Global Private Banking Awards 2019: Winners’ Profiles – Best Service Offerings
Best private bank in Brazil;
Best private bank for Customer Service in Latin America
Itaú Private Bank
Itaú Private Bank, a subsidiary of Itaú Unibanco, is one of Brazil’s largest private banks by total assets. During 2018, AuM grew by 18 per cent to reach $110.2bn, while the number of clients increased by 18.3 per cent to 8,667.
Much of this growth was due to the bank’s efforts to personalise offerings with products and services that fit clients’ individual needs and preferences, says Luiz Severiano Ribeiro, CEO of Itaú Private Bank. “Returns also play an important role, of course: our portfolios have generated consistent results in the past few years, so clients feel that they can rely on us.”
In a recent client satisfaction survey, the bank received a net promoter score of 71 per cent, in line with leading companies across all industries.
The bank has used big data techniques to better anticipate clients’ needs. Implementing the technology and getting the best out of it has been “quite a challenge”, says Mr Ribeiro.
“There is no room for error with a sensitive public as ours. But the large amount of data we do have is helping us learn more about our clients’ habits, education, hobbies and spending patterns, making it possible for us to offer even more personalised products, reports, events and means of communication.”
While Brazil undergoes political and economic upheaval, Itaú Private Bank’s model includes three practices to “protect clients from economic headwinds”. These are careful product curation, tailored and diversified product portfolios for each client and offering access to alternatives in the global marketplace.
“Our experienced investment team has a global approach; we generally recommend that our clients allocate 20 to 30 per cent of their portfolios to international assets,” says Mr Ribeiro. HM
Best Private Bank in Canada
RBC Wealth Management
RBC Wealth Management (RBC WM) describes itself as a “digitally-enabled relationship bank” and data is at the forefront of this. The private bank operates in an environment in which “client expectations are increasing, competition and markets are changing, and regulation is becoming more complex,” says Flora Do, vice-president, strategy and client insights.
RBC WM is one of the world’s largest wealth managers, with C$1.05tn ($780bn) of assets under administration and C$727bn under management as of Q2, 2019. It employs more than 5000 financial consultants, advisers, private bankers and trust officers.
The bank works with other RBC divisions to offer “holistic client experiences and solutions”. An example is Client 360, a recently-launched partnership between RBC WM and Personal & Commercial Banking in Canada. Using advanced data analytics, it provides a 360-degree view of clients who have relationships across multiple RBC businesses. Data science algorithms and big data technologies help the bank to better understand and anticipate customers’ needs.
“There is more data available and more demands being put on this data – what insights we can find, and how it can help clients and our businesses,” says Ms Do. “Using data in new ways while ensuring client privacy is mission-critical in our innovation approach. Collaborating with RBC business and functional partners created an opportunity to take a new approach to sharing data across RBC – with client consent – that ensured we met our commitment to a secure a more personalised experience for our clients.”
The bank plans to expand and further leverage its strategic data assets to enable employees to provide a customised advice experience and more effective and seamless relationship management, regardless of how they choose to interact with RBC. HM
Best Private Bank in Kenya;
Best Private Bank in Nigeria;
Best Private Bank for Customer Service in Africa
Standard Bank Wealth and Investment
The mission statement at Standard Bank Wealth and Investment is simple: to be the leading high net worth wealth business for sub-Saharan clients and those who are interested in Africa.
In light of changing client expectations, the bank has focused on transitioning from a product-led proposition to one that is insight-led, with the aim being to increase client confidence and loyalty. Its ‘Challenger’ model personalises sales messages, provides insight into unique client needs and challenges and tries to enable more informed decision-making.
In a bid to better understand its clients, Standard Bank commissioned a study to gain insight into Africa’s wealthy population. Key themes to emerging from the report include: that Africa’s wealthy accumulate and spend their wealth in unique ways, and enjoy personalised, bespoke wealth management experiences; a host of factors concern Africa’s wealthy and safeguarding their wealth is paramount; while philanthropy is viewed in the context of “giving back”.
Innovations in 2018 included its Elite model portfolio range, managed by Stanlib Multi-Manager under a discretionary fund management mandate which allows wealth managers to focus on offering holistic wealth management advice, and its first third-party retail investor hedge fund solution. Meanwhile, its limited endowment product was the first Shariah-compliant tax-efficient endowment policy in South Africa.
