PWM/The Banker Private Banking Awards 2020
Our 12th annual private banking awards highlight the excellent work of banks around the world that responded to the pandemic without impacting their service.
Watch the regional results here
Private banks — struggling with a major transition from pure wealth management to a new role encompassing data gathering, analysis and manipulation — are seeing their game plans significantly accelerated by the catalytic Covid-19 crisis.
Both spurred on and challenged by Chinese ‘Big Techs’, wealth firms leaving behind traditional high cost, oak-panelled boardroom business are already benefiting from widescale digitalisation during the pandemic.
Now banks must move further still to match the needs of ‘next generation’ clients, embracing the social revolution rocking the world’s financial capitals.
This is a defining moment for private banks, whose relationship business of personal meetings has quickly transferred to a series of screen interactions. Wealth advisers say cultural changes they expected to play out over years were implemented in a matter of weeks.
Intensive experience
“From a client relationship perspective this has been the most universally intensive experience,” says Seb Dovey, judge and co-founder of Scorpio wealth management think- tank .
“Such moments will be remembered. Clients will value the contacts that have demonstrated empathy and offered clear information amid so much uncertainty. For those that did this well, the relationship will endure for many years to come.”
Our judges of the Global Private Banking Awards for 2020, who worked through entries from 120 banks, have highlighted how even before Covid, private client relationships were migrating to on-screen and digital formats, complementing face to face contact. They have talked about “increased pressure” on banks to recognise what is valuable in the human interaction and what can be delivered without it.
The mistake many banks make is the assumption that by not delivering in person, the relationship will be valued less by the client. “It is not really about the person, it is about the information and how it is accessed. That is the game changer,” asserts Mr Dovey
American generation
This key repositioning for the digital world has been successfully managed by US banks in particular. The private banking arms of JPMorgan, Bank of America, Citi, Wells Fargo and Northern Trust have all scored well in the awards for 2020. Most of our 15 judges concur that this is no flash in the pan. Rather it is the sum of several years of behind-the-scenes strategic work. The US players have long been gearing up their businesses to meet the demands of the 2020s.
Asian players, many of whom have not been hampered by a legacy analogue business, have also been pushing ahead and fast improving the customer experience. The efforts of the likes of China Merchants Bank and Industrial Bank are being increasingly recognised.
DBS in Singapore, another 2020 award winner, has long been highlighted by our judges for expertise in innovation, data and digitalisation. But along with the well-resourced Chinese banks, it is only beginning to break out of its immediate region.
What has surprised our judging panel is the caution of these Asian players compared to their European counterparts, most of whom have not been shy to target far-flung markets. “Other small nation states with strong banking operations have managed to establish themselves multinationally,” says Mr Dovey. “There is no reason why Singapore banks could not achieve this too.”
There is a strong suggestion from some that mediocre services from Western banks have failed to penetrate demanding Asian markets and that the region’s domestic banks are playing a much longer game, consolidating locally before embarking on broader missions, knowing there is no hurry to achieve almost inevitable domination.
Asian wealth engine
“Asia will remain the key engine of wealth creation in this decade. However, it will also remain a difficult region to do business in,” warns awards judge Amin Rajan, CEO of the Create-Research consultancy.
As successful entrepreneurs in their own right, most Asian investors are perhaps more demanding and less trusting. They can be quick to compare the returns on their investments to what they could earn by reinvesting wealth in their own business. “Their return benchmark is high and its timeline short,” adds Mr Rajan. “Many wealth managers in the West have struggled to deliver on the needs of this hard-nosed group, with its zero tolerance for mediocrity.”
Asian players have also been well positioned by their region’s preparedness for a deep and long-lasting pandemic. “As Covid has been going on longer in Asia than the rest of the world and with most banks already having had past experiences with the Sars virus, they were coming from a stronger starting position,” suggests Simeon Fowler, CEO of Hong Kong-based headhunter Fowler Fox. The bankers he deals with have also been able to dedicate more time, not less, in talking to clients, which has strengthened relationships. There is also evidence of Asian banks beginning to spread their tentacles globally, including Bank of Singapore, awarded best private bank in the United Arab Emirates. Many of these firms have benefited from Asian clients buying real estate in London, potentially boosting the banks’ European standing.
The banks which have performed best in our awards — Citi, Credit Suisse and UBS — are characterised by this regional penetration and diversity. UBS has triumphed globally, in Asia and in the sustainable and impact investing category. Zurich rival Credit Suisse also performed well in Asia, while triumphing in the Middle East, Russia and in the entrepreneurial segment, where many clients are Asian sourced and serviced.
Competing powerhouses
These powerhouses are competing more intensely on the other side of the world than on their doorstep and the numbers will further encourage such behaviours. The latest emerging battleground is south-east Asia, home to more than 600 million citizens, predominantly in their 20s and 30s. These demographic factors eclipse EU and US dynamics, argues Kian Leong, partner with PwC in Singapore. Add in China and Japan, and there is a globally compelling business case. “The potential is immense and simply cannot be ignored,” he says.
“The Asians are coming and it’s not temporary,” argues Gerard Aquilina, partner at family office advisers Cone Marshall. The expansion of European banks into Asia, evident since 2008, will continue. But the one-trick pony of the past, where the largest banks won assets predominantly in Asia, is no longer a sustainable model for private banking, he warns.
Despite the increasing gap between rich developed economies and poorer emerging markets, and the tendency for our politicians to choose economic nationalism over internationalism, major banks are no longer retrenching on home turf as they did five years ago. Global diversification is now exemplified by UBS’s merging of international and US operations and expertise. When it comes to serving global families, this will increasingly prove the game of the future.
- Best Global Private Bank
- Best Private Bank in Asia
- Best Private Bank for Impact and Sustainable Investing
Winner: UBS
Despite the Covid Pandemic, UBS’s Asia Pacific private banking operation enjoyed its best half year on record in the first six months of 2020. Profits doubled in the second quarter, boosted by high demand for structured products, according to the bank. “Cost discipline” also reduced expenses, driving the cost/income ratio down to its lowest ever level.
Iqbal Khan, the flamboyant, newly appointed co-head of UBS Global Wealth Management, is not slow to sing his new employer’s praises in this region. “With over 150 years of experience in dealing with multi-generation families, we’re well placed to be the number one foreign wealth manager in China and remain the number one in Apac,” he says.
But there has been an internal recognition that UBS can no longer be a one-trick pony in wealth management, with all new assets flowing from Asia, as has happened in the past. Bank bosses say their much touted “global integration,” which has merged the US operation with the global one, will help share resources, and ensure the wealth management operation diversifies regionally. The bank says that in the first half of 2020, two thirds of net new money was generated in Emea, with the residual spread evenly across other regions.
Top management prides itself in having created a “competitive advantage that’s unmatched,” through closer collaboration between different units. Its latest ‘3L’ concept of liquidity, longevity and legacy has combined internal work on behavioural economics with research on clients’ emotions and needs.
This focus, being rolled out across geographies and client segments, is likely to run for some time and the bank has already credited it with helping guide clients’ portfolio positioning effectively through the Covid-19 pandemic.
“The three Ls is not just a marketing slogan to us, it’s the core of our philosophy,” says Mr Khan, adding the new concept helps “frame conversations around what matters most to our clients, and enables us to be their financial life partners.”
The bank recently announced that sustainable investments are now the firm’s preferred solution for private clients investing globally. Of its $2.6tn in client assets, the bank claims nearly $500bn is invested sustainably. UBS believes a 100 per cent sustainable portfolio can deliver potentially higher returns than traditional investment portfolios, with strong diversification for clients investing globally. The pandemic, says the bank, has helped accelerate this shift by highlighting the vulnerability and interconnected nature of the world’s societies and industries.
“The shift in preferences toward sustainable products and services is only just beginning,” says Mr Khan. “We believe sustainable investments will prove to be one of the most exciting and durable opportunities for private clients in the years and decades ahead.”
Winner: Pictet
Thematic investments, which have been Pictet’s hallmark over the past 20 years after the launch of the Pictet-Water fund, have proved particularly successful during the past few months of the Covid pandemic, with the healthcare and tech sectors coming into sharp focus.
“By identifying the megatrends behind those thematic strategies, we believe we can select the long-term winners in the global stock markets in areas as diverse as health, robotics, smart city or security to mention just a few,” says Sven Holstenson, head of Europe onshore at Pictet Wealth Management, which oversees $610bn of client assets globally.
“In the current environment, certain companies are actually able to grow in spite of the recession,” he says. “The healthcare sector, the tech sector or the environmental economy in particular offer opportunities. These three clusters are areas where Pictet has developed a distinctive investment expertise. Those are very promising sectors that have done well in recent years, and that still have enormous potential.”
But it is the area of private assets, exploited by Swiss private banks in particular, that has enjoyed perhaps the strongest demand from international wealthy families. “We expect persistently low and falling interest rates to drive investors to higher-yielding and risk-diversifying private assets,” says Mr Holstenson. “Private equity, hedge funds and real estate are to become ever more mainstream in the near future and will no longer be considered alternative.”
Observers of Swiss private banking say that this investment strength has been fuelled by Pictet’s success as an asset manager. “Wealth and asset management are two equally strong pillars of the bank — in terms of earning power and assets under management. There is no prioritisation but rather a reciprocity between both business lines,” Mr Holstenson says.
Winner: Erste Private Banking
Erste Private Banking offers a full spectrum of wealth management services through a broad regional footprint in CEE and operations in six countries — Austria, Croatia, the Czech Republic, Hungary, Romania and Slovakia.
In 2019, and across all CEE countries, the bank focused on further rebalancing portfolios, with investment products overall generating a robust growth of 10.3% in assets under management, year-on-year.
“We broadened our portfolio with new investment products and structures exclusive for private banking, with special focus on discretionary portfolio management and ESG solutions,” explains Michael Tröthann, head of CEE retail sales and business development.
Recently, and in co-operation with in-house asset manager Erste Asset Management, the bank launched two new bond funds in the ESG space, complementing their existing range of responsible investment products which now consist of 13 different mutual funds.
In Austria, Erste launched its ‘Invest Manager’ digital portfolio management tool, providing a multi-asset portfolio tailored to the specific risk profile of clients. “With this tool, we provide a comprehensive supplementary offer for our affluent clients, closing the gap to a full discretionary portfolio management solution,” says Roland Jacubetz, head of private banking and wealth management in Austria.
