong, the UBS country head for Singapore.

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