Client entertainment for front office finance professionals in Asia requires stamina – long nights, hard drinking and a strong stomach for rich food. The upside is lavish diners at top restaurants, VIP tickets to the Formula One, or even golfing trips to five-star resorts in Thailand, providing they meet with banks’ internal compliance rules.
There are many cultural implications that need to be understood to prevent causing loss of face to Asian clients and hosts – the most common of which can involve serious alcohol consumption.
One recruitment consultant based in Hong Kong reports that his Chinese banker clients maintain that entertaining for business can be punishing on the liver. “Even though it is not necessarily a regular occurrence, it is common to drink until drunk when you are entertaining clients.”
Adam Jeffes, manager, investment banking and capital markets, Morgan McKinley Hong Kong, says that whereas ‘having your limits’ is generally accepted in Western cultures as a reason for passing on an offer of a drink, in China, or other parts of North Asia, such as Korea, refusing a drink can have serious implications. “It is more acceptable to take the drink and be drunk, as this is accepted as an inevitable consequence. And your host will be happy that you are well entertained.”
One Hong Kong-based private banker, who wished not to be named, says in his sector it is usually more about fine dining than boozing. He says he is sometimes expected to entertain clients two or three nights per week. This involves dinner followed by a few drinks at the bar, but most of the time, the proceedings are over by midnight.
Alcohol consumption usually involves fine wines or champagne over dinner – typically at a top Western or Asian restaurant. He names the Hong Kong restaurants the Mandarin Oriental, Chesa’s at the Pensinsula, Amigo at Causeway Bay, the China Club or a bistro in the Mid-level area as some of the popular venues.
In asset management, corporate banking, and sales and trading, the emphasis is usually on team entertainment, where drinks get-togethers and trips away are more the norm.
One business manager at an investment bank, who also asked to remain anonymous, spoke of weekends away in places like Thailand's famous Phuket island, playing golf and drinking. He says often it is simply an excuse for the client to ‘party’, as in many cases the deal has already been signed.
Banking recruiters polled said that their clients report that the cost of a night out with front office clients can vary from a few thousand HK dollars for informal beers through to several hundred thousand HK dollars for an all-expenses paid trip to watch the Grand Prix in Singapore.
But bankers also have to be mindful of client entertaining not falling foul of local anti-bribery regulations. Deutsche Bank and Goldman Sachs are both feeling the heat currently from an investigation by Japan’s Securities and Exchange Surveillance Commission into ‘excessive entertainment’ of pension fund executives, according to a Reuters report, which says that other investment banks might also come under scrutiny in the probe.