The bank was quick to implement Covid-19-related measures. From mid-March, around 95% of their private bankers worked from home for around two months, before the launch of a rotational approach for in-office work. All branches in Austria and the majority of branches across CEE markets remained open.
“During the lockdown periods, our widely acknowledged digital banking platform, George, handled a record number of transactions, while our trading systems also performed flawlessly despite exceptional volumes,” Mr Tröthann explains. “The crisis has further sharpened our determination to remain a frontrunner in digital transformation, with a particular focus on advancing the digital standing of our advisory tools and processes.”
- Best Private Bank in the Middle East
- Best Private Bank in Russia
- Best Private Bank for Entrepreneurs
Winner: Credit Suisse
Credit Suisse’s private banking arm has enjoyed much success in the entrepreneurial segment, which it sees as a primary growth engine. The bank says it has been collaborating with entrepreneurs to realise their ambitions, finance their businesses and manage their legacies for more than 160 years.
“We continually seek ways to better serve this sophisticated client group, whose banking needs require private and corporate solutions along the whole entrepreneurial lifecycle, often across different countries and currencies,” says Philipp Wehle, CEO international wealth management at Credit Suisse. “Privately owned companies are the backbone of many economies and represent an important part of the overall wealth of our client base.”
The bank has further strengthened this focus with the appointment of Christian Meissner to coordinate wealth management and investment banking services for entrepreneurial high net worth clients, offering them lending and wealth planning, as well as advice on mergers and acquisitions, concentrating on mid-market opportunities.
Many of these clients have connections to emerging markets, where Credit Suisse is particularly strong. It was one of the first foreign banks launching in the Middle East back in 1967, offering a “robust” approach to risk management, minimising any focus on ‘politically exposed persons’.
Servicing Russian clients, who typically need support in Switzerland, the UK, continental Europe and Asia, has also proved lucrative, with the bank developing “a deep understanding of the country’s specific requirements” over the last 25 years, according to Anton Cherny, head of IWM emerging Europe at the Swiss bank.
Against a challenging backdrop, Credit Suisse has recruited wisely to replace key staff, including former wealth management boss Iqbal Khan, who defected to Zurich rival UBS after a well-publicised fallout with group CEO Tidjane Thiam, who has also since left the bank.
Winner: BTG Pactual
BTG Pactual’s wealth management business has grown steadily across Latin America over the last few years. Alongside its regional expansion, the business has opened new offices in the US and Europe with the aim of boosting its international investment offerings.
“This unique powerful combination puts our clients with the best of two worlds: the close relationship and regional expertise of a local bank, combined with the diversification and sophistication of international products,” says Rogerio Pessoa, head of wealth management.
The bank’s large investments in technology contributed hugely to its ability to cope with the many challenges of 2020. Being able to onboard new clients and service existing ones digitally, through the bank’s portal and apps, was crucial during the coronavirus outbreak.
“We already had tools that allowed virtual meetings to a point where we are able today to be closer to clients compared to the period when physical meetings were a norm. We were able to service our clients with the same level of agility and flexibility, two of BTG’s well known characteristics,” Mr Pessoa says.
In terms of investment products, the prolonged low interest rate environment has pushed clients to seek new sources of returns. Mr Pessoa points to alternatives, thematic investments and ESG as areas of growing interest among its clients.
“We saw growth in [ESG] products in 2019 and the trend continues in 2020. Some families are already actively engaging in these drivers for portfolio allocation, especially as second and third generations take responsibility for family portfolio allocation,” he says.
Also, clients have continued to show appetite for investment in technology. “BTG Pactual, as a leader in technology in the financial sector in the region, has not only been able to source quality products but also spur client’s interaction with tech ecosystem through Boostlab, our corporate venture arm,” says Mr Pessoa.
Winner: Andbank
With a presence in 12 countries, a key growth driver for Andbank remains its international footprint. Last year, its assets under management grew 10% to €24bn ($28bn), of which more than 80% are booked outside Andorra, with Spain accounting for the lion’s share.
As most of the bank’s clients are global, with strong links to Europe and Latin America, “offering global support to clients is a must,” says Ricard Tubau, CEO of Andbank.
The bank focuses on upper affluent clients, with assets ranging from €1m to 10m.
This segment offers a good combination of growth and return on assets and is less targeted by competitors, mostly focused on ultra-high net worth individuals.
“We have sufficient critical mass to compete in private banking against local universal banks and our Swiss competitors,” boasts Mr Tubau.
“Excellence in client service is at the core of our proposal, and is required in several dimensions: quality and range of services, talent and entrepreneurial attitude of our bankers mirroring our clients’ behaviour and innovation. It is a mix of ingredients that creates a great recipe.”
The pandemic validated the belief that “clients should be prepared for the unexpected”, which means that portfolios must be diversified and resilient, avoiding big risks and thus big losses. “A back-to-basics approach helped us rebalance portfolios with investments offering growth potential during the pandemic,” he says.
The crisis has also opened up new business opportunities, leading the bank to complete two acquisitions in Spain and one in Brazil, its two key growth markets. “We believe that now is a great time to acquire smaller wealth houses to build up critical mass.”
Winner: Private Wealth — Westpac Group
Over the past year, Private Wealth has introduced new enhanced digital banking capabilities to make banking “more secure, simpler, easier and faster”, and expanded its Global Investment Services offering for self-directed, sophisticated clients.
“Clients can select from a wide range of high conviction and often hard to access investment opportunities which leverage the bank’s thematic approach,” says Ashley Stewart, managing director at Private Wealth.
Clients have shown interest in several existing investment themes that have been further validated by the pandemic, such as modern healthcare, real estate assets and critical logistics addressing the faster shift towards e-commerce, he adds.
A dedicated portal, offering investment insights and visibility of their holdings, across both traditional and alternative assets is now available for clients.
The bank has also continued to invest in its people, with a focus on developing personal resilience, collaboration and techniques to manage challenges. “I am immensely proud of how our people have innovated, adapted and overcome challenges this year to support our clients when they have needed us most,” boasts Mr Stewart.
Its bankers have been able to react quickly and often support their clients in new ways, for instance by introducing alternative investment solutions, or through complete portfolio restructuring.
Private Wealth is well positioned to take advantage of the growth in high net worth Australians seeking to be in control of their wealth generation and creation, says Mr Stewart. The main challenge is that private banking services are not as widely used in Australia as in other parts of world. “Raising awareness and educating the market on how we can help to create an enduring, sustainable advantage is a challenge, but a good one to have,” he says.
Winner: Ahli United Bank BSC
Ahli United Bank (AUB) has developed a strong presence in the Middle East and north Africa region, with 148 branches across Bahrain, Kuwait, Egypt, Oman, Iraq, Libya and the UAE, as well as in the UK.
Access to the group’s extensive geographical footprint has provided significant opportunities for the bank’s private banking division in sourcing cross-border business, commercial opportunities and investment flows, resulting in growth in both client base and assets under management.
The bank’s strategy continues to focus on expanding its wealth management services and investment product offering, ongoing investment in technology, and on attracting and retaining the best talent to build long-lasting relationships with clients.
“Our people are crucial to our success, and as such, we want to attract, employ and retain the best people in the industry, making AUB the place people want to work,” says Mark Hirst, deputy group CEO, private banking and wealth management at AUB.
In 2019, the bank developed and launched an e-learning academy, customised for its private banking team, to make sure relationship managers have the right skills for their roles and remain at the forefront of their industry. “We strongly believe in the need to build a strong talent pipeline and a deep pool of resources is important for the bank and for our clients,” he adds.
Information and cyber security are an integral part of AUB’s IT capabilities. Last year, the bank expanded its cyber threat monitoring capabilities by implementing an advanced security monitoring system. “We are focused on optimising security technologies, to prevent both traditional and new generation threats,” Mr Hirst says.
During the Covid-19 outbreak, AUB conducted a review of its operations to assess the extent to which they were reliant on human intervention and find out which transactions could be automated. “In the future, the business-as-usual versus business continuity plan methods of operation will become obsolete. Both have merged to create a new flexible framework which can be adapted in all conditions. This is a significant step forward in terms of changing the existing practices and will further strengthen our agility as a bank,” he adds.
Winner: KBC Private Banking
KBC Private Banking experienced high growth in operating profits last year, driven by double-digit growth in assets under management and the inclusion of new business lines, such as insurance, in private banking activities.
Among innovations introduced by the private bank last year, its ‘plan for the future’ tool has been much appreciated by clients, as it provides them with an overview of future income and expenditure, taking into account personal needs and goals.
Non-banking services in the KBC Mobile app, such as airport lounge reservations, registered e-mails and a digital safe, were also popular, says Achille Boeyé, marketing manager at KBC Private Banking.
The bank has taken major steps to build a ‘phygital’ approach, whose main building block is an engine called Iris, which screens private banking portfolios daily based on a risk-return factor algorithm, developed by the group’s asset management arm. Alerting the private banker of any changes required to the client portfolio, it frees up their time, allowing a more customised advice.
“The significant investments in digital transformation made by KBC over the past years has clearly paid off and ensured that we could continue to serve our customers flawlessly during the pandemic,” says Mr Boeyé.
KBC bankers have proactively kept in touch with clients, while webinars were very well attended during the lockdown. As a result, the bank recorded an increase in its net promotor score.
It was also particularly important for employees to feel that the organisation was looking after their wellbeing. “Clients and employees need contact and trust: be present, even when you’re distant,” recommends Regine Debeuckelaere, general manager, KBC Private Banking and Wealth.
Winner: The Bank of NT Butterfield & Son Limited
Established in Bermuda as a private bank in 1858, Butterfield is the only financial services provider in Bermuda to offer banking, trust, asset management, advisory and custody services.
With banking operations in the Cayman and Channel Islands, trust subsidiaries in seven international financial centres (IFCs) and a specialist lending operation in London, the bank offers local clients access to international services and products, such as secure financing on London investment properties or trust structures available only in certain locations. It also provides international clients abroad with access to Bermuda’s advisers and select structures, products and services.
“Our international footprint means that we offer the best combination of international access combined with deep local market expertise,” says Nir Sadeh, head of private banking at The Bank of NT Butterfield & Son.
Its asset management division has a “strong” track record, dating back to 1997, of managing clients’ assets through various boom and bust investment cycles. “With more than $5bn in assets under management we are big enough to compete globally for large mandates, but our structure makes us nimble enough to service high net worth individuals with bespoke solutions and personalised service,” he adds.
