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Morgan Stanley In Asia In Talent Fight With Family Offices - Report

Tom Burroughes

24 November 2017

in Asia is wrestling with how to cope with defections of private bankers who have been poached by family offices, creating the paradox of a challenging market for the bank even as wealth in the region continues to rise, according to a report by Straits Times.

Vincent Chui, who oversees the business in Asia, was quoted as saying that at least 10 RMs left the firm this year for family offices, which means total headcount in Singapore and Hong Kong is static versus the end of 2016 at around 100.

Morgan Stanley's earlier plan was to add 20 people this year, he said, adding that some others left by what he described as "natural attrition".

While still a relatively nascent sector in Asia compared with the large family office market of the US, these entities are growing fast in Asia to serve the rising ranks of ultra-high net worth individuals. Recent data from Credit Suisse, for example, shows that Asia remains a hot-spot for UHNW expansion. Comments such as from Morgan Stanley also chime with observations from other parts of the wealth industry to the effect that Asia faces a continued shortage of highly-skilled wealth managers in certain roles. 

The ST quoted a report stating that there are 42 family offices in the Asia-Pacific region. 

A parallel trend, as noted by the publisher of WealthBriefingAsia in research reports in conjunction with UBS, is growth in external asset managers, created in certain cases by bankers and other professionals leaving the bulge-bracket banks. (See a research report example here.)

Chui told the ST that there is a positive side of the change because many bankers quitting firms end up working with Morgan Stanley. Chui said assets under management rose more than 10 per cent this year and revenue generated by the team based in Singapore and Hong Kong grew almost 30 per cent. He reportedly did not give a precise figure.

In its home market of the US, the wealth management arm of Morgan Stanley recently chose to leave an industry-wide pact, or “protocol”, in which firms had promised not to sue rivals in the event of staff defections. The bank said that the protocol no longer served its interests and was being abused.