Su Shan Tan, appointed head of wealth management by Singapore’s home-grown financial institution, DBS, in 2010, is no stranger to difficult times. While not exactly relishing the current banana skin-laden macro-economic backdrop or the deep crisis which preceded it, the 43-year old local celebrity banker is ready for the challenge of “ramping up” client assets from $35bn to $50bn in the next three years.
Recalling her working relationship, nearly 17 years ago, with the man who famously brought down the English establishment’s favourite bank, Barings, Ms Tan is keen her 2,100 staff should also learn lessons from markets and events, rather than expecting Singapore’s Asian success story to last forever.
“Nick Leeson was my options settlements clerk at Barings. I knew him really well and he was a smart guy,” remembers Ms Tan, whose finance career started in London and encompassed roles heading up pan-Asian operations at banks including Morgan Stanley and Citi before joining the region’s sixth largest wealth management group.
“But then things started to go wrong. That’s how I learned the importance of controls and separation of duties, very clearly and not to take anything for granted, even if you see good returns. With Nick Leeson, I was learning first hand how lack of risk management can really blow up a bank.”
Training for her relationship managers in the bank’s own DBS Institute is “non-negotiable”, states Ms Tan, well-known among staff for her 7.30 am talks on how to engage clients and on the inner workings of structured products. “I want to shortcut my bankers’ learning process. I have been through the pain and want to share my expertise.”
She also regularly paces round the offices and demands spot checks, that relationship managers understand fully the products they are selling. “Sometimes they don’t know how it works, so I ask them: ‘Do you want me to tell you or find out yourself?’ If they find out themselves, they remember forever.”
These issues of training, explaining products and risk management were key to DBS, 28 per cent-owned by Singapore’s sovereign wealth fund Temasek, being chosen as Best Private Bank in Singapore by the 7-strong judging panel in PWM’s Global Private Banking Awards for 2010.
While she sees no excuses for private bankers seriously denting their clients’ positions through greed and ignorance of positions and controls, Ms Tan outlines her vision of leadership through turbulent and depressing times. “When people are getting suicidal, it may just be time to start to look at things positively,” she believes, adding she learned the valuable skills of keeping a team together through the events of the Asian crisis of the late 1990s, and then put them to good use during the global financial crisis 10 years later.
“I learned how to keep a team motivated and how to keep clients onside. If you know they are being honest, they will stay with you,” says Ms Tan, recalling how she went into “battle mode” in her previous role at Morgan Stanley during 2008.
Confirming the Asian finance legend of how she recalled pyjama and slipper-clad junior assistants to head office in the dead of night during September 2008, Ms Tan almost fondly recalls the bunker mentality. “If the general doesn’t tell you what the strategy is, then you will panic. It filters right through to the advisers and assistants.”
But unlike some competitors, she knew about keeping lines of communication open. “I also learned a lot from smart clients,” says Ms Tan, revealing her admiration for many of the older generation of Asian entrepreneurs and families she advises. “They would smile and say to me ‘Su Shan, never waste a crisis or recession.’ That’s what they would tell us.”
These very wealthy, self-made old-timers, she says, lived through several cycles and understand the value of portfolio diversification, contrarianism and buying up cheap, unfancied assets. This is in stark contrast to most Asian mass affluent and high net worth clients, who are reluctant to invest outside their own, high-growth region.
“You need to have diversification, although many clients don’t really value it,” says Ms Tan. “Lots of our clients believe in the concentration of wealth and investing in an asset they know best.”
Diversification is particularly important for second generation clients, she believes. “If you know real estate, your wealth is tied up in the business, but if you have children who are not as smart as you, you need to hedge yourself against market cycles and interest rate, currency and market risk.”
Swimming against the tide of a risk-taking Asian mindset, preserving family fortunes is always at the heart of the DBS portfolio management philosophy. “We are not here to teach clients how to make a second fortune, but how to protect it, hedge it and potentially grow it for the next generation,” believes Ms Tan.