Due to the pandemic, wealthy, international families are interested in diversifying their holdings and “are casting a wider jurisdictional net for holding and managing assets”. They are also increasingly mobile, which could boost demand for offshore residency and the use of IFCs. These trends may benefit IFCs such as Bermuda. Here the local government has done “an excellent job” of managing the pandemic and has introduced a one-year residency programme for financially independent individuals and those who can work remotely to aid recovery of the local economy, which has attracted “significant interest”.
Against a background of rising global geopolitical and economic uncertainty, high net worth families are also increasingly looking for options for safeguarding wealth, to ensure it can be protected and transferred to future generations. Despite still suffering from the stigma of being ‘offshore’, Bermuda has a long history of stability and Common Law tradition, which make it an attractive domicile for the protection and transfer of assets, states Mr Sadeh.
Winner: Itaú Private Bank
Latin America as a whole had a challenging year in 2019, but economic policy and a strong reformist agenda helped Brazil fare better.
On a structural basis, the country’s capital markets were very active during the year, driving new liquidity events. “We were able to attract net new assets from the competition and also from this new wealth and liquidity creation,” says Luiz Severiano, CEO at Itaú Private Bank. “Our structure and positioning played the strongest roles in attracting new clients and motivating our current customers to continue concentrating their investments with us.”
As interest rates remained low, the bank focused on further expanding its investment platform, adding new investment solutions both in the traditional and alternative investment areas.
Itaú Private Bank’s strategy is built on four pillars: client centricity, sustainable partnerships, constant evolution, and relationships built on trust. The bank believes that the success and sustainability of its business requires relationships of trust with clients, as well as the delivery of outstanding financial advice and services.
“In order to do that, we need to be the trusted adviser of the client: help them with their wealth planning needs and investment advice, locally and abroad, in addition to using our corporate and investment bank structure to help them with their businesses, real estate investments and other real assets. And we need to do that in a very customised manner, understanding each client’s needs, circumstances and aspirations,” Mr Severiano explains.
Covid-19 presented the business with challenges requiring adjustments to the bank’s operations. But the pandemic has not altered the bank’s growth plans — so far in 2020, net new assets have sustained last year’s record levels.
“We had already been preparing for a more intensive use of technology, and this advance investment allowed us to decisively shift 100% of our operations to the home-office model and provide our complete range of services at a distance,” he adds. “Our relationships with our customers have grown even stronger as they have recognised our dedication and efforts to maintain our high service standards.”
Winner: UniCredit Bulbank
UniCredit Bulbank’s most important objective in the long run is to increase customer satisfaction and become the preferred partner for clients. This long-term focus paid off last year, when assets under management, including life insurance products, grew by 27%.
“Every year we aim to achieve better results than the previous one,” states Darin Peshev, head of private banking at UniCredit Bulbank. “Despite the challenges private banking faces today, we continue to thrive, being a trusted partner for clients, providing best in class financial services and added value through the private banking team’s high-level of expertise and knowledge, and by leveraging on the group’s investment strategy.”
The UniCredit Group investment strategy is a “pillar” of the bank’s local investment philosophy, benefiting from “strong partnership with global asset managers”, which has proved to be crucial during the crisis. The key goal in portfolio management is to preserve clients’ wealth through generations, which is achieved by focusing on conservative investment solutions and diversification.
Through its dedicated ESG strategies, the private bank is focused on meeting the investment needs of the next generation of clients, driven by the desire to generate an environmental and social impact, as well as financial returns.
The UniCredit Private Banking Youth Academy also provides an important opportunity to engage with the next generation of clients. “We are committed to offering our clients ‘banking that matters’, providing real life solutions,” says Mr Peshev.
Winner: RBC Wealth Management
RBC Wealth Management continues to enjoy a leading position in Canada’s wealth management industry, with the largest market share of high net worth assets. The bank enjoyed a strong year in 2019, reporting net income of C$2.6bn ($1.97bn), up 13% from a year earlier.
In Canada, the bank continued to focus on holistic wealth planning, including adviser training on intergenerational and business wealth transfer. “We fully rolled out RBC Premier Banking to deepen banking relationships with wealth management clients, and enhanced our digital and data capabilities to drive increased client satisfaction and adviser productivity,” says Jennifer Publicover, senior vice president, wealth management products and strategy.
During 2019, RBC launched RBC iShares, a strategic alliance with iShares with which investors can access the largest and most comprehensive ETF solution suite in Canada.
“Canadian investors deserve a level of choice, quality and value that is second to none — and that is what RBC iShares delivers,” Ms Publicover adds. “This alliance will deliver value to Canadian investors by bringing them the ETF products they trust, the world class investment talent they want and the service they deserve — all in one place.”
As the coronavirus crisis unfolded, RBC acted fast to guarantee business continuity, providing employees with the secure technology needed to work offsite and to safeguard client’s financial information at all times.
“We entered this crisis from a position of strategic and financial strength, with one of the strongest balance sheets of any bank. Our core client beliefs remain on the need for personalised holistic advice, with heightened focus on streamlining end-to-end client experience (eg digitalisation) and delivering One RBC value to high net worth clients,” she adds.
Winner: LarrainVial
Social unrest in Chile, which started at the end of 2019 in response to the increased cost of living, privatisation and wealth inequality, had led many clients to shift their portfolios to very conservative or short-dated investments. The pandemic has been an opportunity for many of them, who had been caught out by the market rally, to get back in, explains Gonzalo Córdova, head of wealth management at LarrainVial.
Clients’ concerns today revolve around the political-social challenges the country is facing, namely the programme of promised tax reforms, the new constitution process and presidential elections. Through seminars and online talks, the bank has provided clients with information on these topics, while it has been recommending they invest in international assets, benefiting from the bank’s open architecture model, in the US dollar and other foreign currencies, and in sectors such as technology, telemedicine and logistics.
Striving to offer a holistic approach to client servicing, LarrainVial has developed a digital tool, called ‘My Objectives’, which allows clients to define different life objectives, each matched to unique investment recommendations. “A holistic, goals-based approach is very important, as it helps clients build the life they want by working to achieve their goals,” says Mr Córdova.
LarrainVial is allocating a large part of its resources to improving its digital platform, LV Digital. “The most interesting client segments will be younger customers and those seeking excellence in service through highly secure and digital solutions,” he says.
Technology skills and a team of young financial advisers “very comfortable with technology” allowed LarrainVial to quadruple the number of clients participating in its digital events, including talks, seminars and product presentations, during the pandemic. The bank was also able to bring in new clients, as onboarding and self-service investment processes can be entirely carried out online.
Winner: China Merchants Bank
China’s technology sector and vibrant start-up economy has been identified as a key source for new customer acquisition by China Merchants Bank (CMB). The bank’s wealthy clients, overseen from 140 very well-staffed private banking centres, are especially concentrated in the cities of Beijing, Shanghai, Shenzhen, Guangzhou and Wuhan.
Significant growth in this customer base has been facilitated by the acceleration of online communications and transactions, with Covid-19 providing a robust testing ground for online systems, which have negotiated the pandemic with “good” results, according to the bank.
Managed assets grew from $289bn in 2018 to $316bn in 2019, with an even steeper growth in client numbers.
The emphasis at CMB has always been on asset management, which the bank sees as the essence of private banking. The belief in CMB’s Shenzhen headquarters is that portfolio returns can be directly attributed to conversations with clients about risk taking, themes and asset allocation, making this a particularly attractive and vibrant activity for them to be involved in.
“The advantage of institutional investors over individual investors has rapidly increased during the past five years,” says a CMB spokesman. “In this respect, the asset management results of private banks will become one of the most important criteria for customers to judge whether they should choose us.”
While strong competitors such as ICBC and Industrial Bank of China have caught up fast, CMB still has first-mover status among the country’s wealth managers, with sharp focus on maintaining client families’ long-term prosperity. The bank puts its investment strength down to several factors, including a “leading multi-asset allocation capability” and an open product platform with “full market coverage of investing strategies in China”.
Winner: ČSOB Private Banking
The first pillar of ČSOB Private Banking’s three-pronged growth strategy has been around educating clients on the importance of staying invested, thinking long term and spreading regular investments over time, which has led to an increased share of client investments in equities and alternatives, at the expense of deposits.
Acquiring new clients remains crucial. While the bank’s affluent customers continue to be the private bank’s main client target, the expansion of the investment banking activity to cover SMEs and family run businesses has proved another growth opportunity. The closer co-operation with SMEs is benefiting both arms of the group, which are making the most of “mutual synergies”, says Pavel Tich , director of private banking segment and wealth office.
With ČSOB being a ‘bancassurance group’, the third growth lever is around the sale of non-life insurance solutions to individuals and businesses. “The growth potential for business insurance is huge, because most private banking clients are also company owners, CEOs, or board of directors’ members.”
But while rising markets critically helped generate good financial results last year, this year there are “several challenges that will have to be dealt with to sustain our KPIs,” says Mr Tich .
The first one is to keep convincing clients they should think long term, and that equities and alternative investments have their place in portfolios even during volatile markets. It will also be challenging to continue to innovate. “Given current market conditions, it is ever so much harder to come up with meaningful investment solutions with an acceptable risk-reward ratio,” he says.
Another big issue is “to keep staff and offices Covid-free”. However, the sudden switch to remote working at the start of the pandemic forced the bank to rapidly solve issues that in the past would drag on, such as remote access to some of the bank apps. “We are ready, should the pandemic situation worsen and government regulations tighten up,” he adds.
Winner: Nykredit Private Banking
Nykredit Private Banking was established as a separate business unit within the Nykredit Group in 2004. Today, the team comprises private bankers and wealth specialists in areas such as wealth and tax planning, wealth management, credit, inheritance, succession planning, cash management, and business and home financing.
In order to respond to the changing nature of private banking services, Nykredit introduced a new business strategy called ‘Next Level’. The strategy is based around two key principles: one is to update the business fundamentals; the other to create holistic experiences which exceed clients’ expectations.
“The first point is concerned with restructuring our business and value proposition into a modern, hybrid business model, combining human interaction with digital offerings,” explains Lotte Månsson, director, Nykredit Private Banking Elite. “The second point relates to our strategic aim of becoming our clients’ financial confidante. In this new hybrid way of doing business, the relationship between private banker and client has changed and we think it will continue to take new forms over the next couple of years. It will require financial institutions to develop new skills — importantly, skills related to emotional intelligence.”
