(Bloomberg) -- The Covid-19 pandemic has sparked dramatic changes to the wealth management industry, making clients more cautious, more digitally savvy and more interested in sustainable investments, according to a UBS Group AG executive in Hong Kong.
“The whole pandemic has transformed the business and also the way we operate,” said Amy Lo, co-head of Asia Pacific wealth for the Swiss bank. “The world has become more digital, less global and more local.”
Lo says clients across the region have become more cautious, concerned about preserving their wealth and re-balancing portfolios as the global economy heads into its steepest contraction since the Great Depression.
“Diversify and navigate volatility,” is the goal for many clients, said Lo, whose firm manages more than $400 billion in the region.
UBS’s investments in its digital platform are paying dividends amid the pandemic, allowing clients to interact with the bank through online conferences, chats, and trading, she said.
The bank reported a 41% jump in first-quarter operating profit at its global wealth management unit, to $1.22 billion. Asia Pacific accounted for about a third of that, more than any other region.
“The epidemic has changed the way we engage with our clients; it’s basically combining the face-to-face and also all the digital channels,” Lo said in an interview Friday with Bloomberg Television. “We’ve seen activity picking up in digital banking, that’s the way to go.”
Clients are also showing more awareness of environmental, social and governance investing, with about 80% interested in so-called ESG assets, she said.
“They realize the importance of having sustainable growth and looking at better quality companies that focus on ESG,” Lo said.
Remote Work
Lo said remote work for some UBS staff may become the norm even as the rise in new virus cases slows and economies in areas like China and Hong Kong slowly ramp up again. About 90% of UBS bankers in the region are able to work from home, and in Hong Kong one third are still working remotely.
“I think that would stay for some time because we also want to have this split-team kind of arrangement,” Lo said. “It will not completely go away and obviously we are looking at how we adapt the operating model there.”
The bank will continue to make “strategic” hires in the Asia Pacific region, Lo added.
“Asia remains our most important region globally and particularly in this part of the world - Greater China and also the China market,” she said.
(Adds unit earnings in sixth paragraph)
--With assistance from Tom Mackenzie, David Ingles and Karolina Miziolek.
To contact the reporter on this story:
Alfred Liu in Hong Kong at [email protected]
To contact the editors responsible for this story:
Candice Zachariahs at [email protected]
David Scanlan, Jun Luo
