Help, I'm Rich!. Stoute Kees

has been further invigorated since he founded Sonam, a private banking training and consultancy firm, culminating in this book.

      I recommend this book to every rich individual who needs help managing and organizing his or her wealth, but whose skepticism toward the value-adding potential of private banks forms an obstacle to seeking professional advice. As it sets a benchmark for the private banking industry in a way, this book also deserves a position on the shelf of highly recommended books for private banking professionals.

Michael StanhopeFounder and Chief Executive OfficerHubbisJune 2014

      Acknowledgments

      The idea for this book was born during one of the wealth management courses that I conducted for children of clients of a private bank. Each of them, ranging in age between 19 and 27 years old, is destined to lead a wealthy life. This course made me realize one important lesson: Thanks to the basic knowledge these children gained about wealth management and, as a consequence, the higher level of appreciation for the potential added value of a private bank, they will in future be able to extract maximum value from the relationship with their private bankers.

      True private banking is not about selling financial products to the rich; it is about addressing concerns and solving wealth-related problems. That is precisely what makes private banking such a fulfilling profession. With the current levels of skepticism toward the financial industry, it is more important than ever to emphasize this message: Private banks add real value. I am not saying this out of sympathy with the private banks, but because I believe that ignoring this message may lead to missing out on experiencing this added value for the wrong reason (i.e., ignorance).

      As I said, to really benefit from a relationship with a private bank it is important to obtain a basic level of knowledge about private banking. That is the premise behind the wealth management courses for the next generation wealthy that I deliver and that is the premise behind this book. As such this book intends to serve as a compass to value-adding private banking, simply by enhancing the level of knowledge to serve as foundation upon which a healthy and enjoyable relationship with a private bank may develop.

      This book would not have been possible without the help of many individuals. First, I would like to thank my wife, Priscilla Teoh, who not only supported and encouraged me throughout the entire process, but also designed the concept of the cover of this book. Second, I'd like to thank my brother, Marco Stoute, for adding the light touch to the book in the form of cartoons. Third, I am grateful to Hubbis, and then in particular to Michael Stanhope and Andrew Crooke, for their invaluable input and support. Furthermore, I would like to express my gratitude toward the various Wiley professionals who have guided me throughout the process, ultimately leading to the production and distribution of this book. And obviously I wish to thank the industry specialists and friends who in one way or another contributed to the content of this book: Gosse Bosma, Mark Bouw, Bart Deconinck, Hugh Ellerton, John Grist, Eduard Holtz, Sander Maatman, Hélène Van Meerbeek, Yorgos Mersinis, Harmen Overdijk, Pieter van Putten, Peter de Ruijter, and Jeroen Stuart. Even though they have been a tremendous help, it should be stressed that any errors in the text are mine. Finally, a big thank-you to my children, Carijn, Costijn, and Thijn, for allowing me to spend a large portion of what would normally have been “their time” on producing this book.

      Kees Stoute

      About the Author

      Cornelis Johannes (“Kees”) Stoute (Westbroek, Netherlands) is the Director of Sonam Pte. Ltd., which he established in 2012, focusing on private banking training and consultancy. Prior to that, he was the Managing Director of EFG Bank in South East Asia, which is the Swiss private banking subsidiary of EFG International, one of the larger pure-play private banking groups in Switzerland. Kees has a distinguished career spanning the academic, IT and operations, and private banking sectors, and has been based in Asia for almost 19 years, of which most of the time has been spent in Singapore. In 2011, he became one of the first in Singapore to be certified by the regulator in Singapore (IBF) as Financial Industry Certified Professional (FICP Role Model 6) and the inaugural winner of the Hubbis Recognition of Excellence in Asian Wealth Management Award in 2012.

      Hubbis (Hong Kong) specializes in providing market practitioners in Asian Wealth Management with online content and training. The company provides various content, events, and consulting services to private banks, wealth management firms, product providers, and industry vendors. Their website, Hubbis.com, which has more than 30,000 subscribers, is a highly functional and relevant online content portal for anyone who wants to become successful in Asian wealth management. The site is mainly focused on developing people skills, product knowledge, and understanding of the business of wealth management in Asia.

      Part One

      INTRODUCTION

      Help, I’m Rich! You might claim that this title does not seem to make much sense. Having money means being more independent. Being more independent means that you don’t need to rely on others. So why send such an SOS to the world when you are rich?

      As many rich individuals can testify, being rich comes with challenges – challenges that are very much related to and often caused by the very fact that you are rich. As most of these challenges are not unique, it makes a lot of sense to benefit from the good and bad experiences of other people who are in a similar situation.

      Private banking is the industry that collates these experiences and as such has become specialized in helping the rich to address these many typically wealth-related challenges and concerns. However, for this industry to be able to deliver its value-adding potential, there has to be a firm trust base, and that is precisely what seems to be lacking to a large extent.

      Apart from highlighting why and how private banks should add value to the life of the rich, in this introductory part of the book we elaborate on trust as well as on ways to develop trust. If you understand our view on how trust in the private banking industry can be developed, you also understand why this book has been written.

      Chapter 1

      Toward a Trusted and Value-Adding Private Banking Industry

      Client skepticism toward the financial sector has reached an all-time high, while morale in the private banking industry has reached an all-time low. That has made it more difficult than ever for the private banking industry to offer a truly value-adding service.

      As the rich are supposed to be the main beneficiaries of the impressive knowledge and professionalism in the industry, it is of the utmost importance that faith in the industry be restored quickly.

      Regulators and banks are working hard to do their part to increase credibility. However, clients also need to play an important role as they stand to gain the most from a well-respected, professionally functioning private banking industry. By proactively increasing their knowledge of the typical private banking service offering, they will understand much better what to expect and therefore will be better prepared to deal with a private bank in such a manner that they can get the most out of the relationship.

      The areas of expertise where private banks typically add value are:

      ● Investments

      ● Credit

      ● Life insurance

      ● Wealth structuring

      ● Psychology of wealth

      “Only three more levels, and I am done.” Thirteen-year-old Tom is playing his favorite computer game. For the past two months he steadily worked his way up from level 1 to level 22. The game ends when the player successfully completes all 25 levels. Tom is excited. He is so close. None of his friends has yet reached this far. Imagine how cool it would be to reach the last and final level.

      Two weeks later, Tom achieves the impossible. He is now officially a master of the game. With some smart moves and a healthy dose of logical thinking, he has conquered level 25. He feels proud of himself, and experiences a euphoric high.

      Another week later, Tom feels a bit