For the past couple of years, Nykredit has been working extensively to add new investment solutions to its portfolio, particularly in areas of ESG and alternatives. “The demand from our clients is continuously increasing, but more than just meeting the demand we want to work together with our clients to structure strong investment strategies that delivers both monetary and personal value,” Ms Månsson says.
Winner: BNP Paribas Banque Privée France
Having successfully modernised his bank more than most in terms of digitalisation and compatibility with needs of the next generation, BNP Paribas Wealth Management CEO Vincent Lecomte is now concentrating on linking up the work of the group’s investment banking and private banking arms.
Unlike other European players, who experimented in Asia and then pulled out, he is prioritising both the north and south of the continent, expanding staff and resources in Indonesia, Malaysia and Singapore, as well as Hong Kong.
But it is closer to home that the French bank is looking to both consolidate and boost its position, particularly in France and Germany. The bank has particularly facilitated and encouraged real estate purchases in these jurisdictions. It sees this co-operation with its corporate and investment banking arm as “at the heart of our model in Europe”.
This partnership marks a significant change to the state of play 10 years ago, when investment banking very much ruled the roost, particularly in France, where the private bank was seen purely as a distribution channel for products created elsewhere in the group.
“The mindset has really changed,” says Mr Lecomte. “What the group CEO now expects from us is to leverage the best of breed of all the businesses to the benefit of our clients.”
Despite vast expenditure on digitalisation, this will remain very much a “people business”, based on “trust and expertise”.
While the bank, during the Covid crisis, has definitely seen the benefit of this long-term investment in the client experience, the next stage is to integrate sustainability into the formula, in particular converting customers’ portfolios and mindsets to a much deeper penetration of ESG principles.
Winner: Berenberg
Established in 1590, Berenberg is one of the world’s oldest banks. Privately-owned and run by its managing partners, the Hamburg-based bank today employs around 1500 people at 15 different locations across Europe and the US.
The bank has identified three groups of clients with specific wealth management needs — entrepreneurs, foundations and family offices. In order to serve each group, Berenberg has established three centres of competence with experts on topics of special importance to their respective target group.
Berenberg’s wealth management and asset management divisions work closely together with the aim of offering clients a broader product range. “As diverse as the divisions are, they are all united by our determination to provide clients with top quality, objective advice, the best possible service and excellent execution,” says Klaus Naeve, head of wealth management. “Berenberg will continue to focus on the service offering and pursue very conservative risk management.”
In 2019, Berenberg enjoyed strong performance from both its wealth management strategies and the range of fund solutions developed in-house. In addition, the bank was able to offer clients a number of alternative investment solutions including direct corporate investments, private equity, as well as investments in digital infrastructure and real estate.
Two years ago, Berenberg opened its ‘ESG office’ to respond to the increasing demand for sustainable investments from clients. “The interest amongst our customers for products and services that connect economic, ecological and social criteria is continuously rising. More and more private clients, charitable foundations, churches, non-profit organisations and institutional clients such as pension funds want to combine financial returns with sustainability aspects,” says Mr Naeve.
The need for advancing digitalisation has been another factor calling for constant action within the bank. Alongside various automation projects, the firm introduced a new online banking system in 2019, the Berenberg Wealth Management Portal.
Winner: Alpha Private Bank — Private Banking Services by Alpha Bank
As the pandemic-induced global recession makes acquiring new clients very challenging, it is crucial to build capabilities to compete in the new, post-Covid environment, says Emmanouil Arzinos, manager of the private banking division at Alpha Bank.
The bank’s efforts are focused on strengthening its advisory services, to provide added value to clients in this period of significant volatility in financial markets, while also upgrading its discretionary service offering. Portfolio counsellors and product specialists have been brought in to work alongside private bankers to deliver customised investment solutions to clients.
“In this complex environment, with low inflation rates and ultra-low fixed income yields, clients tend to rely more on their relationship managers to broaden their investment horizons, are considering more sophisticated instruments, require more personalised service and detailed analysis,” states Mr Arzinos.
The bank is also in the process of “gradually implementing” its digital strategy. Its dynamic digital advisory tool, the Investor Electronic Platform, has been enriched with new functionalities to enhance the advisory selling process.
Since the start of the pandemic, private bankers have been equipped with digital tools to work remotely, while mobile and web services for personalised and safe client communication are being developed. “Digital tools offer virtual ‘face-to-face’ communication, but building relationships, which is essential to the private banking business, is difficult, especially with new clients,” points out Mr Arzinos, worrying that physical distancing is affecting the social interaction dimension of the relationship, having brought to a standstill the bank’s rich programme of events.
As people’s sense of security in the country has gradually improved, albeit disrupted by recent geopolitical concerns, the bank has re-launched “motivating campaigns” to encourage Greek high net worth individuals to repatriate funds held abroad into the country, which is another key objective for the institution.
Winner: HSBC Private Banking
HSBC is seen by many in Hong Kong as a domestic bank. Its iconic building is one of the mainstays on the territory’s skyline. The bank is a natural “go-to” institution for many wealthy local families.
“Over the past three years, we have invested heavily in our capabilities, recruited significantly to expand our teams and delivered a refreshed ultra-high net worth client proposition to enhance our bespoke offerings,” says Siew Meng Tan, regional head for Asia-Pacific, HSBC Private Banking.
One of the challenges for the bank has long been how to replicate this fame and brand-recognition in Hong Kong, with a similar penetration in surrounding countries. “Our ambition is to become the leading wealth manager in Asia,” says Ms Tan. Her plan is to provide a more distinctive experience for wealthy clients, particularly in the Asean region, by building up greater expertise in Singapore.
“As a key global booking centre for HSBC, Singapore will also be integral to our growth, especially as we continue to extend our capabilities and reach to serve international clients across Asean and the rest of the region where fast-rising wealth is boosting awareness and demand for private banking,” she says.
In Asia, as in Europe, the bank is striving to improve its connectivity between different pockets of expertise, something HSBC has sometimes struggled with in the past, despite promoting an international mindset.
“Many clients have interests all around the world and so need a bank that can operate in many different jurisdictions and can look after them worldwide,” says Charles Boulton, CEO of HSBC Private Bank, UK.
More than ever since the advent of Covid, HSBC understands the importance which clients are attaching to investment performance and management of risks. During the crisis, it reshaped its approach to private equity, working closer with experts at HSBC Global Asset Management. It is also stepping up efforts to work more closely with clients in the spheres of real estate and structured products.
Winner: OTP Private Banking
OTP Private Banking operates as one of the major business lines of OTP Bank, providing dedicated private banking services in 11 countries across the CEE/CIS region to almost 72,000 clients and managing €8.4bn ($9.1bn) in client assets.
The private bank of OTP Hungary enjoyed a record year in 2019, both in terms of asset growth and net new money generation. Assets under management amounted to HUF2,116bn ($7bn), an increase of 25% from the previous year.
“Due to the perfect combination of favourable business environment and the appropriate growth strategic steps, growth dynamics reached record levels in 2019,” explains András Takács, managing director, head of wealth and investment management.
Despite the pressure on profitability, operating revenues also reached a record level of more than HUF18bn in 2019, an increase of 17.4%.
In response to the challenges of digitalisation, a new dedicated self-service value proposition was added to the existing service range at the end of 2019. The new service, ‘Direkt PB’, is the first private banking service in Hungary exclusively using digital channels.
“In recent years, we have been putting in a lot of effort and energy, and it has been part of our strategic focus, to shift traditional banking transactions towards digital channels. We have achieved serious results in this field, as 89% of our customers have access to internet banking, while 78% of transactions are made via digital channels,” Mr Takács explains. This high ratio of internet banking adoption proved crucial this year, making it easier for clients to adapt to all the remote services provided by the bank during the Covid-19 lockdown.
Winner: Kotak Mahindra Bank
With a presence in more than 17 cities in India, Kotak Mahindra Bank offers wealth management services through its wealth management and priority banking divisions, providing customised financial solutions to its ultra-high net worth and high net worth clients.
Kotak was one of the first private banking businesses in India to offer family office services — today it manages wealth for 50% of India’s top 100 richest families.
One of the key developments of 2019 was the transition to an annuity business model. “This places greater emphasis on transparency and ensuring that the interest of clients and the bank are aligned, and we believe this will further accelerate our growth,” says Oisharya Das, CEO at Kotak Wealth Management.
Also last year, the bank launched Kotak Optimus, a discretionary asset allocation platform, designed for investors with a moderate-to-aggressive risk profile. Other initiatives included the expansion of its alternative investment offering, and the introduction of client engagement initiatives such as ‘NexGen Connect’ and ‘Leading Ladies’, exclusively targeted at millennial and female clients.
The disruption caused by the Covid pandemic is likely to have a long-lasting impact on the sector, according to Ms Das. “Through this turbulent period, our focus has remained on our clients and we have increased our engagement with them,” she explains. This included putting in place a business continuity plan to ensure services were not disrupted, while at the same time encouraging clients to adopt a range of digital solutions to safely being able to bank from home.
“We expect to the next few years to be very different from what we’ve witnessed in the past. We see this as an opportunity for us to consolidate and grow our leadership position,” Ms Das adds.
Winner: Mediobanca Private Banking
The acquisition of a 100% stake in private banking boutique Banca Esperia, which investment bank Mediobanca launched through a joint venture with Mediolanum in 2001, and the resulting creation of Mediobanca Private Banking in December 2017, has significantly strengthened Mediobanca’s footprint in private banking. The Italian bank had already consolidated its position in the wealth management space with the launch of CheBanca! in 2008, born as the first Italian digital bank catering to affluent individuals.
Mediobanca Private Banking prides itself on providing clients, many of whom are entrepreneurs, an “exclusive private and investment banking service” leveraging synergies with its corporate and investment banking team.
“For Mediobanca, private banking has always meant acting as a link between private capital and business,” states Angelo Viganò, head of Mediobanca Private Banking. “This approach continues to be our model, and is ideally suited to our extremely select clients, 70% of whom are now ultra-high net worth individuals.”
During the past five years, the private bank has been focused on illiquid alternative strategies, both investing in Italy and globally. A distinctive feature of its product offering are direct investments via club deals, where Italian entrepreneurial families co-invest in unlisted medium-sized firms with growth potential, with Mediobanca acting as sponsor for the project. Through its private market platform, the bank launched three private market funds in the last three years, while strong synergy with its corporate finance team has enabled the firm to close “deals supporting the real economy”.
