Excerpts of WMI Chairman Mr Ng Kok Song's speech at WMI Connection 2011

On October 27, 2011, WMI Founder Chairman, Mr Ng Kok Song delivered the opening speech at our inaugural WMI Connection. The following are excerpts of his speech:

On the parallels between the shortage in talent in the wealth management industry today and that of the foreign exchange industry in the seventies

Over the last eight years, we’ve counted that over 3,500 people have completed our programmes and conferences. This was far more than we had expected when we started eight years ago. And tonight’s celebration brought me back to the very early days when I started my career at the MAS.

I’d worked for 15 years at the MAS; and now I’ve worked 25 years at the GIC. And I remember that in the late 1970s, we had the challenge of building the foreign exchange market in Singapore. And the same challenges – the same personnel challenges that we then faced – are with us today but in a new industry: the wealth management industry.

[Then] there was a dire shortage of foreign exchange dealers. The banks coming to town were complaining that they would like to build their treasury operations but there were no dealers. So my colleagues and I at the MAS started what we called a “Foreign Exchange Apprenticeship Scheme” to systematically train young, foreign exchange traders. And I think without that we probably would not be in the situation where Singapore is to-date, probably the fourth or the fifth-largest foreign exchange trading centre in the world.

On how talent shortages in GIC and Temasek inspired the founding of WMI

The founding of WMI came about one day in 2003 when Madam Ho Ching of Temasek and I were discussing the challenge of building up our investment management personnel capability. I shared with Ho Ching that if GIC and Temasek were short of talent and expertise, Singapore’s aspiration to be a wealth management hub would run into problems unless we made a concerted attempt to expand the pool of talent and expertise.

[Ho Ching] said, “Very good, Temasek Holdings is very happy to provide the seed capital and we’ll give you all the personnel and logistical support to start the Wealth Management Institute – provided you agree to be the Chairman of the Institute.”

On the support WMI’s partners have given

It has given me considerable satisfaction to see what we’ve been able to accomplish in the last eight years. But honestly, this would not have been possible but for the fact that we have received such generous support from so many of you individually and from the institutions that you represent.

First of all, our university partner, the Singapore Management University; and our many industry partners. And also the many individuals – our teachers and instructors – who [have] devoted considerable time and effort to develop and implement our training programmes. This is one of Singapore’s comparative advantages, as we go about this business of building the economy, in particular, the financial services industry: that the public sector and the industry can work together on a joint initiative like this to address the needs of the industry. And I think many countries are envious that we can do something like this in a very short time and make it work.

So I want to thank all of you here tonight who have helped us at GIC and Temasek to convert the whole concept of WMI to reality.

On raising the levels of competence, trust and care in wealth management

Looking ahead, the prospects are good for the continued growth of the wealth management industry, even as the global economy faces the headwinds of debt deleveraging in the developed economies. Even if global economic growth slows down to subpar levels of 3 – 4 per cent, the emerging economies, particularly in Asia, will grow at higher rates and hence wealth creation will continue unabated.

But wealth advisors will have to raise their performance to higher levels of competence, trust and care. Investment returns are likely to be more modest than in the past and subject to greater risks, and this environment will pose challenges to those entrusted with the preservation and enhancement of wealth.

For the graduating students who recently entered the industry, my advice to you is to think long-term about your careers and to constantly remember the critical factors for long-term success, which are: competence, trust and care.

On competence: In the financial world as complex as we have, and in an economic environment that is so challenging, the wealth management advisory job or a fund management job is not a job from nine to five. I think it is an all-consuming challenge for you not only to do your homework to read up as widely as you can, to talk to people so that you are constantly able to verify on the ground what you read. I myself find that I’ve hardly any time to really catch up with all the reading that I have to cover in order to make sense with my colleagues at the GIC. So every night, before I go to bed, I set aside at least one-and-a-half hours simply to go through all the materials that I ought to read in order to stay in touch with what’s happening.

On trust: I think the second-most important quality – perhaps not second, but equally important – is this question of trust. I think there is a crisis of trust and confidence in the financial world. That at the end of the day it is individuals, not institutions; it is individuals – the leaders, as well as the people who work for them – who are responsible for building industries and services that the clients can trust. So trust is about taking a long-term view. Trust is about putting the emphasis on a relationship rather than on transactions. And always thinking: my business can only grow if my clients grow.

On care: So, “competence” and “trust”, and finally “care”. “Care” in the sense that we are now operating in a very challenging regulatory environment; very complex, the tax issues. Investors [are] coming from all over the world from different tax jurisdictions, and therefore, for you to be able to do your business properly, it requires a very high standard of care.

On the MAS’s role in promoting the growth of financial services

I’d like to [thank] the Monetary Authority of Singapore for encouraging and supporting the work of WMI. We are very fortunate to have a central bank and a regulatory authority that has successfully promoted and developed the growth of financial services while maintaining the highest standards of regulation and supervision.

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