By Gabriel Chen

BACK to basics.

The days of product pushing and convoluted investment strategies for the very wealthy are over for now.

Many private banking customers - sitting on wads of cash amid the financial turmoil - are looking for simpler and easier-to-understand financial products.

Security of principal and diversity of investments are foremost on the minds of ultra-high net-worth families.

Those were key themes driven home by speakers yesterday addressing more than 100 private banking professionals at the 18th annual Private Banker International wealth management summit held at the St Regis Hotel.

If private banks want to excel in a climate in which advice is received warily at best, they must ensure that any advice they give to their clients is fair, objective and in the clients' best interests.

Mr Renato de Guzman, ING Asia Private Bank's chief executive for the Asia-Pacific region, summed up the mood when he said it is 'back to basics'.

Clients do not want hard-to-comprehend instruments to grow their wealth while they are also minimising the use of debt in their investments, at least for now, said the Filipino, who is a Singapore permanent resident.

One reason, understandably, is fear as the market turmoil has whipsawed their investment portfolios.

'What dominates investment is either fear or greed. And right now, it's fear,' explained another speaker, Northern Trust's senior vice-president Kathleen Dugan. 'We hear from our clients who ask us: 'Is our money safe?' Clients have also asked us on many occasions to explain the strength of our balance sheet.'

In this climate, it is time for professional financial advisers to prove their worth, suggested Standard Chartered Private Bank's global head Peter Flavel.

Mr Flavel, speaking on the sidelines of the event, said the wealth management industry needs to understand what clients need, but clients also need to understand what they are purchasing. 'As you can see with some of the products purchased in the mass affluent space, questions were raised on the suitability of those products,' he told The Straits Times.

Private bankers also need to stay close to clients, especially in these difficult times, said Barclays Wealth Asia-Pacific's chief executive Didier von Daeniken.

'Private banking is a people-led and relationship-led business. The importance of building up a long-term relationship, staying close to clients, in good times and especially in bad, cannot be underscored enough,' he said.

Certainly, what makes sound advice has definitely come to the fore amid alleged mis-selling of investment products by relationship managers at some banks.

Earlier in the keynote address, the Monetary Authority of Singapore's executive director, Mr Ng Nam Sin, said that it was easy for financial institutions to keep clients happy in a bull market, when investment returns were high. But in a bear market, this becomes challenging.

'It is crucial clients' needs are well understood and come first, be it their risk appetite or liquidity preferences.'

This article was first published in The Straits Times on November 07, 2008.