“In this low interest-rate environment, private banking has provided a response to the wealthiest clients’ need for diversification, by identifying new investment solutions,” says Mr Viganò. The Italian wealth management market remains one of the world’s most important in terms of size, ranking in the top 10 globally. “This is a huge opportunity for Mediobanca Private Banking to position itself as the asset management partner of choice for ultra-high net worth clients, with wealth greater than €10m ($11.8m),” he adds.
Winner: Hana Bank
Based on its management principle ‘Next 2030’, the objective of Hana Financial Group is to continue to pursue the profitable and sustainable growth of its business and accelerate its digital transformation.
The group was the first to introduce a private banking division in Korea, back in 1995. Today the private bank offers a wide range of wealth management services and customised investment solutions to clients, ranging from ultra-high net worth individuals to millennials.
Increasing digitalisation has been a priority for the business and efforts have been made to optimise and integrate the use of technology into its services and processes. The Hana Private Banking System, a platform that gives private bankers real time access to markets, investment products and client information, was upgraded in 2019 to include new functionalities.
“Above all things, we pursue to offer a digital banking service that is based on having the deepest relationship with clients as a priority,” says Wonki Chung, managing director, wealth management business group.
The coronavirus outbreak has accelerated the use of non-contact digital channels such as virtual video consultation, giving clients the opportunity to get advice from the bank’s in-house advisory experts on issues related to taxation or real estate investments, as well as legal and product management concerns.
Recently the bank launched a new subscription channel focused on clients’ wellbeing, offering information on healthcare, disease prevention, nutrition and healthy lifestyles.
“As a leader in the private banking business industry, we take pride in creating new trends through consistent innovation and effort,” Mr Chung adds.
Winner: ING
ING launched its private banking service in 1998, making it the youngest private bank in the Netherlands. Being part of a global banking group, however, has given ING Private Banking a great platform for growth.
The bank prides itself on having clients’ aspirations as the starting point of what they do, whether the interaction is digital, remote or face-to-face.
Next to a strong ‘human touch’ approach, there has been an increasing focus on the bank’s digital capabilities in recent years, which has proved crucial during the
Covid-19 crisis.
“Our first priority was and is the health of our clients and staff and, meanwhile, safeguarding the continuity of our service. Our digital capabilities really helped us here in providing a seamless experience,” says Léon Wijnands, head of private banking and wealth management in the Netherlands.
The bank’s ultimate goal is to reinvent the concept of private banking and set a new industry standard through creating a “truly seamless omnichannel private banking experience”. The development of propositions such as ‘forward planning’, ‘digital investment proposal’ and the ING Investments app, are contributing towards delivering those ambitions.
“Data helps us to get better understanding and clear targeting. Digital helps us to serve our customers in the way they prefer. And last but not least the quality, expertise and customer centricity of our people is highly appreciated by our clients. That is why they entrust us with their business,” adds Mr Wijnands.
Winner: Maybank
Client-centricity is deeply entrenched in Maybank’s mission and strategic plans. The bank, Malaysia’s largest by market capitalisation, views its private banking arm as more than just an investment solutions provider, but also a wealth partner for clients across the region.
A strong brand name and good reputation have been key contributing factors to the bank’s growth in 2019, as more private banking customers see the firm as a trusted partner to manage their wealth aspirations.
According to Carolyn Leng, head of Maybank Private Malaysia, another crucial driver of growth has been the bank’s ability to deliver “new innovative products, investment opportunities and differentiating propositions” to its clients. As an example, the bank granted clients exclusive access to investments in IPO financing through Lombard.
The launch of new products has also contributed to the rise in assets under management. Maybank Islamic, for instance, launched the Maybank Global Mixed Asset-I Fund in 2019.
The Covid-19 pandemic has changed the way the bank engages with clients and has also accelerated the adoption of technology, with advisers quickly switching to videoconferencing to keep in touch clients. “The new restrictions did not stop them from continuously engaging with our clients, to update them on the market, as well as to discuss investment portfolio strategies, which is key during this time of market volatility,” she says.
Looking forward, Maybank Islamic will continue to aspire to be the leading bank in the Islamic wealth management space in the Asean region. “We will continue our product innovation to provide a full suite of Islamic wealth solutions offering and improve our infrastructure, especially on Islamic wealth digital banking. As for Maybank Private, we look to offer more access to sukuk and Islamic offerings, as well as improve our Islamic wealth solutions,” Ms Leng adds.
Winner: AfrAsia Bank
The creation of a dedicated wealth management department, the expansion of its talent pool, with recruitment of “key and knowledgeable” private bankers, as well as the upgrade of existing systems and processes, were some of the key initiatives that helped improve client service at AfrAsia Bank, which attracted significant net new money last year.
These initiatives have translated into more tailor-made and innovative banking and investment solutions, enhancing risk and cost transparency, explains Thierry Vallet, general manager at AfrAsia Bank.
The institution has also launched a ‘premium service hub’ providing rapid service for the daily banking needs of high net worth individuals, while in-house experts now offer daily market updates, covering key investment ideas and themes.
Over the past two years, the bank has also introduced various initiatives to boost employee satisfaction, improving areas such as ‘trust in senior leadership’, ‘employee recognition’, ‘training and development’ and ‘pay and benefits’, reaching an employer net promoter score of 80% and greatly increasing its employee engagement score, which was one of lowest among local companies in 2018.
AfrAsia targets both local and international high net worth and ultra-high net worth individuals, with a preference for south and east Africa, as well as European residents on the international side.
“AfrAsia is first and foremost a bank created by entrepreneurs, for entrepreneurs,” explains Mr Vallet. Since entrepreneurs have complex requirements that change over the lifecycle of their businesses, they often need guidance on both personal and business assets.
“A deep understanding of our clients’ needs has enabled us to combine our key strengths in both private and corporate banking to deliver a holistic solution. This is what our clients value,” he adds.
Winner: Santander Private Banking
Santander Private Banking has built a strong presence in the private banking sector across Latin America and Europe.
During 2019, the bank’s main strategic focus was on organic growth around five key priorities: the launch of a global value proposition; strong value-added product offerings, ranging from tailor-made structured products to alternative investments and solutions; a unique and global offering for ultra-high net worth individuals; further digital transformation; and the strengthening of its global brand as one that connects with clients and represents the firm’s values.
“Also, our close collaboration with Santander Asset Management in Latin America has driven us to further develop our ESG offering for private banking clients, showing our full commitment to sustainable investments,” says Víctor Matarranz, global head of Santander Wealth Management & Insurance.
The Covid-19 outbreak has not changed the bank’s plans for further growth. Business continuity plans during the pandemic proved successful, allowing the bank to carry out day-to-day transactions without lowering standards. If anything, the pandemic has accelerated the bank’s digital transformation, examples of which include the implementation of developments in client onboarding and cybersecurity measures.
The private bank recently launched its ‘All Access’ global platform, which takes advantage or its presence in 10 different markets. “This global offer, alongside our focus in the private wealth segment and an increase in value added solutions, gave us a unique position in Latin America that our clients appreciate and value,” Mr Matarranz adds.
According to Guillermo Barreyra, head of Santander wealth management & insurance in Mexico, key drivers behind business growth in this market were the introduction of a totally renewed commercial system where product and commercial areas converge with common strategies, objectives and budgets, the strengthening of their ultra-high net worth segment, and a more robust product and service offering.
Winner: Union Bancaire Privée, UBP SA
Monaco, one of the key private banking battlegrounds in Europe, owes its success as a hub to the international clients who flit in and out of the principality for leisure or business.
“Monaco bank clients originate from a wide array of countries and the vast majority have elected to live here,” suggests Sérène El Masri, CEO of Union Bancaire Privée (UBP) Monaco. Most stayed there during lockdown, comforted by high levels of security and the way the authorities managed the health crisis. “We also saw a number of non-resident clients fly into Monaco to benefit from the quality of the environment,” she says.
This clientele includes east European and Russian, Italian, UK and Swiss contingents, with relocations more recently from the Middle East and northern Europe. “This makes Monaco both a global and a domestic financial centre,” she says.
Because many of these local residents are in fact globally-oriented families, the bank is expected to provide sophisticated financial advice and management, alongside basic banking services such as credit cards and an electronic payments system.
“Local investors can also be very active margin traders rather than asset allocators,” says Ms El Masri. “The banks capable of providing ongoing advice with structuring expertise, across all classes, and at institutional conditions, make all the difference here.”
Clients also own real estate globally, which they expect their bank to be able to finance. Given the multi-jurisdictional exposure of their assets and family members, they also want to speak to a banker who understands the legal and tax implications for their estates, she says. Global clients are also increasingly seeking advice on setting up family offices in Monaco.
“In a nutshell, to be relevant in this market, a private bank needs to get the simple stuff right and make the difference via financial innovation, balance sheet strength and wealth planning expertise,” she says.
This innovation has included thematic investment, with the most popular themes identifying “secular trends” like medical innovation, automotive technology and artificial intelligence, among others. Impact investment funds have also proved popular, with Monaco’s banks increasingly acting as co-investment providers in this space.
Winner: ANZ New Zealand Private Bank
Focus on client service and strong investment returns contributed to assets under management growth and substantial net new money inflows at ANZ New Zealand Private Bank last year.
Investment portfolios across all risk profiles “significantly exceeded” their performance objectives and the ability to meet client needs was reflected in high client satisfaction scores. Some 91% of the bank’s clients are very satisfied with the service and nine out of 10 would recommend the institution to others.
A continued focus on staff development, knowledge sharing platforms and a new digital learning platform also helped deliver “an excellent service to clients”, explains Craig Mulholland, managing director of wealth and private bank.
The new professional development fund offers external development opportunities such as university study, resilience and women’s leadership. Bankers are now also equipped with large screen iPad Pros, so they can present up-to-date information and scenarios when meeting with clients.
The enhancement of digital capabilities and the strength of the business model allowed the bank to deliver uninterrupted service during the lockdown period. “The pandemic has been a reminder of the importance of regular testing of business continuity plans, and of ensuring staff have the infrastructure and hardware to quickly adapt to working from home,” states Mr Mulholland. “We regularly test our systems and this was evident in the fact we were operational within 24 hours.”
The decision to remove sales targets for all ANZ private staff, including those in management roles, ensures staff are “focused solely on the best outcomes for our clients”.
