7 Key Insights From the 2020 Study on Ultra High Net Worth Individuals

How has the COVID-19 pandemic affected the ultra-wealthy in the Philippines and across the region?
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To be specific, a person who is considered an “ultra-high net worth individual” (UHNWI) needs to have at least $30M of investible assets. At least that’s how local bank Unionbank defines the term. It’s a segment of the population who are movers and shakers, decision-makers and (actual) influencers. They are tycoons, power players, and employers whose actions and fortunes often have a direct link to and impact on the economy and how ordinary people live their lives. 

How these people have been affected by the pandemic is the focus of a study commissioned by Unionbank and its strategic partner Lombard Odier, a leading global wealth and asset manager, as well as four other Lombard Odier Strategic Alliances in the region. More than 150 UHNWIs based in Hong Kong, Indonesia, Japan, Singapore, Taiwan, Thailand and the Philippines participated in the study, which was conducted in 2020 in the midst of the onslaught of the COVID-19 pandemic. The findings are envisioned to hep better understand their thinking on the current business climate, what their impressions are about financial services, and their overall outlook on a post-pandemic world.

During a virtual roundtable held on Thursday, February 4, the findings of the study were revealed by Atty. Arlene Agustin, Unionbank senior vice president and private banking group head; and Vincent Magnenat, limited partner and Asia CEO at Lombard Odier. Agustin said that in 2020, Unionbank reported total assets undermanagement at P40 billion, which is double that of the 2019 figure of less than P20 billion.

“The 2021 target is to bring it up to 25 percent,” Agustin said.


Vincent Magnenat, limited partner and Asia CEO at Lombard Odier and Atty. Arlene Agustin, Unionbank senior vice president and private banking group head

Photo by Unionbank.

Here are 7 key insights from the UHNWI study:

1| Majority of UHNWIs surveyed believe low interest rates will remain

About 78 percent of the UHNWI participants believe that interest rates will remain low and even after the pandemic and could stay low for the next decade.

“With interest rates at such low levels, traditional asset allocation between bonds and equities might be challenged,” Magnenat said.

2| More UHNWIs are looking for advice

Both Unionbank and Lombard Odier said they are used to dealing with sophisticated and experienced investors. About 58 percent of those surveyed said they will most likely choose discretionary mandates when it comes to investments, while 44 opt for a mix of discretionary and advisory mandates.

“The increasing sophistication of demands and the range of quality of financial services has become more important in the context of banking relationships,” Magnenat said. “The crisis is not changing their ways, but they need more guidance from banks." 

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3| An overwhelming majority believe a bank’s digital efforts are important

A whopping 87 percent of participating UHNWIs said that a bank’s degree of digitalization will matter going forward. According to Lombard Odier, this speaks to “UHNWIs’ desire for banks to offer IT-related banking services and new ways of communicating as next steps in the evolution of banking.”

4| Sustainability isn’t just a trend

For 89 percent of surveyed UHNWIs, sustainability isn’t just a buzzword but an important consideration of investing. Sixty-one percent believe that they will take sustainability into consideration moving forward, while about 30 percent of participants still believe that sustainability will generate more returns in the coming years.

“The children of participants are more likely to choose banks based on sustainability,” Magnenat said.

Although 61 percent of participants will take sustainability into account when making investment decisions, 56 percent of the participants who said that they had not yet actively increased the proportion of sustainability factors in their portfolios “are still unsure or do not plan to do so, amid some skepticism and belief that sustainability will not generate superior returns.”

5| There will be more digital interactions, but the human experience is irreplaceable

About 81% of participants think that there will be more digital and less physical human interactions because of the effects of the pandemic. Still, both Magnenat and Agustin said that UHNWIs highlighted the importance of in-person meetings, with “the human experience arguably valued more now than it has ever been.”

“Technology isn’t a magic wand,” Agustin said. “Many participants feel that physical interaction is still important.”


6| Climate change is also a concern

Some 55 percent of UHNWIs said they expect “an acceleration of measures to combat climate change. The main concern among UHNWIs interviewed is whether countries globally will be able to coordinate themselves in their effort to fight climate change.”

7| Family services and succession planning are emerging priorities

Of the UHNWIs surveyed, 42 percent said they have a structured family governance plan in place, while 32 percent of those that do not have a structure said the pandemic has convinced them of putting one in place. 

Highlighting that both Unionbank and Lombard Odier are family businesses, Agustin said that UHNWIs clients understand the value of succession planning and are working on plans for a seamless transition to the next generation. 

Private banking

The findings of the study are presented in four broad categories: technology, investment, sustainability and family services, all of which are themes that have gained the most importance for UHNWIs since the COVID-19 crisis began.

Unionbank said it offers private banking services to clients starting at P10 million. The idea is to target the “new affluent.” 

“More and more we have observed that they are moving to us,” Agustin said when asked about UHNWIs who have established relationships with other banks and financial institutions. “They talk to our local relationship managers, and we are able to offer them assets with higher returns. They also see that we are strong in advisory and in family services. That’s really where our strengths lies, and that attracts UNHWIs. 


“They give good feedback, and very often it starts with that,” she added. “Even the study showed that (the clients), the Philippine participants are happy with us. They are satisfied. And because of that, word-of-mouth really helps. We get more clients that way.”

To download the full UHNWI study, click here.

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Paul John Caña
Associate Editor, Esquire Philippines
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