The Evolving Private Banking Industry
In Years of Eternal Ebbs and Flows

The ongoing financial crisis in the global markets continues to amplify the demand for sound wealth management advice from private banking professionals. The need for private bankers grows with new regulation regime and new financial products in our rapidly changing financial markets. In light of this, HKU SPACE has arranged a professional seminar and invited Mr Alan Luk, the Head of Private Banking and Trust Services at Hang Seng Bank, to share his views and explore the recent development of private banking in Hong Kong and China.

Rise and Shine with Wealth Management

Mr Alan Luk is Head of Private Banking and Trust Services at Hang Seng Bank. He oversees the Bank’s private banking and trust services business, providing wealth management services to meet the various needs of high-net-worth customers. Prior to joining Hang Seng, Mr Luk held senior positions such as Treasurer at a number of international banks in Hong Kong. Mr Luk reviewed with us the development of banking services in the 1980’s. Treasury, retail and commercial banking services are the three major income sources for banks in Hong Kong during those years. Private banking was not common then.

Mr Luk shared, “Many banks relocated their treasury departments to Singapore after the 1997 when sovereignty of HK was returned. At the same time, the financial crisis happened to bring economic activities futher down and returns from business loans and mortgages were reduced greatly as a result. In search for other business opportunities, banks in Hong Kong launched more investment products such as bonds and funds, trying to make good use of the huge amount of money deposits. This concludes briefly how wealth management rise and shine.”

More Risks and Rules Discipline is the Key to Success

Private banking picked up its pace and developed into a significant industry since the year 2000. Mr Luk was working as Treasurer and other senior management posts for several internationally renowned banks during those years, thus obtained ample exposure in private banking business. He said, “As time goes by, private bankers became a job position that enjoyed much appreciation. New comers plunged themselves into the banking industry are placing private bankers as their dream of a lifetime. However, the financial tsunami in 2008 burst the bubbles once again. Banks cannot allow unregulated freestyle trading anymore and new rules and guidelines from the regulatory bodies meant that things will never be the same as the old days. Private bankers are working under a fee-based model now, in pretty much the same way as practitioners of other service industries.”

According to Mr Luk, private bankers in the real life is quite different from what we see in movies, where handsome guys are tasting red wine on yachts after earning huge sums of rewards for both their clients and themselves. Instead, discipline is what it takes to be a successful private banker. They need to operate with rational mindsets, working in compliance with a whole set of rules and regulations. It is therefore a smart move to learn about the financial market, and to obtain knowledge of how to provide tailor-made services for different segments of clients, before entering into the industry.