THE WEALTH management arm of Security Bank Corp. is aiming to reach P600 billion in assets under management (AUM) by the end of this year, backed by strong customer growth.
“We ended last year roughly at around P560 billion in terms of AUM, and right now we’re probably on track to get closer to around P600 billion by the end of the year. We still have one quarter to go, two-and-a-half months to go, so we’re really trying to drive that business hard to be able to get closer to around P600 billion,” Security Bank Rene Alan M. Aguirre told reporters on the sidelines of an event on Thursday.
Over the past year, Security Bank Wealth has seen the number of its customers double or triple, along with transactions that involve more medium- to long-term investments, he said.
“We’re trying to aggressively acquire more of these customers in this demographic. We have a network roughly of around 400 branches. At the same time, we have a team of roughly around 55 wealth relationship managers that acquire these customers, bring them on board, hopefully with a compelling offering to get started,” Mr. Aguirre said.
While the segment’s average demographic is around 55 years old, Mr. Aguirre said they are getting more customers in the late 30s to 40s and outside of central business districts (CBDs).
“I think more and more recently, customers in that demographic are looking for more comprehensive wealth management solutions where they could be more guided in terms of how to grow, preserve, and protect their wealth. And we’re seeing this not just in the CBDs. Basically, we are seeing good growth in the central zone area, even in the VisMin (Visayas and Mindanao) areas, where we are able to acquire more in that demographic,” Mr. Aguirre said.
Customer onboarding is mainly driven by more competitive rates, simple and short-term money market placements, or current or savings account with promos, he said, adding that Security Bank Wealth helps their affluent customers diversify their portfolios depending on their personal needs.
“Essentially, when you talk about wealth management, the intention really is to match the need with a solution that fits that particular need. When you talk about this generation of wealth customers that we’re seeing, and even the Boomers, as we’d call them, a lot of them are focused on just the conservative type of investments,” Mr. Aguirre said.
“Obviously, suitability becomes a very important part of that discussion in terms of their risk profile, their risk tolerance.”
Meanwhile, the increase in younger generation wealth clients is being driven by wealth transfer from older generations, which is also being met by the bank through its legacy planning products.
“For example, from the Boomers even to the more senior Gen Xs, they’re starting to get the next generation involved who are generally in that age spectrum. Essentially, when we talk to them, the children usually get involved. Usually, they’re getting involved in the business already at that age, but they’re also getting involved in the money management and the finances of the family. Sometimes, the decisions will come from them,” Mr. Aguirre said.
“In terms of the more senior generation, what we’re starting to see is that they’re starting to pass on the wealth already to the next generation — not just from the side of running their family businesses, but also in terms of how they manage their money. Sometimes, they will create their own relationships already with the bank. Essentially, that’s part of our strategy also, to make sure that we capture that generation.”
Meanwhile, market volatility has caused investment demand to shift from equities to fixed income, save for high-dividend Philippine equity asset classes, the official noted.
“The Philippine stock market has largely been challenged for the past few years. For many of our clients, we’re seeing them go to Philippine assets, largely for fixed income,” he said.
“What I can say is that over the past year at least, we’ve seen more of our customers diversify away from the short-term money market instruments — let’s say the ‘swamp’ investments or these short-term placements — and more into medium- to longer-term investment opportunities.”
As part of efforts to expand its offerings for its affluent clients, Security Bank Wealth partnered with St. Luke’s Medical Center to provide their customers with concierge healthcare services through the hospital’s Corporate Business Center.
Security Bank Wealth clients have access to appointment assistance, specialist referrals, scheduling support for consultations and diagnostic procedures, executive lounge access, and dedicated guidance during inpatient hospital admissions, as well as preferred rates on select health screening packages.
Security Bank booked a net income of P3.38 billion in the second quarter, up from P3.04 billion last year. This brought its first-half profit to P6.08 billion, rising from P5.86 billion previously. — Aaron Michael C. Sy