Assistant Treasurer Chris Bowen gave an address to the Committee for Economic Development of Australia (CEDA) conference in June, pushing Australia's potential to become an Asian financial hub.

"Australia will never be a London or New York, but we can be an Asian financial hub if we make the most of our advantages and get serious about reforming uncompetitive and complex tax and regulatory rules to ensure that Australia becomes a world leader in financial services into the future," Bowen said.

Already the Government has announced plans to overhaul Australia's messy outdated tax system in a bid to shore up the competitiveness of the industry. But for many firms the move into Asia has already begun.

Last year, Macquarie Financial Services struck a joint venture agreement with an established financial service firm in India. The firm is currently in the process of growing a private banking business in Singapore.

Consulting firm Mercer has already restructured its team to capitalise on the growth of sovereign wealth funds in the region, while global insurer MetLife continues to expand in the area.

Queensland-based financial planning business Professional Investment Services now has around 850 advisers in Malaysia, China, Hong Kong and Singapore, with plans to move into Sri Lanka and Taiwan.

Capitalising on our strengths
Australia's wealth management industry has caught the eye of some parts of the world. A think tank in the United States has called on the US Government to mimic Australia's compulsory superannuation.

A Hong Kong-based consultant of Hewitt Associates, Carl Redondo, said recently: "Australia's superannuation is much admired. The associated master trust pension arrangements are efficient, competitive and very exportable."

Australian firms are ready to their expertise to the region and capitalise on its rapidly developing economies and burgeoning middle class.

In May, Mercer reshuffled its Asia-Pacific team, promoting Garry Hawker to the newly-created role of regional director for national funds of Asia-Pacific. Hawker previously led Mercer's investment consulting business in Asia.

The firm recognised the importance of sovereign wealth funds in the region.

While it has already been consulting to such funds, these funds are now stepping up their focus on higher-yielding growth assets and foreign exposure.

"There is now a move towards greater transparency. As these funds finalise the transition of their investments, the key area for these funds will be greater transparency and governance,"Mercer global principal Patricia Pascuzzo says.

The firm advises sovereign wealth funds on a full range of investment consulting services, including manager selection, strategic asset allocation and how to establish a governance framework.

For Macquarie's banking and financial services group, the move into Asia began four years ago.

"The first step of going offshore is to do your research. It took us four years of research and reflection and dedicated people to understand the opportunities available for us. You really need to understand the market before you set up any business offshore," Macquarie Banking head of global investments Matthew Rady says. Finding the right partner
In October, Macquarie announced a joint venture with Indian fund manager Religare Wealth Management.

It took a 50 per cent stake in the firm, giving the bank access to 1215 of Religare's branches in 392 cities and towns.

"India has a fast-growing middle class, however, its wealth management industry is not as developed as Australia's. Macquarie had the capabilities and solutions to meet the needs of India's fast-growing economy," Rady says. 

Joint ventures have also been behind MetLife's growth in the region.

In 2007, MetLife's insurance business in the Asia-Pacific region grew by 10 per cent. The growth was predominantly due to MetLife's bancassurance business; the selling of insurance through a bank.

In India, the firm beefed up its bancassurance business through distribution agreements with Axis Bank and Barclays Bank.

"We have had a lot of experience with joint ventures," MetLife head of Asia Pacific Tracey Perkins says. 

In fact, some of the joint ventures established by the group have evolved into wholly-owned subsidiaries of MetLife.

"In the early 1990s our business in South Korea started as a joint venture. Our presence in Hong Kong also started as a joint venture, but both are now wholly-owned subsidiaries," Perkins says.

Joint ventures could also be the solution to overcoming regulatory hurdles in the region. It was the key advantage behind MetLife's distribution deals in India.

"Winning this business was important for MetLife as regulation in India requires its banks to have only one business partner," Perkins says.

Similarly its joint venture in China with Capital Airports Holding Company was also required under regulation.

But for businesses looking for partners, non-business issues need to be considered if the relationship is to succeed.

Complementary goals and beliefs are imperative to the success of any partnership and crucial when expanding a business offshore, Rady says.

"For us the process to securing a joint venture was a challenge. We spoke to a number of potential partnerships in India who were interested in teaming up with our business," he says.

Like any joint venture, he says it is about selling ideas and therefore a sense of faith and trust must exist between the two entities.
"The cultural fit has to be right," he says.

Perkins says: "Bringing the right competencies together in a partnership allows us to take the business dramatically forward."
 
Different strokes
Like any geographic region, cultures and economies can be vastly different in the Asia-Pacific region.

Firms that have secured a presence in the region recognise growth is not a matter of simply rolling out the same products.

"Success in that region is not about adopting a cookie-cutter approach to product development, distribution and services. You can't just simply roll out the same products across different countries," Rady says.

For Rady this also means joint ventures may not be the answer to every business model in a country.

When seeking to establish a private banking business in Singapore, Macquarie's banking and financial services group decided to simply start from scratch.

"The Macquarie brand was well recognised in the country with a much higher number of high net worth individuals. We decided on our own brand and going it alone in terms of setting up the business," Rady says.

While sovereign wealth funds are a focus for Mercer in the region, pension funds are also evolving, creating opportunities for the consultant.

There is a general trend in Asia towards liberating investment restrictions, thus pension funds are moving towards a higher proportion of growth assets, particularly listed equities, and from domestic assets to more international investments. Pascuzzo notes India in particular has a large and growing retail market.

Consequently in March, Mercer established an implemented consulting business in India, appointing Rashmi Mehrotra as head of the practice.

The practice will provide research on listed equities, opportunistic investments and infrastructure.

More importantly, Pascuzzo notes that for each region specific relationships are also required.

"We have a team with the relevant expertise in each region that has the direct relationships with the respective sovereign and pension funds," she says.

"We recognise that each of these funds now have particular sophisticated needs and so we need to ensure that each investment consultant can leverage intellectual capital from across the globe to best service these clients."

MetLife had to contend with cultural issues when launching its insurance products.

For example, in Australia, investment and insurance products are often sold separately. In Asia, products are sold as a package and this can be due to cultural rather than marketing issues.

"In some Asian countries, the concept of death is a taboo. The concept of life insurance is that you don't get anything in return unless you die. As a result, stand-alone insurance products are not appealing to some of these countries. We look at bundling products that including a savings flavour and therefore tend to more all-encompassing products," Perkins says.

Automatic for the people
Behind the success of any organisation is the success of its people.

Pascuzzo notes Mercer benefits from its global team with on-the-ground teams in each country facilitating ideas and knowledge within the firm.

For Rady the move into India dismissed all the traditional rules behind global expansion.

"You are normally taught to send in your A team when setting up an offshore business. However, how do you compensate your employees with some of the hardships in living in a place like India?" he says.

Our joint venture allowed us to use both highly-skilled locals with members of our Australian team to create a sophisticated team with the right blend of skills and experience," he says.

He admits the labour market in Singapore is tight and it will take some time to recruit the right people.

Nevertheless, Rady says the Singapore office will be pivotal in creating the group's own financial services hub in the region.

For Perkins the key to an organisation's ability to leverage offshore opportunities is in the mix of its people.

"I am a firm believer that difference is important in any orgsanisation. A mixture of people in my team is what makes a truly global organisation successful," she says.

"By having a global footprint, we are able to transport the intellectual talent around the organisation."

Perkins is an Australian who has worked in MetLife offices around the world.

While working overseas, she says she realised the benefits of transferring staff to other offices and countries.

"They bring in skills learned from other markets. You can't get this locally so it makes sense to transport folks from other parts of the organisation and world to help build the business. It's what makes a company successful as a global market participant," she says.