Round table participants
Mike Bussey, CEO, Arbuthnot Latham
Humayon Dar, CEO, BMB Islamic
Adrian Gayler, Head of Private Banking, Bank of London and the Middle East
Daniel Gerber, CEO, Julius Baer International, London
Mark McCarron, Chief Investment Officer, SEI Investments
Gavin Rankin, Head of UK Products and services consulting, UBS Wealth Management
Tom Slocock, CEO, Private Wealth Management (UK), Deutsche Bank
Sally Tennant, UK CEO, Lombard Odier
Venky Venkatesh, Director, Private Wealth Management Solutions, Oracle Financial Services
Yuri Bender, Editor in chief, Professional Wealth Management
Portfolio Management
Yuri Bender: Thank you for joining us today. I am looking forward to discussing new business models for wealth management and private banking. Gavin, can I start with you? UBS Wealth Management is the largest global wealth manager, and one that has been in the news of late for many reasons. The investment solutions department of your organisation in Zurich has been busy introducing new types of managed portfolio with a much bigger range of options for investors: home or foreign buyers, core/satellite structures. Do you expect this new thinking in portfolio management to catch on among UK private clients?
Gavin Rankin: The product that you are referring to was released in Switzerland at the beginning of this year, I think in January. It is very similar to a product that we released in the UK back at the beginning of 2007, so it owes a lot of thought to a product that we had already been selling quite successfully here: that is, multi‑asset class UK home buyers, tactical asset allocation, tax efficiency and that sort of thing. We started the business in the UK in 1999, and it took us seven years, really, to get around to having a tax‑efficient onshore discretionary solution for our clients. That is the flagship of what we offer here in the UK, and it has been very successful to date.
One of the important things about the product, looking at trends today versus trends two years ago, is the selection of asset classes used within the product. The product just released in Switzerland is unique on the product shelf there, because it has the flexibility to select solutions without alternative investments. We have been offering that in the UK for two years. While it is being offered similarly in Switzerland, clients have obviously lost a lot of faith in real estate and hedge funds, for example, for various reasons. The product released in Switzerland is an attempt to listen to where trends are evolving and respond to them, and we think that we have been doing that successfully in the UK for the past couple of years. To answer your question, we are slightly ahead of where we are globally.
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Tom Slocock |
Sally Tennant: So what is the defining feature of this product: that you can choose not to have alternatives? That you do not have to have them?
Gavin Rankin: For the product that Yuri was referring to, that is not the defining feature, but it is one of the core selling points. The rest of the solutions in Switzerland, as a default, use alternative asset classes. The product released in Switzerland allows you to select three asset class solutions: equities, fixed income and cash. That is one of a whole variety of different features.
Sally Tennant: Back to basics.
Gavin Rankin: Typically, when a client walks through the door, we go through what we call a risk profiling exercise; I am sure most institutions have exactly the same thing. In that risk profiling exercise, we focus on liquidity as well as tolerance for unregulated investments. Through that fact‑finding exercise, we end up at a solution, over which there is also a qualitative overlay in terms of the dialogue with the client. So there is a road map and a route. It tends typically to be driven by the client, but we still suggest that they use alternative asset classes within their portfolio. That is our best thinking. The more asset classes and the more diverse they are, the better the outcome for them, but if the client has strong opinions and is not prepared to tolerate unregulated investments, they end up in a three asset class solution.
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Venky Venkatesh |