The bank has developed a new climate change framework as part of its responsible investment approach. This ensures client portfolios are both resilient to the risks of climate change and are also positioned to take advantage of new opportunities in the transition to a lower-carbon world.
Winner: Standard Bank Wealth and Investment
Standard Bank Wealth and Investment’s geographical footprint extends across Africa and Europe, with offices in South Africa, Nigeria, Ghana, Mauritius, Uganda, London and Jersey.
The bank offers clients holistic solutions to meet their on- and offshore financial planning needs. These include a comprehensive range of investment products, from execution-only stockbroking to advisory services, and from fund solutions to discretionary asset management.
Its wealth management philosophy centres on managing, growing and protecting the generational wealth of its clients and their families. Its value proposition is built around a ‘Wealth Quotient’ concept, designed to identify unique client requirements to cater for every stage of life.
Building on this concept, the bank has implemented its insight-led ‘Challenger’ sales model, which provides clients with solutions that are directly applicable to them, and unique to their immediate personal and family wealth needs.
Ongoing investment in technology has led to the introduction of a number of digital innovations, such as the launch of the My360 app. The app provides a consolidated view of a client’s entire financial life across more than 20,000 global financial institutions, from one touch point.
“Clients can track and access asset, liability and risk cover regardless of the institution, geography or the insurer where accounts reside,” explains Busola Jejelowo, head, wealth and investment, at Standard Bank in Nigeria. “We have a few more digital innovations in the pipeline which we look forward to rolling out in the near future.”
In response to the Covid-19 crisis, and at the onset of the initial government-led lockdowns, the bank introduced a raft of relief measures for both retail and business clients to assist with mitigating the impacts of the pandemic. “We maintain open lines of communication with our clients and stand ready to assist where necessary,” she adds.
Winner: Bank Muscat
As the economies of Oman and the GCC region continue to transition to become less oil-dependent, the private banking sector is having to adapt to the requirements of a new generation of clients, with different sources of wealth.
Bank Muscat is geared up to respond to the changing needs of new businesses and clients. A focus on closer engagement with customers, new client acquisition, and the scaling up of digital channels to accommodate customer transition from physical channels, were the key drivers behind the bank’s growth in 2019.
The bank offers a diversified suite of products and services to clients spread across geographies and asset classes, including equities, fixed income, mutual funds and alternatives. Although client investment portfolios still favour fixed income instruments, the current low yield environment has resulted in a greater need for diversification.
“Customers are looking to diversify their portfolios towards gold, international equities and real estate as low interest rates are expected to prevail in the near future,” says Abdulnasir Al Raisi, deputy general manager, premier banking. “ESG is being selectively looked at by a few investors, however diversification in asset classes as mentioned previously is what is being followed by most investors.”
During the Covid-19 outbreak, the bank continued operating in shifts to support all customers and their transactions, while simultaneously helping customers to adapt to digital channels faster.
“Covid-19 did bring a stop to normal business activity in the economy and also the bank’s business. As the economy gets back into revival mode, the bank is handholding customers in terms of restructuring their loan repayments, to accommodate the disruption in cash flows in certain businesses,” he adds.
Looking forward, and as the region’s economy continues to evolve, Mr Al Raisi expects the bank to be “a key pillar in the sustained growth of Oman’s economy in the coming decade”.
Winner: BNP Paribas Bank Polska SA
With a cohort of at least five strong players, Poland is one of Europe’s more competitive private banking markets, where the crown of best firm has changed hands several times in recent years.
BNP Paribas, now overseeing €3bn ($3.5bn) in client assets, has significantly boosted its position in this growing market by recently purchasing and merging Raiffeisen Bank Polska with the BGZ subsidiary it acquired in 2014.
As in other parts of the BNP Paribas empire, there is a marked emphasis for clients on education and networking, facilitating attendance at programmes co-ordinated by Stanford University in the US and Cambridge University in the UK.
Clients are also invited to attend international tennis tournaments sponsored by the BNP Paribas group, including Roland Garros, the Fed Cup, Davis Cup and multiple local events.
Despite nominal independence in their regions, these BNP Paribas subsidiaries have a huge advantage over pure local players, as they are able to leverage group expertise and resources from Paris and other key hubs.
“We have a remarkable market share in the Polish wealth management space, where we see huge opportunities,” says Vincent Lecomte, CEO of BNP Paribas Wealth Management. “There are a lot of successful entrepreneurs in Poland. Co-operation will be essential with our corporate banking team and I am optimistic that there will be much more to come.”
Winner: BPI
Key differentiators highlighting BPI against competing Portuguese wealth managers include client segmentation and digital transformation, according to Antonio Luna Vaz, director general of private banking at BPI in Lisbon.
“Covid-19 has made digital transformation one of our main priorities, as it is the best, most efficient way to communicate with clients through this pandemic,” says Mr Luna Vaz, who has been busy integrating his Portuguese operation, running $9bn in client assets, into Caixa’s much broader and more advanced platforms, since the Spanish bank’s purchase of BPI. “The evolution BPI has made in the past six months in this field is not comparable to any other moment in time. This allowed us to keep close to clients and to continue working in this extremely difficult environment.”
Integrating many functions with the parent institution has helped boost profitability as areas such as structured products, fund selection and independent advisory improve their efficiency.
While foundations and small institutions have in the past been a particular target of BPI’s private client operation, a more recent focus has aimed to attract non-residents, who may typically be using the bank’s Luxembourg platform. In particular, BPI Private deals with Brazilian clients and those from other Portuguese-speaking countries, serviced by specialised regional teams.
Winner: Friedrich Wilhelm Raiffeisen Romania
Headquartered in Vienna, Raiffeisen Bank International offers private banking and wealth management services in central and eastern Europe and Russia.
Private banking services in Romania are offered via the Friedrich Wilhelm Raiffeisen (FWR) brand. Over the past few years, brand awareness in the country has been increasing steadily, helping the consolidation of the bank as one of the leading providers of private banking services in Romania.
“Last year was part of a period during which Friedrich Wilhelm Raiffeisen in Romania reached maturity in terms of client awareness, and most of our actions during 2019 reflected this,” explains Adrian-Florin Negru, head of FWR in Romania.
In order to attract new clients, FWR has been active organising lifestyle and business events, which targeted the three main categories of clients: existing clients, referrals from existing clients and corporate referrals.
The bank has continued to expand its investment product offering. This year, and in order to meet client demand for more sustainable investment solutions, FWR launched its first ESG product in Romania. The fund, a locally managed funds of funds, gives clients access to the largest asset managers in the ESG space worldwide. “This idea, originated in Friedrich Wilhelm Raiffeisen Romania, was implemented with the help of our local asset management company, and is sold exclusively to private banking customers,” Mr Negru explains.
In the second part of 2019, the business pushed forward the local integration of a new financial advisory tool, which allows the bank to provide advisory services under the MiFID II directive, as well as consolidating all reporting needs.
Winner: DBS Bank
DBS has launched several new initiatives aimed at deepening client engagement, strengthening its wealth planning proposition, while continuing to build on training and digital capabilities. These all helped generate 16% growth in wealth income last year, while overall wealth management assets under management grew 11% to S$245bn ($181bn).
To meet rising client demand, in 2019 DBS established a dedicated family office unit. “Singapore’s attraction as a family office hub is deepening,” says Joseph Poon, group head of DBS Private Bank. “Families both in and beyond Asia see Singapore as a lighthouse from which to view and engage in long-term opportunities in Asia. And DBS, with our deep understanding of the region’s domestic and cross-border business dynamics, regulations and cultural nuances, is well-placed to help them to navigate these markets.”
The bank has continued to innovate and invest in strengthening its digital capabilities across the front, middle and back-end. The RM Mobility platform, enabling relationship managers to track clients’ portfolios, perform reviews and provide advisory while working remotely, has proved key during the pandemic. DBS iWealth, which allows clients to monitor and manage their portfolios digitally, anywhere and anytime, has experienced a 23% growth in usage versus 2019.
Believing in ESG investments’ potential to outperform in the long-term, the bank has increased its offerings in ESG products, including mutual funds and discretionary portfolios.
“ESG is here to stay, and we’re committed to leading that agenda in Asia,” says Mr Poon. The bank set a target for ESG investments to reach 10% of its wealth assets under management in five years.
Since September 2019, DBS has been collaborating with its onshore business in Thailand to provide Thai high net worth individuals access to private banking offering in Singapore, aiming to double its wealth assets under management in Thailand to S$8bn by 2023. It is also looking at tapping into the onshore high net worth individuals’ increasing investment appetite in the Philippines. “While Singapore continues to be a core market for DBS, Asean is starting to shine brighter,” says Mr Poon.
Winner: Tatra banka
As the first private bank to be established in Slovakia, Tatra banka’s aspiration is to maintain its reputation as a market pioneer by introducing new technologies and innovations into the sector.
Two years ago, the bank was the first in the country to introduce face biometrics, to enable client onboarding and access to accounts. The bank, which also uses voice biometrics as an authorisation tool, has recently launched its chatbot ‘Adam’, Slovakia’s first virtual private banker. The Tatra banka app was also the first to be compatible with smartwatches, allowing clients to quickly access information about their latest transactions and balances.
Tatra offers clients a comprehensive range of wealth and asset management services, including investment consulting, all of which are fully in compliance with MiFID II regulations. An expert team of analysts and experienced portfolio managers choose best in class solutions from a universe of more than 5000 investment products managed by the world’s largest asset managers.
In addition, Tatra provides access to a large selection of alternative investments, including gold, real estate and investments in art, and it has recently expanded its ESG product offering.
Winner: Investec
Despite confining its physical operations to the UK and South Africa, Investec’s brand resonance means it remains attractive for many clients with an international outlook. “Our bases in the UK and South Africa give us the right developed and emerging market footprint, launchpad and outlook to be able to understand and service clients from different jurisdictions,” says Henry Blumenthal, chief executive of Investec Wealth & Investment.
More than some regional competitors, it has attached great priority to understanding and engaging with a new generation of client-s.
“Our approach to the young professional and millennial market focuses on two broad strategies — positioning and awareness of the Investec brand and, secondly, acquisition of new clients,” says Mr Blumenthal. “We have evolved our qualifying banking criteria to ensure that we target a diverse range of careers that are now attracting young people. Our goal is to put this group ahead of their peers through relevant content that speaks to their life stage, aspirations and values, as well as superior banking that would not typically be available to them.”
