Dutch bank ABN Amro is looking to re-establish itself as a major wealth manager in several core European markets.
The sale of a strategic Asian private banking business, managing $20bn in the vibrant heartlands of Hong Kong, Singapore and Dubai, to LGT in 2017 signalled the parent institution was in retreat from the international arena. Further cuts of 800 corporate banking jobs across Asia, the US and Latin America announced during the highpoint of the coronavirus pandemic in 2020 confirmed the new regional European agenda.
“We will follow the corporate strategy of the bank, which is to be a strong north-west European player,” says Choy-Lin van der Hooft-Cheong, CEO of ABN Amro MeesPierson, responsible for the group’s global private banking franchise, outlining an “integrated approach”, bringing together investment banking and portfolio management.
“Our focus is on extending the business here and seeing how different units of the bank can more closely work together.”
Managed assets fell from €195bn to €190bn ($226bn) during 2020, triggered by negative interest rates as the bank began to charge clients for holding cash. But these outflows were partially offset by market performance and the Amsterdam-based private banking boss plans to bring in new assets by offering a more “intense experience” to entrepreneurial clients seeking a broader range of services.
Expansion plans
Following the first stage of her blueprint to promote inter-departmental co-operation in the bank’s Netherlands’ home market, where it is the leading player, the next is about improving connectivity in neighbouring countries.
“For the private bank, we hold a top three position in Germany, top five in France and top ten in Belgium,” serving 100,000 clients across the four key markets.
“We want to hold this position and grow our business in these countries. Our clients are operating internationally and we want to serve them in other geographies, which is important to them.”
The Covid pandemic, she believes, is one of several factors transforming private banking, alongside digitalisation and transfer of assets to a younger generation. Video banking has not only found favour with the majority of clients but also proved a more efficient communication channel for relationship managers.
“It means you can meet five clients in a day compared to two or three when you were travelling,” she says.
Alongside this increased efficiency she has seen the emergence of a series of “moments of truth”, redefining the client-adviser relationship. “Clients will still have the need to see you face-to-face,” says Ms van der Hooft-Cheong, recounting a recent exchange with an entrepreneur who had disposed of his operating business during the pandemic.
The businessman, with $50m in his bank account, demanded to speak with both private bankers and portfolio managers, to determine whether they “clicked” and if he could trust them with his money. “He was very frank about these matters,” she admits. “In these moments of truth, it matters very much to see one another,
face-to-face.”
Training partner
Rather than the more formal relationship common to Swiss banks, Ms van der Hooft-Cheong prefers the analogy of a personal training coach, using boxing pads to spar with fitness clients in the local park.
“Our aim is to be one of the most important sparring partners for our private clients, advising them how they can preserve or transfer wealth to the next generation or make it work for themselves,” she says.
Her bankers have been instructed to focus on building personal relationships and to share the psychology of their clients. “We need to try to understand our clients, what is driving them and what is important to them in life as that very much determines how they would like to manage their wealth,” says Ms van der Hooft-Cheong.
Closer to clients
The “sparring partner” dynamic helps her relationship managers get closer to their client base, she believes. “From that perspective it’s easier to think in the same mindset as the client and add value and bring advisory investment opportunities to them,” she says.
“We have a client group which is quite intelligent and already has a good network, with access to information and specialists, so we are asking ourselves: ‘What added value can we bring to them?’ We need to work very hard every day to bring opportunities and a new perspective to their table. The ‘trainer’ or ‘coach’ model is one that we hope can develop long-lasting relationships with clients for generations to come.”
Female focus
Among the priorities identified for ABN Amro’s top client tier during the Covid pandemic is a new focus on the needs of wealthy female clients, with sustainability and impact investing also at the forefront.
“Our female clients have had a much firmer, more strident voice in the conversation over the last year,” says Marianne Verhaar, head of private wealth management at ABN Amro MeesPierson, responsible for clients with more than $25m in free investable assets or €100m of total wealth.
The bank has made it a “business priority” to scale up for and better serve female clients, many of whom have driven recent conversations with couples and families, covering issues not previously addressed.
“When the women are around the table, they tend to bring up points which were always classed as ‘softer’ items, but which are in reality the most difficult topics,” says Ms Verhaar. These include discussing individual responsibilities and specifics of intergenerational transfers.
The bank’s management has realised female clients can spark a richer dialogue, as they look at wealth from a broader perspective than just investments and returns. “You often see that with very wealthy families, money is the great divider, while talking about philanthropy is the glue, which brings about better, more productive conversations between family members. This is something most typically addressed by women,” she ventures.
Health is another subject women are much more willing than men to discuss. “The combination of health, wealth and passing it onto the next generation is brought up much more effortlessly by women within our client base than by men.”
Covid has also left the wealthiest segment with time for more regular contact with bankers and deeper introspection. While many want to talk about investing in art or private equity, there is a parallel, more important underlying philosophical discussion to be had, around the notion of becoming an “active entrepreneur”, considering the future direction of the family as well as its business interests.
“Covid has made people realise they are not always in control, or able to buy things or take care of things. It makes us more aware that we are all vulnerable people,” says Ms Verhaar, who has witnessed family discussions moving way beyond wealth creation and preservation. “People have an increased awareness of the importance of impact investing. It has inspired people to discuss, as a family, in what way wealth also imposes responsibility.”
This new set of parameters is increasingly framing key discussions. Client assets invested sustainably by ABN Amro increased by €6bn to €26bn ($31bn) in the fourth quarter of 2020 and the bank also launched its Impact Equity Fund, allowing clients to invest in firms with a social and environmental focus.
“The question is no longer just about the company and investments, but about the impact you want to make and the world you want to leave behind,” she says. “The goals of earning money and serving society are now moving closer and closer to each other.”
