Dennise Williams, Staff Reporter
David P Wan, head of Victoria Mutual Wealth Management. - JUNIOR DOWIE/STAFF PHOTOGRAPHER
TO DIFFERENTIATE themselves in the market place, Victoria Mutual Wealth Management (VMWM) developed a three-pronged strategy: They aim to leverage the brand name of the parent company, Victoria Mutual Building Society (VMBS), give entitlements to clients and reach out to the Jamaican diaspora.
Founded in 1994, the company was first known as Alpha Financial Services. As a wholly owned subsidiary of the VMBS, it was re-christened as VMWM to signal its thrust at providing VMBS clients an alternative to just saving with a building society.
And leading the charge of VMWM is 20-year banking veteran, David Wan. In the 1990s he was a director of FINSAC, the government's financial sector rescue vehicle. Mr. Wan also worked at Citibank in Miami for "many years, in the 1980s and early 1990s."
He has been with VMBS for four years, headed VMWM for the last three.
INCREASED AFTER-TAX PROFIT
Its numbers seem to be headed in the right direction as the profit after tax in 2004 was $70 million compared to the 2003 figure of $37 million. Return on equity for 2004 was 31 per cent compared to 27 per cent in 2003. And VMWM contributed 12 per cent to the net profit after tax of VMBS for the year ending 2004.
And in an effort to secure its place in the minds of the investing public, VMWM has embarked on a new ad campaign and marketing thrust an acknowledgement that there is fierce competition in the marketplace for wealth management services.
Mr. Wan sat down with Wednesday Business to outline his company's strategies to differentiate themselves.
FULL RANGE OF FINANCIAL SERVICES
"We offer a full range of financial services that is unique from the other wealth management firm. First, if you are a VMBS customer, we allow you to purchase stocks commission free. Alternatively, if you don't want to invest in stocks, then we have money market instruments. Also we can steer you into the real estate market with our connection with Victoria Mutual Property Services.
And because we have overseas linkages, we can even direct you into US stocks.
"Our corporate strategy is to open doors and fulfil needs. Essentially, our clients can get discounted services within the group," he said. "If you need a mortgage, I can put you onto Victoria Mutual Building Society, and you won't have to be a saver with them to qualify for a mortgage."
A 15 per cent discount on appraisals from Victoria Mutual Property Service. For auto insurance, a 10 per cent discount can be secured from Victoria Mutual Insurance Company for his clients.
"Part of our strategy is to give entitlements to our customers," Mr. Wan said.
With 127 years of experience under its belt, he explains that many in the Diaspora have warm memories of VMBS. Interestingly, over 20 per cent of VMBS clients reside overseas and so this gives Mr. Wan a ready market to tap into.
"Many Jamaicans abroad tell me how they remember opening passbook accounts with their parents when they were three years old. And so when I go abroad to speak to Jamaicans about investing back home and I tell them that I am with Victoria Mutual, people immediately start writing cheques."
With other companies, things are not that easy, he said. "For Jamaicans who have left for ten years or more, they are just not familiar with the newer financial companies that are around."
Of course, even with the greatest strategy in the world, unless one understands the market, you cannot respond to its cues.
And one of the most pervasive cues is falling interest rates. More specifically, how investors are reacting to falling interest rates.
Mr. Wan believes that a shift in thinking is necessary for investors to get ahead in this lower interest rate regime.
EDUCATION IS THE KEY
"Jamaicans got drunk on high interest rates. Jamaicans tend to want investments that they understand that are short term and beat inflation. But in the coming years, you won't find money market investments that offer that. For some, they have a tough time accepting that."
And how does one move forward in spite of lower interest rates? Mr. Wan says, "Education is the key. Investors have to find an investment plan and contribute to it on a regular basis. It is amazing how a steady investment grows over the years - it is the power of compounding. And that is what we sit down with our clients and explain."
