UBS Group AG is maintaining fund flows at its Taiwan wealth unit and expects double-digit percentage growth this year, even as tensions with China spook investors.
While some clients are transferring assets to financial centers such as Switzerland or Hong Kong, others are reconfiguring their portfolios and bringing funds back to Taiwan, said Henry Su (蘇韋毓), head of wealth management for UBS in Taiwan.
In addition to geopolitics, clients are considering intergenerational wealth transfers and supply-chain issues, he said.
Photo: Liao Chien-ying, Taipei Times
“In the past, it’s much more about the S&P performance after one quarter,” he said, referring to the US benchmark stock index. “Now we see very different things on top of our clients’ minds, especially around those three trends.”
UBS Taiwan’s wealth management business is hoping to achieve double-digit percentage revenue growth this year, in line with business expectations. It plans to offer alternative investments, to which Taiwan clients have historically had little access, and focus more on onshore banking for the nation’s economy.
“It’s important for us to get out of our comfort zone,” Su said in an interview in Taipei. “We are going to go even more local.”
UBS Taiwan has about 450 staff, and the firm expects that number to increase to more than 500 in the next five years, Su said.
Tensions with China are top of mind for investors, especially ahead of Taiwan’s presidential election next year.
Last year, global financial firms asked staff to review contingency plans, while local banks have slashed their exposure to China to the lowest level in at least a decade.
At the same time, Taiwanese businesses have significantly reduced their new investments in China as they diversify manufacturing locations.
For second or third-generation business owners, assuming they still consider Taiwan home, the families have to consolidate their overseas wealth back to Taiwan to plan for intergenerational wealth transfers, Su said.
Last month, China’s People’s Liberation Army (PLA) completed three days of military exercises around Taiwan after President Tsai Ing-wen (蔡英文) met US House of Representatives Speaker Kevin McCarthy in California.
Last year, the PLA nearly doubled the number of military flights around Taiwan to more than 1,700.
“Some clients reacted strongly and transferred their funds elsewhere, while some just asked: ‘What do you think and how should they plan for it?’” said Su of the reaction to the military drills.
Despite geopolitical concerns, banks have been expanding their wealth services in Taiwan amid a regulatory push. HSBC Holdings PLC recently opened new wealth management centers, while the Financial Supervisory Commission has been approving more local banks to provide services to high-net-worth clients.
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