High-net-worth families are not just thinking about new wealth creation but also how their money can help solve some of the world’s problems, according to Terence Chow, Chief Executive Officer, Asia, RBC Wealth Management. He tells A Plus about his various roles at Royal Bank of Canada, and how the COVID-19 pandemic, coupled with the need to adopt new technologies, has led to lasting changes within the wealth management space
Photography by Calvin Sit
Terence Chow, Chief Executive Officer, Asia, RBC Wealth Management, describes coming to work in Hong Kong as feeling like a homecoming. His parents grew up in Hong Kong, and while he had often visited the city for both business and leisure, he had never had the chance to live here.
At the same time, having spent his whole career with Royal Bank of Canada (RBC), he was excited by the opportunity to help grow the business in such a dynamic region. “It felt like coming home for me, and to be able to do it in this role – where I get to lead a business for an organization that helped to raise me and that I feel very passionate about – is great,” he says.
Chow arrived in Hong Kong just before the COVID-19 pandemic struck, and he describes being in the city during this period as a great privilege. “Hong Kong has responded extremely well to this health crisis and the city itself has a lot to offer. Whether it is the ability to disappear to some of the outlying islands, or hike and get out into nature, or visit a beach, or explore different neighbourhoods in Kowloon, just exploring the city – and the culture that goes along with it – has been fantastic.”
From capital markets to wealth management
Chow started his career as a senior business analyst at RBC Capital Markets in Canada, after studying economics at the University of Toronto and then obtaining a Master of Business Administration at Ivey Business School, Western University. Over the course of 10 years, he gradually took on more responsibility, focusing on special projects, and developing new solutions and products to fill out RBC’s operational capacities. His role took him from Toronto to New York, and also involved visits to Sydney and Hong Kong. He was working in New York when the global financial crisis hit and clearly remembers the weekend Lehman Brothers collapsed. “It was such a turbulent time and there were so many things to be learned, but being able to grow a franchise and business during this period was quite rewarding,” he says.
Chow explains that through prudent risk management, RBC was able to continue to expand its business within capital markets and investment banking, and it became a primary dealer of United States treasuries. “This catapulted us from being a mid-sized boutique investment bank to a top 10 global investment bank,” he says. During the first decade of his career, Chow managed smaller teams working on special projects, such as setting up the infrastructure and reporting systems for RBC to deal in U.S. treasuries, and working as part of a focused project team to restructure the bank’s proprietary trading business. One thing that was absent from his experience was leading day-to-day operations of a larger group. This opportunity arose in 2015, when he moved from RBC Capital Markets to RBC Wealth Management, and he went from managing 15 people to around 600. “That was a transition! It really taught me how to lead a large number of people, how to understand the different moving parts, and learn that my role was not to teach people how to do their jobs – because they are professionals with experience – but to really focus the energy, harness that experience and help guide the team towards a common goal,” he says.
In early 2019, Chow had the opportunity to move to Singapore and become chief operating officer for Asia. Soon afterwards, his predecessor retired, and in November of that year, he was promoted to his current role of CEO, Asia, at RBC Wealth Management.
A people person
Chow describes his role as having three main elements, one of which involves marketing RBC in the region. He points out that despite being the 10th or 11th largest bank in the world by market capitalization, depending on the day, RBC is still not particularly well known in Asia. “We haven’t done enough work to really amplify our story as a wealth manager. Globally, we have just shy of US$1 trillion of assets under administration and US$700 billion of assets under management,” he says. “These are big numbers that Asia may not necessarily be aware of, so part of my job is to tell that story and help this part of the world really understand and appreciate the strength of the RBC brand.”
The second part of his role involves leading his team, and providing the support and help needed to keep everyone positive and motivated to drive growth. “The past 18 months have been challenging for everyone, so making sure the team is healthy – physically and mentally – has been a key priority,” he says.
The third aspect focuses on clients. “It involves getting to know them and working with them to understand what their priorities and objectives are, and then figuring out how to bring the best of RBC to that experience, so that our clients can realize their hopes and dreams,” he says. It is this aspect of the job that Chow enjoys the most. He describes it as being much more personal than working in the institutional space, as he has the chance to really interact with individuals and families to help them achieve their goals and the legacy they want to leave. “Getting a chance to really be part of that process and earn their trust to help them through their journey is extremely rewarding,” he says.
Having the opportunity to work directly with private clients attracted Chow to move into the wealth management space. And he adds that both the responsibility and reward feel much greater when dealing with people’s personal wealth.
It involves getting to know them and working with them to understand what their priorities and objectives are, and then figuring out how to bring the best of RBC to that experience, so that our clients can realize their hopes and dreams.
As Chief Executive Officer, Asia, RBC Wealth Management, Terence Chow is responsible for marketing Royal Bank of Canada in the region, leading his team and working with clients to understand their individual needs.
Asia’s global families
Chow describes RBC’s core client base as Asia’s global families – namely families where the parents or grandparents may be from Hong Kong or somewhere else in Asia – but have a natural nexus to Canada, the U.S and the United Kingdom. This, Chow explains, is the result of children or grandchildren who have been educated abroad and have put down roots in these countries. “For these families, there are cross-border and cross-jurisdictional complexities for estate planning, tax residency and wealth transfer. As the world continues to become more global, and families are positioned in different parts of the world, the trend will be for banks to step up and help families navigate these complexities,” Chow says. He adds that the COVID-19 pandemic has caused many of these families to reunite and be more grounded, as they can no longer travel as easily and frequently as they did before. “The situation has led to more open and transparent conversations about wealth and mortality that have previously been a bit taboo, and an active desire to plan more holistically for wealth transfer,” he says.
RBC sees the Greater Bay Area (GBA), with its population of more than 70 million people and schemes such as Wealth Management Connect (see thought leadership here for more information) that enable Hong Kong-based banks to serve customers in the region, as a significant opportunity. “It really creates more fluidity for families in the GBA to tap into services and banks that are operating out of Hong Kong, such as ourselves. “Canada, the U.S. and the U.K. are still destinations of choice for education, business expansion and investment. As we are strong in each of these locations, I think we have a very meaningful opportunity to grow our business within the GBA,” Chow says. He adds that Hong Kong is not only a great place to be based in terms of being a gateway to Mainland China, but it is also a gateway to servicing the second and third generation of wealthy families across Asia as well. “As an economic region, the GBA generates around US$1.7 trillion of gross domestic product – that’s about the same as Canada as an entire country, so the size is enormous. Not to mention the amount of innovation, sustainable technology startups, the building of smart cities, and the opportunities to learn and leverage are endless.”
A key focus for RBC is embracing technology to enhance the client experience, particularly as the first generation of wealth creators in Asia are now approaching an age where they are thinking about wealth transfer and succession planning. “The next generation is younger, and they are much more digitally enabled. They are much more fluent in mobile apps, so digital enablement is an obvious place where banks like us have to be spending time, energy and money to invest to upgrade our capabilities,” Chow says. In practice, this means providing clients with apps that enable them to easily access the information they need and to be able to carry out the transactions they want to do.
RBC is also harnessing robotic process automation and optical character recognition to streamline the account opening and onboarding process. Chow points out that during the pandemic, RBC’s ability to leverage digital channels and move to a work-from-home environment – while still being able to connect with clients and colleagues globally – was extremely important in servicing clients. Going forward, Chow does not expect technology, such as robo-advisors, to ever completely replace people, particularly in the high-net-worth and ultra-high-net-worth space, where clients’ needs tend to be more complex.
Instead, he thinks the winners will be the banks that are quickest to reach the middle space between a fully digital experience with robo-advisors at one end, and the traditional private banking full-service “white glove” model at the other end. “I see it as a race to the middle to become increasingly more digitally enabled, but fundamentally still be a relationship bank. Using tools like artificial intelligence, to comb the world for news and sentiments, and using algorithms to help construct different portfolios, will enable us to deliver the real value-added advice that our clients want,” he says. RBC is not only focusing on technology to enhance the customer experience, Chow adds, but it is also looking at it as part of its investment strategy.
Chow explains that focusing on environmental, social and governance alone no longer gives companies a competitive advantage. Instead, RBC thinks it is the companies that are actively investing in businesses that combine sustainability and technology that will have the edge. It looks at five key areas, namely food tech and agriculture tech, which aim to improve food development from farm to plate; green tech, which focuses on environmental-friendly technology to improve supply chains or generate clean energy; health tech to solve health problems; and fintech to bring financial services solutions to populations that remain unbanked, and smart cities, that looks to improve the wellbeing of citizens. “Through these five pillars, there are lots of companies that are actively working towards creating services and solutions that will solve problems, and we believe these are the companies that are going to provide very good long-term returns for investors,” he says.
Chow adds that the pandemic has accelerated clients’ interest in sustainability as part of their investment strategy. “COVID has caused clients to be much more introspective and philosophical about life in general. How did this virus come about? Was there something that could have be done to avoid this? Are there other threats that we should be thinking about or risks that need to be mitigated? As wealth transfers to the next generation, our clients are actively thinking about these issues and there’s an increased desire to moving towards wealth stewardship, and how they channel their wealth to causes or investment opportunities that help to solve these problems, rather than just thinking about wealth creation. It is a massive shift in mindset,” he says.
Every client’s story is going to be different. Understanding their finances and their businesses is a critical component, sure, but it’s also about getting to know them as individuals, as families.
Chow, who was raised in Toronto, Canada, arrived in Hong Kong in early 2020. He studied economics at the University of Toronto before completing his MBA with the Ivey School of Business, and has spent his whole career at RBC. He has worked in cities such as Toronto, New York, Sydney, Singapore and Hong Kong.
A solid foundation
Chow thinks having an accounting background provides a solid foundation for any career, especially in wealth management. “You understand how companies work and how profit is generated. You have your finger on the pulse of the numbers, which is a good discipline and structure to have because high-net-worth and ultra-high-net-worth families and their personal wealth can be very similar to that of Fortune 500 companies.” He says having an accounting background also helps with the understanding and insight wealth managers need to help families plan and budget to achieve their objectives. But accounting is more than just understanding the numbers, Chow says: “Accountants are very thoughtful about business in general. They understand the strategic direction of the companies they are auditing or managing finances and they have a front row seat to see how senior management are thinking about various business challenges and opportunities. Furthermore, accountants can be also key decision makers in shaping their respective companies’ futures. These are all great disciplines to have if you want to pursue a career in wealth management – particularly in Asia where clients are also often business owners and entrepreneurs,” he says.
But he adds that accountants interested in working in wealth management will also need to go beyond the technicalities of accounting and be prepared to really get to know their clients, and what motives them. “Every client’s story is going to be different. Understanding their finances and their businesses is a critical component, sure, but it’s also about getting to know them as individuals, as families. It’s about really building that trust and relationship and to earn the right to be that client’s first choice. It’s personal.”
Royal Bank of Canada is one of the top 11 largest banks in the world by market capitalization. It has nearly US$1 trillion of assets under administration and US$700 billion of assets under management.