Can private bankers take any professional learning points from a newly published book Honey Money The Power of Erotic Capital by Catherine Hakim of the London School of Economics? The book asserts it can give definition to a new form of capital and works through an examination of this across a number of different cultures.
Ms Hakim describes erotic capital as the “most complex personal asset” including “sex appeal, personal charm, social skills, charm and charisma” which can give far reaching implications to the careers of men and women. This is as new as the Bible story of Deliah seducing Samson. At an academic level, the next phase of Ms Hakim’s work should perhaps include econometric analysis plotting personal financial success against “erotic capital” in different industries pre and post financial crisis. The correlation would be interesting to examine in that time series.
So what really makes a private banker marketable to his or her clients in today’s vexed markets?
“Style is obviously less important than substance but service can help in the short-term,” says Beyla Ziv Guest, partner at Apollo Partners, a Zurich-based independent family office. “In the long-term, clients will eventually notice if there is not substance.”
Private banks of any genre, BanquePrivee, family office or part of a large global bank, can accommodate a wide range of personalities and skill sets. “Clients are pragmatic,” says one head-hunter in Geneva. “They do not wish to be missold or oversold.”
Sally Tennant, CEO of Kleinwort Benson says: “A successful private banker is one who builds long-term relationships with his or her clients, a relationship which is based on competence, trust and mutual respect.”
These long-term relationships also have to exist across different phases of the investment cycle and should also move across generations of the client’s family. “He or she needs to understand their clients’ priorities and their business issues in order to ensure that the emotional family capital is also being looked after,” adds Ms Tennant.
CLEAR CHANNELS
The gold-plated banker has to be just as confident listening to an account of sporting achievements or lack of in their client’s children. Clients want a consistently clear channel of business and personal communication. “The private banker need to have a deep interest in and understanding of financial markets in order to advise well on the clients financial well being and a genuine interest in people,” she concludes.
The successful private banker today needs his own war stories from financial markets borne of experience, which points to banker of a more mature vintage and also one who can make the technical digestible and actionable. When economists like Nouriel Roubini appear on red carpets at international film festivals and are household names, clients are now much more aware of the continued fragility in financial markets. They want to hear “this is what we do next, follow me!” from their private banker rather than “oh dear now what on earth do we do now?” accompanied by nervous hand wringing. They need long-term resilience and endurance both from the banker and his employer.
Clients do not always know what they want. The private banker has to listen very carefully before coming up with a diagnosis and a plan of action. What they do want though is alignment of interests particularly in the aftermath of the 2008 financial crisis.
Ms Ziv Guest of Apollo Partners notes that “private banking is predicated on a model of win/lose, ie the bank always wins, at the considerable expense of the client. However a truly genuine multi family office is built on a model of win/win. The client and the multi family office sit on the same side of the table.” The growth of the multi family office in the last three years in Europe and in Asia has been marked and has to be related to the need for greater alignment of interests.
“Private banking is about giving integrated financial advice embedded with life goals,” says Harry Huerzeler, chief operating officer of the Swiss Finance Institute.
“There are three key areas of professional development in a private banker,” he explains. “Firstly the softer aspect of allowing the client to understand himself, this part is hard to teach, then there are two key disciplines of hard core investment knowledge and the detailed implications of fiscal status and asset allocation.”
Mr Huerzeler draws a parallel with a medical education. “There is the hard core long-term academic medical education followed by a long period of clinical training, where the hardest part is getting the medical student to apply his knowledge with the patient.” A medical education can take nearly a decade.
For private bankers today the time lines are much shorter and an employer will expect a newly-hired private banker to start bringing in revenue-generating business in the first 12 months. The reality may be quite different and a longer investment of time is needed, particularly if the recruit is under 30 or a “lateral” hire, recruited from another professional discipline, for example investment banking.
