Singapore: Attracting More Private Wealth Practices

We’ve written before about Singapore as an important financial and legal center in Southeast Asia, and with new legal reforms opening up the market, firms continue to flock to the city-state.  So far, we’ve mostly concentrated on the cross-border transactional nature of the work that is driving an increasing number of firms to establish a presence in Singapore. However, in the July/August issue of Legal Business (subscription required), an article titled Filling Big Shoes focuses on Singapore as a highly desirable destination for firms serving high-net-worth-individuals (HNWIs).  For wealth management practices of offshore and onshore firms alike, Singapore has become strategically important as the global diversification of wealth tilts more towards the Asia-Pacific region. 

According to the 2012 World Wealth Report (free; registration required), published in June by Capgemini and RBC Wealth Management,there were approximately the same number of HNWIs in the world in 2011 as there had been in 2010.  While the number of HNWIs in the Asia-Pacific increased slightly in 2011, the number in North America declined.  For the first time, the Asia-Pacific region became home to slightly more HNWIs than any other region, although North America still accounted for the largest regional share of HNWI wealth.  Specifically:

• The number of Asia-Pacific HNWIs rose 1.6% to 3.37 million in 2011, compared to 3.35 million in North America, and 3.17 million in Europe.
• In North America, HNWIs’ wealth was down 2.3% in 2011 to US$11.4 trillion
• In Asia Pacific, wealth was down 1.1% in 2011 to US$10.7 trillion
• In Europe, wealth was down 1.1% in 2011 to US$10.1 trillion.

Along with the changing demographics in the global HNWI market there are also increasing regulatory pressures on established financial centers, both of which are contributing to the rise of more non-traditional centers according to the latest PwC Global Private Banking and Wealth Management Survey. Respondents to the 2011 survey predicted that by 2013, London and Switzerland and to a lesser extent New York, would be challenged by the rise of Singapore and Hong Kong, and in fact Singapore would top the list of these five international financial centers.

Offshore Firms

Offshore firms that have opened branches in Singapore in the last four years include Collas Crill, Bedell Cristin, Walkers and Cains[1]. 

Channel Islands-based Collas Crill opened an office in Singapore on August 1 of last year to satisfy demand from institutional and private clients in Asia for Channel Islands legal services.  Collas Crill’s joint managing partner in Guernsey, Jason Romer, said:

We are breaking the mould by choosing to open in Singapore with a Channels Islands offering rather than, say, Hong Kong or mainland China. Singapore provides an excellent hub from which to service the region and its established and emerging economies.

Bedell Cristin is the most recent newcomer, opening an office in July to provide British Virgin Islands (BVI) legal services.  Richard Gerwat, Managing Partner at Bedell, commented that it was a logical move, increasing the firm’s global reach and range of services to clients in the Asian region. 

In February 2009, driven by demand for Cayman Islands and BVI legal and corporate services, Walkers opened a new office in Singapore.  The office advises both corporate and individual clients, including ultra-high net worth individuals and their advisers.

Cains, located on the Isle of Man, opened a new office in Singapore in July 2008.  Headed by Mike Edwards, a director of Cains, who presciently said at the time, “It is evident that as markets in the West slow down, investors are looking to the East, and Singapore is well positioned as Asia’s financial hub and a gateway to emerging global markets”.

Onshore Firms

In addition to the offshore firms, a number of onshore firms known for their private client work have also planted a flag in Singapore. 

UK-based Lawrence Graham (LG), with its strong private client and wealth management practice, announced in February the launch of an office in Singapore after forging an alliance with local firm PK Wong & Associates.  LG’s former senior partner Penny Francis has relocated to Singapore to spearhead the launch.  She is joined by private capital partner Nick Jacob, corporate partner Geoff Gouriet, and Sunil Kakkad, head of LG’s India Group, who divide their time between London and Singapore.  Nick Jacob said:

Singapore is an important centre for wealth management and we have a large number of longstanding private capital clients across South East Asia. This alliance with a local firm will enable us to provide local law advice and enhance our ability to look after clients and offer more services.

In May, UK private wealth specialist Withers confirmed that it had launched an office in Singapore to meet the growing demand from high-net-worth individuals for tax and trust advice in South East Asia.  The four-lawyer Singapore team includes Jay Krause, who heads Withers wealth planning group in Asia. Margaret Robertson, the firm’s Managing Director commented: 

Even when we opened in Hong Kong [2008] we knew it would only be a question of time before we set up in Singapore. Having a presence in both locations along with our offices in Europe and the US enables us to deliver integrated advice both quickly and directly to clients across Asia. I forecast that our Singapore office will grow as quickly as our Hong Kong office.

More Room to Grow

Opportunities for private client lawyers appear to be plentiful in Singapore as well as Hong Kong.  Alan Binnington, private client director at RBC Wealth Management, says in Legal Business that he does not see an oversaturated market in either location.  “I don’t see there being a finite amount of space for international wealth management teams operating in Singapore or Hong Kong, as that part of the world is where the wealth is being created.” 

Despite the threat of slowing economies in Asia, with the number of HNWI individuals in Asia Pacific on the rise, there is reason for optimism for firms that specialize in wealth management as well as for the international private client teams at major law firms.  Singapore presents an opportunity for many of these firms to effectively grow their practices in Southeast Asia, where the highest number of HNWIs of anywhere in the world is yet one more measure of the continuing transformation of the global economy.