Cryptocurrencies have traditionally had a sort of underground, anti-establishment feel about them, proclaiming an anarchist mission to create a means of exchange outside government authority. But those days appear to be long over as the wealthy increasingly dip their toes into this emerging asset class. With a more affluent clientele comes demand for more personalised service in stark contrast to the impersonal, “do-it-yourself” culture of online crypto-exchanges.
Stepping into this gap is Hong Kong-based financial services firm Q9 Capital, which is backed by the Henyep Group, an established financial conglomerate founded in 1977. It offers dedicated relationship management alongside a digitally native platform and integrated product set. Clients can enjoy the convenience of online transactions while forging a close personal relationship with dedicated relationship managers based on their individual needs.
Growing demand for digital asset investment services from private wealth investors is expected to see strong demand for such services in a relatively secluded corner of the “crypto” ecosystem. Some private banks are already looking to enter this space. Swiss-based Julius Baer launched a collaboration with crypto-bank SEBA Bank last year, offering clients access to a selection of cryptocurrencies, as well as crypto storage, and transaction solutions.
“With the trading and custody of digital assets, not only are we tapping into a new business area, we are also creating additional investment possibilities for our core business,” says Stephan A Zwahlen, CEO of Swiss private bank Maerki Baumann. He sees this initiative drawing in younger, tech-savvy clientele while providing new sources of return and diversification for private and institutional investors.
To deliver a more seamless user experience, Q9 Capital announced on Jan 21 that it would be launching a full-service digital asset platform for private wealth. Investors can choose to transact large-cap and stable coins either via an online platform, trading desk or directly via a relationship manager. Users enjoy deep liquidity and efficient pricing 24/7 through Q9’s electronic trading solution.
Clients also enjoy a “first-of-its-kind” custody gateway that allows them to decide where and how they want to store their assets. Clients can choose to store their coins from a wide range of technological solutions and national jurisdictions including the US and Hong Kong/Singapore, with distributed offerings available in the US, Singapore and Switzerland. Storage can be changed instantly, mitigating risks arising from “changes in personal or policy circumstances”.
And the coins are not just sitting around gathering dust. Clients can receive up to 7% annual percentage yield on cryptocurrencies like US$-stable coins, Bitcoin, Ethereum and Litecoin — a sight for sore eyes for yield-hungry investors in a low-interest rate environment.
“Launching these products is a major milestone and the next step in the rapid growth of the Q9 platform. We are committed to developing one of the largest and most advanced product sets in the market. We see huge potential for delivering tailored digital asset investment solutions for the private wealth segment,” says James Quinn, managing director of Q9 Capital.
Clients seem satisfied by this service. “We have worked with family offices, wealth management consultants, and corporates and the overall feedback has been that they have really enjoyed the experience, in particular having access to a relationship manager, being able to access a fully integrated product set, and having a simple digital onboarding process,” Quinn adds.
Not all private banks are as enthusiastic about cryptocurrencies, with its volatility raising concerns. “We do not recommend crypto-assets to our clients — we have never recommended them. As long as we do not see a better framework in terms of regulation...we will not change our mind,” says Jean-Louis Nakamura, chief investment officer for Asia at private bank Lombard Odier. Greater regulation, he notes, will stunt the evolution of the asset class anyway.