This segment, he says, is much more sceptical and critical of brands, demanding authenticity, transparency and diversity. “We believe that purpose-driven brands resonate far higher with a younger base and, as such, they aren’t necessarily loyal to a product but rather associate with what the brand represent-s.”
As a private bank, Investec is keen to attract young professionals who share the characteristics of existing clients. “We believe that Investec is an aspirational, but never an unattainable, brand and a trusted partner for young South Africans looking to start their journey to wealth creation,” says Mr Blumenthal.
Winner: CaixaBank
The biggest current transformation at Caixa-Bank, which profited from Spain’s extensive banking consolidation with several selective acquisitions, incorporated by an innovative technological platform, is moving clients to a fee-based service from a DIY model.
“I remember when people used to say that the Spanish don’t want to pay for advice, but that is nonsense — everyone wants to pay for something they believe is value added,” says Victor Allende, executive director of private banking at Caixa Bank. “We have a long way to go, but we are the leaders in Spain by far for fee-based structures. Our competitors are only just starting to instigate this approach.”
It is this focus on business models that he feels will define the key private banks on the Iberian peninsula, particularly when it comes to attracting talent. “You cannot change the portfolio constantly every month, that does not work,” he says. “You need a fee-based strategy in Spain.”
The aim for the ambitious Mr Allende is to stay ahead of the high quality local competition. “It is good when others are doing something similar to you,” he says. “But when you are the only one out there, doing something a little crazy, sometimes you think: ‘Am I doing the right thing, when everybody else is on the other side of the road?’ I used to worry about this, but now I know we are on the right side of the road with our transformation, fee-based structure and business intelligence.”
While there is a strong interest in the bank’s mutual funds franchise, engagement with real estate markets has fallen dramatically. “In the past, many Russians, Chinese, Latin American clients and customers from all over Europe were coming to us in Spain,” says Mr Allende. “But there are no questions from them today. They are waiting for a drop in prices.”
Winner: Taipei Fubon Commercial Bank
Two years ago, the board of Taipei Fubon Bank approved the creation of the Exclusive Banking Group, a client-centric service model catering to top-tier clients, under the brand ‘Fu Yu Heng Chuan’, or ‘prosperity across generations’.
Thanks to its collaboration with Lombard Odier, the bank became the first in Taiwan to forge an international alliance within the private banking sector. This combination of overseas and local resources has allowed the bank to expand its client base, while providing the best possible private banking services.
The business can draw on the Fubon Group’s wide-ranging subsidiaries, such as Fubon Life, Fubon Securities and Fubon Investment Trust Securities to create exclusive, tailor-made products and services for clients.
“In response to the diverse financial needs of high net worth clients, we have combined the insurance, investment and trust departments to provide them with customised investment allocation strategies that can meet their financial expectations and goals,” a spokesperson for the bank says.
The bank has recently created an exclusive client service model called ‘diamond team’. The model, run by senior bankers and supported by investment and family office advisers, transactors and client service providers, aims to deliver one-stop, customer-friendly solutions to meet clients’ wealth management and succession objectives.
In addition, private banking clients can benefit from access to many sectors beyond financial services where the Fubon Group has a presence, such as telecommunications and media, the arts and entertainment, luxury property development, and charitable endeavours.
Winner: Kasikornbank
Kasikornbank’s approach to private banking is based on the concept of ‘Perfect Wealth’, or wealth that comes from “the happiness of a worry-free life”. As such, its products and services are designed to free clients from any financial burdens.
A strategic alliance with Switzerland’s Lombard Odier allows Kasikornbank to provide a blend of local best practices and global expertise. Today, the bank offers Thai clients a wide range of services and investment solutions in line with international practices, including risk-based asset allocation, open architecture, family wealth planning, and others.
Although the digital transformation of Thailand’s private banking sector is remarkable, Thai clients still rely heavily on personal services provided by staff. Kasikornbank has focused efforts on delivering a smooth transition into the digital world for its clients, without losing sight of the level of service and human interaction they expect.
“A perfect blend between the traditional and digital worlds, as well as the integration of international standards and Thai-style service is the real uniqueness of Kasikornbank,” explains Jirawat Supornpaibul, private banking group head.
As a result of Covid-19, the bank has revised its advice, products and services, including the integration of its digital channels to support the way it connects with clients, and the constant monitoring of market movements, adjusting investment recommendations accordingly. “All in all, we would like clients to feel that we are here and always keep an eye on every change and trend,” he says.
Winner: Akbank Private Banking
Founded in 1948, Akbank is one of the largest players in the Turkish banking sector. In 2018, the private banking division joined forces with Ak Asset Management and Ak Investment, to provide private banking and investment services under the name Akbank Private Banking and Wealth Management.
In order to adapt the latest developments in digital technology for wealth management, Akbank has redesigned its processes. Its new business model is reflected in a new human-focused and technology-driven branch model which combines both physical and digital elements.
Since the start of the pandemic, Akbank took proactive measures to protect employees and customers and guarantee business continuity. “Thanks to the solid technology platform and existing business model, all private bankers are able to serve [clients] remotely, via online transaction platforms and online meeting tools with their iPads,” says Alp Keler, private banking and wealth management executive vice president.
Important developments in 2019 included the creation of a state-of-the-art mobile investment experience for clients, the further digitalisation of investment sales processes, and the development of innovative products aimed at maintaining leadership in investment services. The new Akbank Mobil allows clients to see their portfolios and easily invest in currencies, gold, equities, global sovereign and corporate bonds, and mutual funds.
“With the experience we have gained during the pandemic, we will continue to increase our digital offerings and enhance customer service using the opportunities provided by technology and digital banking,” he says. “We see digitalisation as an opportunity to improve client engagement and offer new products and services. We will be focusing on innovation which will contribute to greater efficiency and stronger client relationships,” Mr Keler adds.
Winner: Alfa-Bank Ukraine
Despite much criticism of Ukraine’s banking system, especially for corruption, the quality of service in private banking operations can sometimes exceed international standards, believes Rafal Juszczak, general manager, Alfa-Bank Ukraine.
At his bank, for instance, customers have access to a personal banker round the clock, without having to make an appointment in advance. “For most of the global banks this operational service level is all but impossible,” he suggests.
With the expectations of wealthy Ukrainians, all of whom would have had experience of Western institutions, growing quickly, Alfa-Bank has developed a range of services, from financial instruments and business structuring, to lifestyle management and entertainment.
When deciding which services to focus on, the bank’s management keeps a keen eye on the origins of Ukrainian wealth, once concentrated in the hands of a small number of industrial clans. Today, the money is more likely to come from larger numbers of smaller scale entrepreneurs, particularly in Ukraine’s burgeoning IT industry.
“Along with the fact that we now have more self-made businesspeople and IT entrepreneurs among our customers, it is worth mentioning that the customer base has also become much more gender-balanced,” says Mr Juszczak, who oversees $725m in client assets, which are growing steadily.
While investment offerings in Ukraine are still in their infancy, Alfa sees a growing demand for tailor-made investment strategies, shaped by customer risk profiles and investment horizons. Tax and succession planning are also on the rise due to a series of legislative changes expected in 2021.
The bank is owned by Luxembourg-based ABH Holdings. The main shareholders of this holding company include Mikhail Fridman, a Ukranian-born businessman holding both Russian and Israeli citizenship, and Kyiv-born oil billionaire German Khan, a citizen of Ukraine, Russia and Israel.
Winner: Bank of Singapore
Having had a presence in Dubai since 1996 through a representative office, Bank of Singapore, which manages $113bn in client assets globally, embarked on a new growth phase in 2017, with the opening of a branch in the Dubai International Financial Centre.
With more than 80 bankers in its three hubs (Singapore, Hong Kong and Dubai) dedicated to serving non-resident Indians and Gulf Co-operation Council wealthy clients, the bank experienced significant growth in recent years. In 2019, it also established a strategic partnership with onshore wealth manager Edelweiss Group in India.
The bank has built a suite of products and solutions tailored to the Middle East clientele, allowing it to “make inroads” into new markets in the Middle East, such as Saudi Arabia and Turkey.
With a strong focus on the global investors and family office (GIFO) segment globally, catering to clients with a net worth of more than $250m, the bank has expanded its product offerings to meet the needs of local clients in Dubai. For example, equity financing with UAE shares is a “successful” product and the bank is now looking to enhance this offering with local partners.
“We provide a differentiated offering and priority access to exclusive products and alternative investment opportunities to meet the unique needs of GIFO clients,” says Vikram Malhotra, global market head, south Asia and Middle East, Bank of Singapore. As a Singapore-headquartered bank, the bank is also in the “ideal position” to connect and help clients looking to set up their family office in Singapore.
“We will continue to navigate our clients seamlessly through markets in pursuit of global opportunities in this new decade,” he adds.
Winner: Northern Trust
The physical distancing necessitated by the onset of the Covid-19 pandemic has seen increasing numbers of deals contemplated by family offices which have worked together in the past, with new partnerships less frequent.
“Our global family office and private investment services have, during the Covid-19 crisis, created very meaningful ways to engage with our family office clients and help them share the value of our network,” suggests Steven L Fradkin, president, Northern Trust Wealth Management.
Investment themes are often identified and developed within the Northern Trust Institute, which houses the wealth manager’s intellectual capital. In this environment, they are combined with behavioural science patterns, before being introduced to clients.
These investment ideas are often deployed within Northern Trust’s ‘Goals Driven Wealth Management’ (GDWM) approach, taking up an increasing chunk of the bank’s $314bn under management. While Northern’s managed assets posted a 13% increase in 2019, the GDWM assets were 48% up.
“Importantly, our methodology positioned our clients to successfully navigate the markets amidst the uncertainty of Covid-19,” says Mr Fradkin.
Winner: Taishin Bank
Taishin Bank’s goal is to become the first choice for clients in Greater China and the Asia-Pacific region wishing to grow their wealth.
As such, the bank has dedicated time and resources to develop a robust platform supported by a professional team of financial consultants, a wide range of investment solutions, and the help of big data to better understand client needs.
“Using data to understand clients and their spending and saving habits is key for Taishin Bank’s services. To combine data knowledge and insights with a complete digital offering enables the bank to set itself apart from its competitors in the region,” says Samuel Lin, deputy CEO.