On the digital front, the My360 app officially launched in April 2019. The aim is to provide clients with a 360-degree view of their wealth portfolio and the wealth manager has access to what the client sees, which enables deeper client relationships. The hope is that My360 will increase advisers’ productivity and efficiency. ES
Best private bank in Lebanon:
Best private bank for Customer Service in the Middle East
Audi Private Bank
The conclusion of the legal unification of Bank Audi’s private banking units under the umbrella of a global and dedicated new business franchise, BAPB Holding, based in Cyprus, took place in 2018. According to the bank, the consolidation has created better synergies and accountability across the group, as well as more effective management and improved governance.
Moving forward, BAPB’s strategy is to continue its growth plans, strengthening its business model, risk management and control framework, and operational infrastructure.
The bank has grown the range of services and investment products offered to private banking clients. In 2018, it launched a Global Opportunities certificate, an equity-based vehicle that invests globally in equities, ETFs and options. This vehicle offers clients access “to BAPBs equity team’s best trading strategies through a pooled vehicle structure”, claims a spokesperson.
In response to client demand, BAPB introduced a new discretionary mandate investing according to sustainable and responsible investment criteria. A spokesperson for the bank says: “We have found that such an approach no longer penalises investors for caring about the environment and social progress. On the contrary, responsible investing is now in a position to meet or beat traditional approaches. This creates the attractive option for socially-motivated investors to invest their wealth profitably in a manner that is aligned with their values.”
The needs of private clients across the Middle East and north Africa region have been evolving quickly, and BAPB relies heavily on its local presence to adapt and react to these changes. “On the other hand, markets are becoming increasingly complex as the political/geopolitical aspects have been added to the equation, making predictions more difficult and the outlook more opaque,” says the spokesperson.
“This complexity has called for more frequent communication with clients, as well as more innovative investment solutions.” PG
Best Private Bank in Luxembourg;
Best Private Bank in the Netherlands;
Best private bank for Customer Service in Europe
ING
Clients are demanding more from private banks and they want it faster. ING claims to be continuously working to improve and optimise its services, considering which solutions, digital or otherwise, could contribute towards achieving an even better client experience.
For example, the global CX Hackathon sees ING staff from across the globe collaborate on highly focused efforts aimed at improving the customer experience. Meanwhile, the bank’s structured innovation process, known as PACE, encourages the rapid launch of new products and services developed by small, autonomous, cross-disciplinary teams. The aim is to only deploy resources when it is clear the innovation will improve the client experience, with killing off non-viable products crucial.
ING is a firm believer in both face-to-face and digital channels. “We’re in the middle of a transformation to becoming a next-generation private bank,” says Ruud van Dusschoten, director of private banking and wealth management at ING. “One which can tailor to the needs of new generations of private banking clients.”
In 2018, ING added video calling to its services and is actively offering this option to clients, though it stresses there is no obligation for them to partake, nor is there for its other digital offerings. It claims that both clients and staff alike appreciate the new channel, and 10 per cent of interactions now take place via video calls, a number which it predicts will rise in the future.
ING’s mobile app has also seen considerable growth, and the bank claims these digital channels allow it to maintain the same high levels of private banking services while improving the efficiency of its employees. Indeed, despite the volume of private clients having risen by 7 per cent in 2018, the number of client facing staff dropped slightly. ES
Best Private Bank in Monaco;
Best Private Bank for Thematic Investing
Banque J. Safra Sarasin
Banque J. Safra Sarasin embraced thematic investing more than 30 years ago, and prides itself in being one of the industry pioneers in this space. The investment approach starts by identifying multi-decade megatrends and key structural themes expected to shape the world.
The current environment provides good hunting ground for thematic funds, as investors today are challenged by slow economic growth in a rapidly changing world. “A thematically led investment process enables us to identify the global companies that can thrive in this era of disruption,” explains Jeremy Thomas, head of thematic equities at Sarasin & Partners, the J. Safra Sarasin Group’s London-based asset manager. “Where there is disruption there is opportunity, as investors typically underappreciate the duration or magnitude of change,” he adds.
Thematic investing greatly appeal to private clients. Mega themes such as digitalisation, automation, ageing, evolving consumption, or climate change are intentionally ubiquitous, and therefore easy for investors to appreciate and understand.
Sarasin’s core equity strategies draw from these themes to find individual companies best placed to exploit growth opportunities, each stock having its own idiosyncratic investment case. This investment process allows the firm to build high-conviction, concentrated portfolios, highly differentiated from broad indices. This is also the key risk around thematic investing, believes Mr Thomas, as investors have to accept the inevitable volatility that comes with equity securities and understand that returns may differ markedly from market indices in the shorter term. ESG and sustainability considerations are embedded in every stage of Sarasin’s thematic investment process, with the firm engaging actively with investee companies.
The Swiss bank started operating in Monaco in 2006, and furthered its commitment with the acquisition of Credit Suisse Monaco, completed in 2017. The bank has now more than 120 people managing almost €9bn ($9.8bn) in assets in the Principality. Clients benefit from multicultural and multilingual teams offering one of the largest trading rooms in Monaco, credit bureau and client counter, ensuring close relationships with its clients, explains Pierfilippo Castellano, CEO of Banque J. Safra Sarasin (Monaco)
The bank is also “renowned” for the quality of its client events, organised during the Rolex Monte-Carlo Masters tennis tournament, the Monaco E-Prix and exclusive golf tournaments. Due to the high concentration of UHNW Individuals in Monaco, the bank has been focusing for years on confidentiality and data protection, says Mr Castellano. The constant growth of new residents and the evolution of the existing ones represent a real opportunity for the bank, which aims to play a major role in this expansion, and continues to recruit new teams, whilst considering further acquisition opportunities. ET
Best private bank in New Zealand;
Best private bank for Customer Service in Australasia
ANZ Private Bank - New Zealand
In 2018, ANZ Private continued to grow its business in the small but competitive New Zealand market, increasing its AuM by 13 per cent to $18bn and growing its operating profit by more than 16 per cent.
“Our success is a reflection of the consistency of our long-term strategy,” says Craig Mulholland, managing director wealth and private bank, with a “relentless focus” on putting clients first and developing personal relationships contributing to boost client numbers. At the same time, the bank’s ability to manage margins and improve efficiency, along with an increased focus on key segments such as migrant investors and family office/UHNW clients, drove the growth of operating profit.
New Zealand’s reputation as a stable and inclusive country makes it an increasingly attractive place to live. “We are receiving an increasing number of enquiries from investors around the world including Asia, Europe, the UK, and the US,” says Mr Mulholland.
“In our experience, migrant investors value a partner who can help introduce them to networks and business opportunities in their new country.”
For migrant clients planning to come to New Zealand on a ‘Migrant Investor’ visa, the bank can help streamline the process by structuring portfolios and reporting, to help meet Immigration New Zealand (INZ) requirements, thanks in part to a Memorandum of Understanding with INZ, which allows the bank to work directly with them on behalf of migrant clients.
To respond to the needs of the rapidly growing Asian population in the country, which represent an increasing proportion of the bank’s client base, ANZ has set up a dedicated, full-service, multi-lingual Asian private banking team. In 2018, it also translated its website and client surveys into Chinese, with both initiatives a first in New Zealand. The bank also holds exclusive events for Asian clients, while also taking part in events on the ground in Asia.
Independent research carried out in 2018 shows that client satisfaction with ANZ continues to grow: 91 per cent of clients are very satisfied with the service, and nine out of 10 would highly recommend the bank to others.
The ability to meet all clients’ needs from a single point of contact, personalised service, pro-active and real time communication to update clients on key markets events and their impact on portfolios, transparency and offering of diversified portfolios, including alternative solutions, are more important than ever in current times of uncertainty, adds Mr Mulholland. ET
Best Private Bank in the UAE;
Best Private Bank for Islamic Services
Abu Dhabi Islamic Bank
The clients of ADIB are seeking an Islamic bank that can cater to their Shariah-compliant needs, but which also provides the high-quality services expected from a dynamic, modern bank, says Mohammed Azab, head of private banking at the Abu Dhabi-based bank.
“This is our core proposition. However, ADIB’s experience shows that Islamic private banking can gain wider appeal beyond a purely Muslim customer base and the fastest growing segment of our customers are now expatriates.”
This has redefined the potential size of the market available to the bank. Such investors, he says, “want to bank with an organisation that promotes ethical investment products and services, and which will become a long-term partner to support their wealth management objectives”.
ADIB describes the United Arab Emirates as “one large growth opportunity” and claims the bank’s products always have a “local flavour”. Trade and logistics, finance and tourism are the key pillars of the UAE economy, and the government has invested heavily in positioning itself as world-class hub for these sectors.
Internationally, the bank is present in six countries, with Egypt and Saudi Arabia the most promising, says Mr Azab. ADIB is targeting the Islamic Trade Corridor, which connects the Islamic finance market of the UK and Europe, via the Middle East to the fast-growing Islamic-dominated economies of South East Asia.
It is also focused on developing digital services that are accessible and easy to use. “This transcends generations and is not just about our younger customers versus our more established clients,” explains Mr Azab. “That is why we are working on redefining the private banking experience – bringing our clients a careful blend of digital services and wealth management advisory in a manner that suits their lifestyle.” HM
Best Private Bank in the US;
Best Private Bank for Succession Planning
Northern Trust
Technology remains core to Northern Trust’s growth strategy and ability to advise clients. In 2018, the US bank, which enjoyed 9 per cent revenue growth, made further enhancements to its goal-based wealth management framework, by rolling out a new set of features to include estate and wealth transfer planning.
“The framework enables us to visualise a consolidated balance sheet, dynamically align assets to goals in a purposeful way, and ensure clients have the right investment plan for all market environments, regardless of the level of their wealth,” says Steven L. Fradkin, president at Northern Trust Wealth Management. Coupled with the expertise of the bank’s wealth and investment advisers, technology allows for any aspect of a client’s plan to be changed in real-time to accommodate real life, he adds.
The Global Family & Private Investment Offices group (GFO) is Northern Trust’s fastest growing segment within wealth management. “We keep clients at the centre of everything we do, act as a consultative partner, and tailor holistic, customised solutions,” states Mr Fradkin.
The bank also regularly challenges conventional thinking regarding asset allocation and manager selection to provide investment solutions for clients that they would not typically receive at competitor firms, he claims. These innovative solutions have included real asset strategies, China-focused venture capital and private equity, fixed income enhancement strategies, municipal bond crossover approaches and cash enhancement strategies.
To meet the more complex reporting needs of family offices, Northern Trust introduced an advanced business analytics solution, Anchor Analytics, which enables clients to visualise data, offering intuitive report authoring tools and, more recently, holistic data modelling, allowing clients to easily incorporate outside data sources. Leveraging AI technology, the tool also offers clients the possibility to identify patterns and key drivers in their data.
With more than 130 years of experience working with business owners, Northern Trust provides advice throughout the lifecycle of a family-owned business. Advanced succession planning is essential to assure the greatest chance for success, even for established and profitable businesses, says Mr Fradkin. For entrepreneurial ventures, it often requires even greater advanced focus and attention to deliver successful results.
“Upon the untimely loss of an entrepreneurial leader, a business venture can quickly run short of resources and strategic vision,” he explains. “Advanced planning to assure ownership transition, management continuity and sound strategic governance can often make the difference between a failed business venture and one that continues on after the loss of the visionary founder.” ET
Best Private Bank for Customer Service in Asia
Taishin Bank
In its aim to become a reliable and reputable private bank in Greater China and Asia-Pacific, Taishin Bank has a two-pronged strategy, based on understanding clients by their behaviour and using this information to customise products and services to suit individual clients.
To understand their behaviour, the bank collects information on clients including their age, transaction habits, channel preference and lifestyle. This strategy, claims Samuel Lin, deputy chief executive of the Taipei-based bank, has enabled the bank to increase client satisfaction. For example, the bank chooses the channel through which it communicates with clients, based on their preferences.
“This is the reason that our clients are so willing to keep in touch with us,” he says.
The bank combines digital services with traditional services; in-branch teller banking services are supplemented with video conference-based financial consulting services, for example. “The video conference service provides customers with access to the latest market trends and financial advice from our professional team,” says Mr Lin.
“Outside business hours, our customers can use our video teller machine service to consult with tellers face to face.”
The most important factors in ensuring client satisfaction in private banking include professional financial advice, 24-hour service, a fast and convenient digital platform, multiple offers and exclusive experience activities, he says. “Our configuration of services combines online and offline elements to provide full access and convenient, intelligent wealth management.”
This customer-centric strategy helped Taishin record an 8 per cent growth in wealth management fee income during 2018 and a compound annual growth rate of 10 per cent from 2011 to 2018, claims Mr Lin. HM
Best Private Bank for Customer Service in the US
BNY Mellon Wealth Management
BNY Mellon Wealth Management strongly believes in a team-based customer approach, where each client is serviced by a wealth management team and has their wealth manager as their primary point of contact. When need arises, wealth managers can tap into skilled specialists. These include wealth strategists, such as wealth planners and estate professionals, who also help clients define their philanthropic goals, and inform them about critical matters, such as changing regulations and laws that could have an impact on their tax plans. Through appropriate planning, the typical wealthy family can boost their growth by 2 per cent annually, according to the bank.
Private bankers are integral members of each client’s wealth management team. They focus on both sides of a client’s balance sheet and develop tailored solutions that reflect each client’s unique tax, financial and personal circumstances. Family wealth investment advisers assist UHNW and family office clients in developing sophisticated and bespoke investment solutions to meet their more complex needs. Fiduciary specialists are focused on developing trusts for families across jurisdictions, understanding that familial wealth goes beyond traditional financial assets, and therefore assets such as real estate or an art collection need to be incorporated into estate plans.
A core tenet of BNY Mellon’s ‘Active Wealth’ approach is that a wealth plan must integrate goals-based investing, dynamic spending, opportunistic borrowing, tax management, and family governance and estate planning techniques “to empower clients to make smart decisions and navigate the unpredictable and unexpected with confidence”. Getting to know clients and understanding their goals, concerns and needs is key to be able to deliver results across market cycles and spanning multiple generations. The bank has a client-relationship tenure that averages 10 years. Its longest tenured client relationship is a family that has been with BNY Mellon Wealth Management for seven generations.
“Our long history as an institution, and the depth of our relationships with our clients, has given us unique insight into what drives market cycles, what clients are most concerned about and what must be done to create lasting wealth,” says Ben McGloin, managing director and head of advice, planning and fiduciary services at the bank. ET
Best Private Bank for Brand Strategy
Lombard Odier
Lombard Odier’s brand values are rooted in its “Rethink Everything” philosophy.
“When we started to define and articulate our brand purpose and positioning, we reached deep into our history, to understand the drivers of our differentiation and success,” says Fabio Mancone, chief branding officer at Lombard Odier. “We realised that for more than two centuries, our bank had thrived on innovation, adopting fresh perspectives and constantly rethinking the world around itself.”
This underlying philosophy has helped the bank weather more than two centuries and 40 financial crises, and enables it to continue to pursue its core mission, which is preserving and growing the wealth of clients, he adds.
In 2018, the bank made a public commitment to the “Sustainability Revolution” via a branding campaign. This year, it illustrated its approach by identifying “far-sighted, decisive companies”, called the “Eagles”, and those with “their heads in the sand, blind to the transformations taking place in every sector of the economy”, which it labels the “Ostriches”.
“Few banks have sustainability so close to their heart. We have long been both a responsible business and a sustainable investor,” claims Mr Mancone, explaining that this strong commitment has also allowed great engagement with clients, prospects and employees.
In the 19th century, Alexandre Lombard, a second generation partner, was a driving force in abolishing Sunday labour in Switzerland, and was among the first to actively support Henri Dunant, the founder of the Red Cross. In 1841, he advised clients against investing in US companies reliant on slave labour, whose business models he judged unsustainable.
Today, Lombard Odier embeds proprietary sustainability analysis and ESG metrics into all its investment processes and was the first global wealth and asset manager to achieve B Corp certification, the corporate sustainability rating, earlier this year.
“This focus on sustainability is the direct result of our forward-looking vision, and our commitment to thinking and investing for the long term. We believe that sustainability will be the biggest investment opportunity in modern history,” adds Mr Mancone.
The institution has also been highly commended for Islamic services, having offered investment solutions in line with Islamic finance principles since 2012. In 2018, the bank’s balanced, bespoke and fully customisable discretionary mandate was certified as ‘Shariah compliant’ by the Shariah Supervisory Board of Amanie Advisors. This year, Lombard Odier was the first Swiss private bank to open a branch in the Abu Dhabi Global Market, complementing its Dubai office.
“Demand for Islamic banking services is unquestionably rising,” says Arnaud Leclercq, limited partner at the bank. The trend is evident in industry figures and the business, especially in the Middle East, “one of the bank’s fastest growing regions.” ET
Best Private Banking Boutique
Banque SYZ SA
With more than $29bn in client assets at the end of 2018, privately-owned Banque SYZ claims to combine “the best” of Swiss private banking tradition, in terms of independence, quality of service and expertise in global investment management – with the “human dimension”.
Founded in 1996 in Geneva, the bank is free from shareholders’ pressure to deliver short-term results and is able to focus on its long-term aspirations. This allows prioritising quality of service and personal relationship with customers, says Nicolas Syz, head of private banking at Banque SYZ and son of Eric Syz, one of the founders. “Our focus as an independent and family-owned company is to provide tailor-made investment solutions to families, entrepreneurs and family offices at every stage of their wealth.”
Discretionary mandate strategies, managed through a “rigorous” risk-based investment process, use performance-linked remuneration fees, allowing alignment of interests with clients’ investment objectives, he states.
Last year, the Swiss Group, which also serves institutions and independent managers, launched SYZ Capital, to offer clients access to select niche opportunities across private markets and direct investments. Led by Marc Syz, the eldest son of Eric Syz, the business’s mission is to “democratise” access to high conviction alternative investments, by lowering minimum entry thresholds. It also provides qualified investors with a “flexible, diversified portfolio of niche and curated opportunities”, often overlooked by bigger players.
Demand for alternatives is growing, as clients look to generate performance in a low yield environment by diversifying exposure away from traditional asset classes, and are increasingly comfortable with including illiquid strategies in their portfolio.
“Illiquidity can be a risk and an opportunity, as long as the illiquid nature of strategies fits into the investment mandate and risk profile, and is well understood by the client,” explains Nicolas Syz. The risk lies where some illiquid strategies are packaged into supposedly more liquid structures or products, offering a false sense of liquidity to investors, he explains. This was the main issue faced by hedge funds during the financial crisis.
But ever-increasing capital flows into private equity and private debt, which push valuations up and lower expected average returns, have driven the bank to build a portfolio of strategies suited to a late-cycle environment, complementing private equity allocations with special situations and uncorrelated strategies.
“The presence of two generations in the group’s management structure clearly demonstrates our desire to plan for the long term and evolve the business, and cements the family’s commitment to the business,” says Nicolas Syz.
As it grows and evolves, there is no risk the business will lose its boutique spirit. “This entrepreneurial approach lies within our DNA and is deeply rooted in our values.” ET
Best Private Bank for Alternatives
LGT
In the current market environment, characterised by low interest rates and continued high stock market valuations and volatility, investors are looking to alternatives to reduce the risks in their portfolios and tap new sources of revenue. “Both institutional clients and private clients are increasingly using alternative investments, and in particular private equity investments, which significantly improve the risk/return ratio of their portfolio, while at the same time providing diversification,” says Thomas Piske, CEO at LGT Private Banking.
However, because of growing demand, more capital will flow into the private equity market, and private equity managers with little experience may proliferate. “Particularly for private equity investments, long-term experience and managers with a good network are key to success,” warns Mr Piske.
This is the only way they can gain access to attractive transactions, be in a position to identify the best offerings and have the strategic and business know-how to take advantage of the potential of a company and increase its value, he says. Private equity is the asset class with the highest dispersion of returns between good and not so good asset managers, cautions Mr Piske.
LGT, which is fully owned and controlled by the Liechtenstein Princely Family, has invested in alternatives for more than 20 years, and can rely on a “global network of high-quality managers”, with whom it has strong relationships.
For most investors, direct investments in single private equity deals are complicated or impractical, because of very difficult access, high transactional and legal costs, high illiquidity and high minimum sizes of the investment, which make portfolio diversification hard to achieve. To manage concentration risk, investors should diversify within the asset class and select different investment styles, such as primary programmes or co-investments. They should work with different private equity managers, and invest across a number of sectors, regions and duration.
Investors concerned about the increased risk of market turmoil are attracted to hedge funds as additional sources of diversification. “Low beta, discretionary strategies and innovative quantitative strategies all have a truly uncorrelated character and are thus well positioned to deliver tangible diversification benefits,” says Mr Piske.
LGT has a long-standing commitment to sustainability and in the alternative space conducts annual surveys of its hedge fund and private equity managers to assess how they integrate ESG criteria into their investment process. The aim is to motivate companies and managers to take a sustainability approach.
Private equity investors are a very important part of the global economy, having invested trillions of dollars in thousands of companies. In addition, private equity managers usually have majority holdings in companies, which gives them significant influence on a company’s management. “In our work with private equity managers, we have seen this dialogue lead to considerable progress in terms of ESG integration,” adds Mr Piske.
The UN-supported organisation Principles for Responsible Investment has played an important role in driving sustainability in this space, by publishing influential documents and working to standardise ESG due diligence procedures for hedge fund and private equity managers. ET
Best Private Bank for Diversity;
Best Private Bank for Philanthropy Services;
Best Private Bank for Education and Training of Private Bankers
J.P. Morgan Private Bank
With more than 160 years of experience advising and managing investments for charitable institutions and philanthropists, philanthropy is part of JP Morgan’s DNA.
A number of trends are shaping the way clients approach their giving, explains Diane Whitty, global head of the Philanthropy Centre at the bank. With the next generation expecting to inherit an estimated $59tn over the next 40 years, which represents the greatest wealth transfer in history, philanthropy has become a much larger discipline. Also, donors are choosing to give much earlier, as wealth is being made at a much younger age and on a much larger scale than ever before. Donors are also much more willing to take risks and increasingly drawn to support efforts to address the underlying systems that perpetuate and promote inequality. Accordingly, donors are seeking assistance in their philanthropy and often turn to trusted advisers, she adds.
“The sector is often intimidating for donors and their families to navigate. It is our mission to help our clients chart their philanthropic journey from beginning to end and feel confident that they have a trusted partner in the Philanthropy Centre at JP Morgan,” says Ms Whitty.
The discussion with the client starts around motivations and values, as it is important for donors and their families to identify why they feel compelled to give and what they want to see as a result of their efforts. “Subsequently, we promote a robust learning experience for our clients on the issues or geographies they seek to support. We believe that if giving is rooted in learning it is far more likely to be sustainable over time.”
The bank partners with clients to help them identify, due diligence and partner with non-profit organisations.
Philanthropy is a bond that ties the family. “Our clients often leverage giving as a way to commune the family, promote ongoing dialogue, and reflect on shared values,” she says. Although giving is often initiated by elder generations, philanthropy is important to members of the rising generation as well, which often has a personal commitment to ideals of sustainability, social responsibility and community service.
JP Morgan has more than 256,000 employees globally, with 170,000 in the US, where 50 per cent is ethnically diverse. “We strive to create an inclusive culture, where everyone can thrive and feel a sense of community,” says Sonnia Shields, global head of the Asset & Wealth Management Talent Institute, explaining that a culture of inclusion creates a stronger business.
In 2017, JP Morgan started a new diversity strategy, Advancing Black Leaders, to attract, hire, retain and advance top black talent. In early 2019, the firm launched Advancing Black Pathways, an initiative that builds on and accelerates the firm’s existing efforts to help black people “chart stronger paths to economic success”.
The bank is also increasing access to better educational and training opportunities for black students, including committing to hire more than 4,000 black students over the next five years into apprenticeships, internships and post-graduation roles. It also started a forum, Women on the Move, for female employees to share feedback with each other, as well as with senior leaders, both male and female, across the company.
The Men as Allies programme is sponsored by regional senior leaders, encouraging male colleagues to get involved. The bank also has a global LGBT inclusion strategy, while a disability inclusion is a focus.
JP Morgan has launched a firm-wide unconscious bias training partnering with research institute Neuro Leadership Institute. Online resources are available for all employees. “Education and training is moving beyond the pure workshop format and is now adopting a blended approach where learning can be on the move via mobile, through e-learning and simulations and then supplemented by workshop training,” says Nancy Korb, global head of human resources for wealth management.
Within asset and wealth management, the bank has a retention rate of more than 95 per cent for top talent, she claims. ET
Best Private Bank for Millennials
UOB Private Bank
With the largest wealth transfer in history looming, it is crucial for private banks to engage with younger generations. UOB Private Bank has launched several initiatives aimed at building long term relationships and providing clients with advice “to safeguard and grow” their wealth across generations.
“As most of our clients are business owners, we do focus on helping them to prepare their next generation for future responsibilities and leadership roles,” explains Ms Ong Yeng Fang, head of UOB Private Bank.
“This involves regular engagement with the next generation to better understand their ambitions and to equip them with the right skills to succeed when they take over the reins of their family businesses,” she explains.
The Singapore-based bank developed its Next Generation Programme to enable younger cohorts to exchange ideas with peers, professionals and entrepreneurs, while also allowing it to deepen its relationship with its client’s children. As part of the programme, the bank offers local and international internships with selected start-ups, tech companies and venture capital firms, partnering with global tech players such as Google and OurCrowd, a global equity crowdfunding platform.
“Through such collaborations, we hope to inspire and to encourage our Next Generation Programme leaders to gain insights on emerging business and technology trends, in order to overcome their family business challenges from a fresh perspective,” adds Ms Ong.
The programme received “very positive” feedback from both participants and parents, which translated into bigger share of wallet and new clients. Forty per cent of parents invested more assets with the bank in the year after their children’s participation, while 60 per cent of the Next Generation participants have become UOB’s clients. Looking forward to 2020, the institution plans to launch its Next Gen 2.0 and Alumni programme alongside more activities.
“We are confident such initiatives will continue to attract more talented individuals to join our programme and to deepen their skill sets,” says John Chen, senior vice president at UOB Private Banking. ET
Best Private Bank for Growth Strategy
Union Bancaire Privée
The achievements of Union Bancaire Privée (UBP), one of Europe’s fastest-growing private banks, are all the more remarkable when recalling how close the bank appeared to come to a near collapse.
This was after clients pulled their funds en masse following the twin effects of the global financial crisis of 2008 and exposure to fraudulent products associated with now-jailed fraudster Bernie Madoff.
Managed assets have since surged to SFr134bn ($135bn), overseen by 1,700 staff, meaning the 50-year-old bank is now finally starting to nip at the heels of older, established Geneva rivals such as Lombard Odier.
Under the stewardship of CEO Guy de Picciotto, UBP has made a series of strategic acquisitions, is in the market for more buy-ups, and is refocusing its effort on both traditional portfolio management and private equity investments, rather than the hedge funds of old.
“Acquisitions are not something you plan ahead, but yes, in spite of a slowdown in the market consolidation, we remain open to acquisitions in our priority markets,” says Mr de Picciotto.
The integration of ACPI in London has given the bank private debt expertise for the critical UK market, while buying Carnegie in Luxembourg has allowed UBP to concentrate on turning the Grand Duchy into its new European hub, offering access to all EU markets, now that Brexit threatens London and negotiations with Switzerland have stalled.
The bank says acquisitions have not only added critical mass in Europe, but also enabled a fast-growing footprint in Asia, which UBP has identified as a priority market for bulk recruitment of relationship managers. Working with External asset managers (EAMs) is seen as an “integral part” of the private bank’s strategy for business growth.
UBP has developed an e-platform designed specifically for EAMs, as well as dedicated investment products and support teams. Asia is seen as the key hunting ground for further expansion in this sector, where it is considered to be “a relatively new but already well-structured segment”. YB
Best Performing Private Bank
Industrial Bank Co., Ltd.
Industrial Bank Private Bank emerged as the winner of the best performing private bank category, based on PWM’s inaugural quantitative analysis of key performance indicators (KPIs), which were gathered from all private banking groups that have entered this year’s awards.
The Chinese private bank, established in 2011, experienced strong growth rates across several critical KPIs, including AuM and number of clients per relationship manager, while keeping a low cost to income ratio. In 2018, its AuM grew by more than 30 per cent to RMB426bn ($60bn), achieving similar growth rates in the private banking client numbers.
“With the rapid growth of the wealth scale of China’s high net worth people, the private banking business is expected to become the strategic ‘blue sea’ of retail business,” states Xuxian Dai, general manager, private banking department at Industrial Bank. As they become richer, clients bank with a higher number of institutions, and this has offered new business opportunities to private banks, he adds. Also, thanks to regulation, clients prefer banks as their professional wealth managers.
In recent years, Industrial Bank has improved its customer service, investing in personnel training, IT systems and digitalisation, while enhancing its product capabilities, leveraging on the group’s investment and asset management expertise. Products are customised to client’s individual investment objectives, while their complex needs are met through “integrated solutions”. These include both financial and non-financial solutions, with a focus on health management and children’s education. “High quality medical, beauty, education, study abroad advice and other resources provide high quality services for clients,” says Mr Dai. “This has become an important way to obtain and keep clients.”
A “client-centric” brand, high quality products, value added services and service experience, together with enhanced targeted marketing, have contributed to attract new private banking clients, largely sourced from the upper segment of retail clients.
But the Chinese private banking industry is still nascent and faces key challenges. The professional development of qualified personnel needs to be strengthened, he says, as most Chinese private banks are still based on their traditional retail wealth management business. Also, the sector could benefit from a broader range of investment solutions and more clearly defined legal structures in several areas of the investment space. ET
Best Leader in Private Banking
Peter Charrington, Global Head, Citi Private Bank
The first thing which becomes obvious when meeting Peter Charrington in his New York headquarters is the extraordinary energy of the CEO of Citi’s global private banking operation. Even early in the morning, he spins effortlessly from reception staff to private bankers to clients, remembering everyone’s names and with a friendly and meaningful word to all.
He replicates this performance in London, Hong Kong and other Citi hubs. But Mr Charrington lives this role and enjoys it. Staff say he replies to emails at all hours, whichever time zone he is in. And if there are complaints about the service at Citi, he wants to know the bad news in person, as quickly as possible.
Staff are united in seeing Mr Charrington as a leader, somebody they would follow into the trenches. This may have not always been the case. Sure, he was regarded as a rising star in the firm for the past decade, long identified as a potential boss. But colleagues, clients and rivals agree he has grown into the top job and recently acquired more of the gravitas and humility associated with a true leader.
Mr Charrington has successfully negotiated many challenges. These have included significantly improving the bank’s investment proposition, developing a high quality digital offering through key staff appointments and his own personal vision in this area, and putting an end to the product-pushing culture that pervaded many US investment-banking led firms.
But there are two key challenges he still faces, warn consultants. The first, he acknowledges, is the transition between the old guard of 40- and 50-year-old relationship managers who still hold significant sway in terms of client loyalty, to a younger, more innovative and digitally savvy workforce. This includes an overhaul of recruitment and continued improvement of in-house training.
The second is maintaining and improving profitability in a world where highly-skilled investment and digital staff are at a premium, maintenance of physical city centre locations can bite into the balance sheet and outsourcing to east European processing centres is no longer as cost-efficient as it once was. YB
