Wealth management services launched in Vietnam
“What we are gathering strength to develop now is the wealth management platform. It is now the right time to launch the service,” the banking director of a large bank said.
There are several reasons for the banker to think now the ‘right time’
First, commercial banks have undergone the first restructuring period, the most difficult one, and they have become ready for the new development stage with big changes in the financial service market.
Second, medium- and large-scale banks have improved their capital, governance skills, knowledge and built up long-term development strategies.
Meanwhile, the watchdog agency always encourages banks to develop new banking services instead of relying on credit activities.
Many bankers dream of providing wealth management services, especially in an attractive market like Vietnam.
Third, not only banks have become ready for the new service, but clients have also become quite different. Official reports all show that the number of wealthy people is on the increase and that there is an unofficial investment outflow from Vietnam.
“Why do Vietnamese make investment in other countries? Because they have nothing to play in the domestic market,” a banker said, adding that if Vietnamese commercial banks do not ‘take action’ right now, they would miss the great opportunity.
He believes that if Vietnamese can find good investment opportunities, they will grab the opportunities, because doing business in the environment where investors live and understand is the best choice.
Commenting about the market potential, he said wealth management service providers will not only target the rich but middle-income earners as well.
“The wealth management service may not see a boom immediately, but I believe that the boom would happen in several years and the service will develop very rapidly,” he said, adding that clients are getting smarter and more demanding.
However, the banking director admitted that it would be not easy to obtain because of several reasons.
First, many Vietnamese don’t want to see their assets exposed to the public. Not everyone can prove the origin of their assets and most of the rich don’t want to show the public that they are rich.
‘Putting eggs into many baskets’ to disperse risk is the Number 1 principle for wealthy people who want to preserve and develop their assets. In Vietnam, the number of ‘baskets’ is still modest compared with foreign markets.
Under current laws, financial institutions and banks cannot build up cross-border financial and investment products. In other countries, investors may find it easy to make outward investments, but not in Vietnam.
