Strategy Development

Strategy Development – European conglomerate develops onshore distribution network

A European banking consortium recognized demand onshore and developed its own financial advisory capability

Although the mainland market is product rich, access to customers for many asset managers remains highly limited. Only a handful of distributors are able to generate large volumes of fundraising, and the high costs for limited access are felt by customers in the form of higher fees. Recognizing the scale of the opportunity available, a major European banking consortium made plans to create its own financial advisory arm within China to sell directly to Chinese investors, bypassing expensive domestic distributors. By developing international-standard servicing and support practices, the consortium was able to raise the bar for domestic investors’ expectations for after-sales servicing for financial products.

Opportunity

With only a handful of distributors in China, and relatively high fees that are charged when selling to customers, the potential to offer a much more diverse range of sale options for investors is clear. With rapidly growing investable wealth, Chinese clients remain under-serviced by domestic providers. Recognizing this, the client approached Z-Ben for assistance in structuring both their market entry and financial advisory operation.

Solution

Z-Ben’s internal and proprietary databases were used to develop a comprehensive strategic framework for the client. This allowed the client to set up an initial operation and expand geographically to cover a much larger number of under-serviced Chinese investors. Z-Ben worked closely with the client to ensure that costs for legal and operational set-up were minimized, leaving the maximum amount of capital preserved to improve the service quality of their advisory operation.

Result

The client has become one of the first foreign firms to offer international-level servicing for financial products on the Mainland. With first-mover advantage and aggressive expansion plans, the firm is positioned to capture market share aggressively from high-fee, limited-service domestic competitors.

Strategy Development – Supporting regional product strategy for an Asian manager

A large Asian manager targeted Chinese investors with existing strategies while adding to its product range

A large Asian manager, and a leader in its home market for a large variety of funds, sought to diversity its asset base by raising funds from Chinese investors. The manager planned to use existing products as well as develop investment vehicles domiciled within the Mainland, both for domestic Chinese investors as well as for sale back to their home market. Z-Ben Advisors was engaged to develop a market entry strategy that would allow for greatest flexibility of operations whilst maximizing the chances for success. Z-Ben also developed an analytical framework to determine what types of product would be met with the most demand from Chinese investors, and how to best support these products with investor education.

Opportunity

With their home market reaching saturation point and offering limited opportunities for growth, the client – the large regional asset management subsidiary of a financial conglomerate – sought to bring their expertise in specialized products to Mainland Chinese investors, who are typically over-allocated to cash and real estate, and lack diversified well allocated portfolios.

Solution

Historic ownership restrictions have meant that many foreign asset managers have been reluctant to approach the Mainland market, given the need to establish a joint venture requiring a significant amount of their brand and intellectual property to be invested into the entity. Z-Ben Advisors helped develop a framework allowing the regional manager to retain full operational control, whilst also having a large degree of operational flexibility in the types of products they were able to provide and platforms they could use.

Result

During the course of the engagement, we examined both potential partners as well as preparing application materials for the set-up of the client’s own proprietary operations. Some priority was also placed on the future expansion of the operation, particularly retaining personnel necessary to see the initiative through to completion. Simultaneously the client began to develop a suite of products to be sold back into its home market, offering its existing investor base the opportunity to buy into Chinese fundamental growth and further diversify their portfolios.

Other areas of consulting expertise: