Wealth management business promises well

As the number of affluent Vietnamese increase, how do you assess the opportunity?   How do you define an affluent and emerging affluent customer?

There is no consistent definition of affluent and emerging affluent profiles across countries and industries. Here in Vietnam, our strategy is to target those who earn VND8 million ($380) or above per month, they account for around 10 per cent of the population in major cities like Hanoi and Ho Chi Minh City. Though there are no official data on the affluent and emerging affluent segments over years, clearly there has been remarkable increase of wealth among Vietnamese.

Vietnam’s income per capita has more than tripled in the last 10 years. Fifteen years ago it was mostly motorbikes in Hanoi and Ho Chi Minh City, now we can see different types of cars on the streets. What is worth noting is the affluent individuals are increasingly looking for a personalised full banking experience based on relationship. They come to a bank not only for transacting, borrowing, or saving needs but also for wealth growth and protection. This is where wealth management comes into play.

In Vietnam, wealth management is still in its infancy. What do you expect in the next two years?

It’s true that wealth management is at a very early stage in Vietnam compared to other more developed countries in the region. The product suite remains simple and limited, financial planning and portfolio management are yet to be offered. There is still lack of a regulatory governing framework.

We have seen exciting developments recently including the set-up of open-ended funds and banks’ offering insurance, dual currency investment, and structured deposits. The next two years will be even more exciting in the wealth management space, and ANZ would like to remain at the forefront.

How can wealthy customers benefit from banks? What are the products or services that are being offered to this group?

As mentioned earlier, banks should provide the full suite of financial solutions to fulfil the full needs of customers: transacting, borrowing, saving, investing, and protection. What is also very important is banks cater to the individuality of customers who have different needs, profiles, and risk-return expectations.

For example, at ANZ we have Dual Currency Investment which suits investors who look for significantly enhanced returns and at the same time accept the risk of principal loss. For those who would like to keep the principal 100 per cent protected and still have the potential of earning higher yield than normal deposits, our Structured Investment Products suite is the best solution. We are proud of being the first bank to offer these products in Vietnam. This has allowed us to be the leading wealth management bank in Vietnam, and it is a major reason why we have recently won the “Best Retail Bank in Vietnam” 2013 award by the Asian Banker.

It seems investment channels such as property and stocks may not be bright in the near term, could you elaborate more on the structured investment products?

The returns on the products are variable and linked to the performance of foreign exchange or gold. The principal amount invested is 100 per cent guaranteed by ANZ as long as the investment is held upon maturity. At ANZ, we can offer up to 18 payout structures for this product suite. This is to cater to different investors’ market views and risk-return expectations. Our structured investment products have been very well received in the market. Since we launched the first product in 2009, our customer base investing in this product suite has increased by more than four times.

The potential of the market is strong, as evidenced by increasing affluence and increasing demand for more sophisticated and individualised wealth management solutions. More and more banks are working on setting up wealth management. The regulatory framework is also developing. We are therefore optimistic about the outlook.