TMB's open architecture model woos retail clients
TMB BANK has embraced an open-architecture model for its retail clients, allowing them to diversify their investments beyond the bank's own TMB Asset Management arm.
TMB is the first Thai bank to adopt this model, as its retail customers can deal with outside fund managers Aberdeen Asset Management, CIMB-Principal Asset Management and UOB Asset Management (Thailand).
Marie Ramlie, head of retail products, said that for more than a year now the bank had seen a trend of retail customers wanting to diversify investments, and adopting an open-architecture platform could help them achieve that.
“We think it is a good time for the bank to provide open architecture to customers,” she said. Thailand is an ageing society, so retail clients should make sure they have sufficient wealth for their families when they retire.
TMB Bank targets 50-per-cent growth in assets under management (AUM) to Bt240 billion this year, a more aggressive rate than last year’s 36-per-cent expansion to Bt154 billion.
The bank is strongly promoting its open-architecture platform to customers in the upper-to-mid-income category, as these people are expected to need long-term investments.
However, Ramlie acknowledged that with today’s fast-paced lifestyles and rapid changes in global markets, it was not easy to get retail customers to wait more than five years to see a return on investment. Therefore, the bank has to ensure that its customers see some return earlier to retain their confidence.
She said TMB was also encouraging retail customers invest in non-money-market funds as these are long-term products, and the bank earned higher fees from such funds.
She added that TMB had differentiated itself from competitors by focusing on the quality of asset classes and sustainable growth of AUM and returns to customers, thanks to the open-architecture platform.
Non-money-market funds enable clients to invest in a range of assets including bonds and equities, so the bank has to follow the movement of these assets and its customers’ portfolios as such assets are relatively volatile. Managing such assets is more challenging than those in the money market, which is why the fees are higher.
The bank says it is talking with three outside fund managers to cater to its customers’ needs more thoroughly. The results of these talks should be known this year.
