"Financial Sector Competes to Attract VVIPs Worth Over 10 Billion Won"

by Yoo Jaehoon

Published 02 Mar.2022 11:15(KST)

Launching Independent Brands... Specialized Services Compete as Demand for Asset Management Increases

"Financial Sector Competes to Attract VVIPs Worth Over 10 Billion Won"

The financial sector is fiercely competing to capture the ultra-high-net-worth individual (UHNWI) market, classified as ‘VVIP’. Typically, banks and securities firms offer private banking (PB) services to clients with financial assets of 300 million to 500 million KRW or more, and provide specialized VIP services to clients with 3 billion to 5 billion KRW or more. Recently, they have begun offering even more differentiated services, such as launching independent brands targeting clients with assets exceeding 10 billion KRW.

According to the financial sector on the 2nd, Shinhan Financial Group recently launched the ‘Shinhan PWM Family Office Center (SFC)’, an asset management service for ultra-high-net-worth individuals and families. Shinhan Bank formed a dedicated family office team and assigned the top private bankers (PBs) among the 150 nationwide PBs to two SFC centers in Seoul (Gangbuk and Gangnam). KB Financial Group is also set to open the country’s largest ‘Apgujeong Flagship PB Center’ in Gangnam, Seoul, this July, unveiling the ‘KB-style Family Office Model’ as well.

Additionally, Hana and Woori Financial Groups are continuously strengthening specialized services for high-net-worth individuals. In particular, each financial company is aiming for differentiation in non-financial services to attract ultra-high-net-worth groups. Shinhan Bank’s PWM Center recently facilitated the 42nd couple marriage. Shinhan Bank offers a couple matching service for PWM Center clients (with deposits of 500 million KRW or more), arranging meetings between clients or their children. Furthermore, Shinhan Bank operates a ‘second-generation school’, a social gathering for clients’ children.

KB Kookmin Bank runs flower lessons, wine and beauty classes for wealthy clients. They also hold a golf day event with 120 premium clients participating. Hana Bank has targeted the art sector, which is of high interest to high-net-worth individuals. Last month, Hana Bank signed a business agreement with Seoul Auction to provide art advisory and specialized purchasing services to clients. They operate a premium brand called ‘Club1’ for clients with financial assets exceeding 3 billion KRW and have formed a dedicated team for celebrities and sports stars. Woori Bank offers hotel accommodation services and regular delivery of side dishes from department stores to wealthy clients. They also provide personalized one-on-one healthcare services tailored to individual characteristics.

The reason domestic financial institutions are strengthening services for ultra-high-net-worth individuals is due to the increase in such clients over the past several years amid a prolonged low-interest-rate and asset price rise trend, as well as the growing demand for asset management tailored to each client’s situation and preferences.