The bank serves high net worth individuals, family offices and corporates, offering a comprehensive range of wealth management solutions, including trust services, insurance and investments via an extensive range of products.
The unstoppable move towards a more digital banking world has driven the bank to build an omni-channel platform that serves clients 24 hours, through a combination of video conferencing, digital branches and other services such as face-to-face conversations via VTMs [video teller machines] during non-business hours.
Recently, the bank introduced its ‘Loyalty Programme 2.0’ and the concept of ‘Taishin Points’, aimed at improving the customer experience and promoting long-term loyalty. Launched during the pandemic, the programme encourages clients to increase their online transactions to earn points, which can be exchanged for VIP perks and exclusive benefits such as cash credits, travel or hotel vouchers.
Winner: Bank of America Private Bank
Bank of America’s team-based approach is key to establishing a deep understanding of clients’ values and objectives, prior to creating customised strategies. Such a team would typically include a private client adviser, supported by specialists in portfolio management, wealth strategy, philanthropy, credit, banking and trust services.
“Having served generations of families, we have the knowledge, resources and expertise in areas such as wealth strategy and investment management to serve their needs across generations,” says Jeff Busconi, chief operating officer and head of products and services at Bank of America Private Bank, which manages close to $500bn in private client assets.
The bank has observed changing priorities for its next generation of clients, accelerated by the Covid-19 pandemic, with an increased focus on transitioning wealth between generations and making sure this wealth is serving a positive purpose.
“The pandemic has brought many of our families closer together to have these conversations,” says Mr Busconi, with clients now more likely to think about managing their wealth from a whole family perspective. “It is an opportunity to look at everything from wealth and estate plans to trusts and investment.”
Among the topics being discussed by families are philanthropy and ethical investments, with clients increasingly addressing economic, environmental, social, racial and public health issues, which have been further exacerbated by the pandemic.
Each day the bank hosts around 2000 virtual client meetings, with these remote connections becoming a “way of life”, bringing together geographically dispersed families.
But physical meetings are still expected to return post-pandemic, with the bank envisioning a future blend of “high-tech and high-touch” techniques.
“Wealth management is inherently a people business,” says Mr Busconi. “The importance of human connections between clients and their advisers will always be essential.”
Winner: Westpac New Zealand
Westpac Private Wealth Management is a division of Westpac New Zealand, offering high net worth clients wealth management services and investment expertise from one of the largest financial institutions in the country.
As part of its growth strategy, the business has focused efforts on identifying new clients — with particular attention to new residents in New Zealand — as well as on building deeper connections with existing customers.
In terms of investment offerings, recent developments included the implementation of the measurement of ESG risk and carbon analysis for all equity portfolios, a review of their approach to alternative investments, and bringing the management of domestic fixed income strategies in-house, to provide enhanced risk management and increase oversight.
“We are committed to providing exceptional services to our clients and building deeper connections. We focus on the value we can add to our clients’ lives, allowing them to spend more time on the things that are important to them,” says Katie Christoffersen, head of private wealth management.
Ms Christoffersen explains that the coronavirus crisis triggered the rapid implementation of new processes to support clients. “We have robust business continuity plans so our clients can trust us to take care of their assets and protect their risk while they spend time focusing on rebuilding or growing their businesses, helping their children or spending less time in the office.”
Looking ahead, the bank has plans to continue working on the development of new processes, strengthening their wealth management product offering, and increasing client communications to save clients’ time and deliver targeted support.
Winner: JPMorgan Private Bank
Successful private banks that serve the largest and most complex families around the world are acutely focused on three things, according to JP Morgan Private Bank, which manages $672bn for its wealthy clients.
The first is delivery of investment performance, the second is risk management including cyber-security and safeguarding of assets, and third is top drawer client service. “To do all three well over time requires consistent investment in talent and technology, and a relentless focus on process improvement,” says Mary Callahan Erdoes, CEO, JPMorgan Asset & Wealth Management.
“We continue to invest in having the best people because we believe the way to win in this business is through people and technology, not people or technology,” says Ms Callahan Erdoes, who champions the bank’s “digital everything” approach.
With US clients plagued by a dual uncertainty caused by the US presidential election and Covid-19 pandemic, most are forced to be more focused on their long-term goals, requiring advice on how to stay on track with investments.
“We are seeing a lot of interest in short-term liquidity management solutions, yield-based investments, thematic equity strategies, estate planning tools and private equity, among other areas,” she says.
Winner: Société Générale Private Banking
While Société Générale has struggled globally in private banking, particularly since its withdrawal from Asia and entrenchment in markets closers to home, succession planning is a discipline in which its reputation has remained particularly strong. The bank describes it as “a necessity and a priority”.
It is currently concentrating on France and the UK as core markets, although the London-based subsidiary Kleinwort Hambros has recently been touted around prospective buyers for a sale.
Managing €119bn in client assets, the bank prides itself on offering a particularly broad range of services to entrepreneurs. Bankers insist on meeting children of their clients and pay particular attention to the drafting of the beneficiary clauses of life insurance contracts in order to adapt their wording to the family situation and their objectives.
In addition, SocGen offers dedicated training courses on financial, patrimonial and real estate themes to “train” the next generation for the management of family assets they will one day inherit.
Increasingly, a driving force for these younger clients is “giving meaning” to the assets they inherit, through responsible investments that are not only profitable, but also “make sense”. SocGen suggests a full “asset audit”, believing it is mandatory for a bank to put itself in the perspective of a global relationship.
This must extend beyond asset management in order for the business not to be impoverished, says the bank. “Indeed, the backbone, the DNA of Société Générale Private Banking is built around global asset management and anticipation.”
Winner: Wells Fargo Wealth & Investment Management
To effectively assist clients with succession planning, it is fundamental to understand their intent and what they are trying to accomplish, says Michael Liersch, head of advice and planning for Wells Fargo Wealth & Investment Management.
It is also crucial to look at wealth transfer from a variety of angles, including family dynamics, business and personal legacy, an approach that has been particularly successful during the Covid-19 crisis.
“During the pandemic, and all the surrounding uncertainty, our advisers’ ability to help clients articulate and communicate the ‘why’ and core values around their succession plan and business strategy has been in high demand,” reports Mr Liersch.
Focus on business transition, and evaluating whether entrepreneurs want to hold on to, or sell their businesses has been “an enormous value-add” to the relationship during the healthcare emergency. Similarly, clients have “highly appreciated” advisers’ support in assessing wealth strategies and structures that can fulfil, and maximise, the impact they would like to have with their business and wealth.
Potential tax law changes in the US around gifting to family members or changes in the step-up basis are another cause for concern, pushing high net worth clients to review their wealth plans.
The bank has expanded and deepened training of advisers to discuss topics such as how to reach-out to, and connect with clients during emotional and challenging times, or identify the best way to hold a family meeting via Zoom with 10, 20 or more family members.
“What we’ve found in these trainings and calls is that there is not a ‘one size fits all’ approach. Instead, we have our advisers share stories, what has worked, and what hasn’t worked, to inspire thoughtful interaction with each individual, couple and family that we serve,” Mr Liersch adds.
Winner: REYL & Cie
Geneva-based Reyl Group is able to offer clients a complete range of services comparable to its largest peers, says François Reyl, CEO of Reyl & Cie.
“It is through our entrepreneurial drive that the business has grown over the years to offer a full range of solutions through five business lines,” he says, proudly talking about the bank which now runs $14.5bn in client assets. These five departments are wealth management, entrepreneur and family office services (Efos), corporate advisory and structuring, asset services and asset management.
It is Efos clients which are particularly dear to Mr Reyl’s heart and the bank promises them special services, more typical of larger firms. These encompass the setting up of international mortgages, loans on works of art, restructuring companies and raising of corporate financing in debt or capital.
Indeed, five years ago, the new bank was not treated seriously by many in the Swiss lakeside city. But those doubters, who had previously dismissed radical Geneva boutiques that eventually grew to join the mainstream — including UBP and Banque Syz — are now begrudgingly recognising Reyl.
In fact Mr Reyl cannot resist a dig at the banks in the Swiss establishment. “We place great emphasis on building genuine partnerships with clients as opposed to one-way relationships based on selling undifferentiated products,” he says, outlining a philosophy of tailoring solutions to the unique real-life and financial needs of each client.
“We never rest on our laurels and Reyl constantly looks for ways to better serve our clients and meet their evolving needs,” he adds. This approach has led to the creation of Asteria Investment Managers, a dedicated impact investing affiliate, and Alpian, a new Swiss digital bank for the mass affluent client segment.
The bank has decided to work with similar, smaller institutions in the private equity sphere. “We see clear and defined demand for private equity from our clients,” says Mr Reyl. In order to meet this, the bank has partnered with Bank Pâris Bertrand Sturdza SA and Bordier & Cie to form Hermance Capital Partners — an investment boutique focusing on private equity, private debt and private real estate.
Winner: Boston Private
Boston Private prides itself on its goals-based approach, its “pure” fiduciary model, and the “depth of intellectual capital” it delivers, coupled with its boutique service. “Clients want partners who can help them solve complex wealth issues, not simply outperform the S&P Index. They want advice-driven service, not product-driven prescriptions, and to be assured that we put their interests first at all times,” states Paul Simons, president of private banking, wealth and trust at the US bank.
The bank, which has offices in Boston, New York, San Francisco, Los Angeles and Miami, aspires to be a “nationally recognised destination” for clients of substantial wealth and complexity of need, and advisers who serve them. “’Boutique’ is not a threshold issue, but a definition of how we serve our clients. We firmly believe it’s possible to both scale and maintain boutique-level service,” adds Mr Simons.
Making smart investments in technology and infrastructure is aligned, not at odds with, personal client service and relationships. This belief has been validated by the pandemic.
While before 2020 and pre-Covid the conversation had revolved around robo versus adviser, now there is recognition that digital tools can be used and technology leveraged, but banks can still have advice and personal relationships as a core value proposition. “Increased acceptance and comfort-level with technology, despite stemming from necessity, has actually created lasting positive change in how advisers and clients connect. We’ve learned that you can still deliver a high value, bespoke service in an increasingly remote environment.”
In 2019, Boston Private established a family office practice, to cater to the needs of family offices and closely-held family business. This is a client segment that “the financial services industry struggles to serve effectively”, largely because they are both ‘private clients’ and ‘institutional investors/business owners’.
Boston Private is able to serve ‘family enterprises’ with the scope of services they require but is not challenged by the highly segmented nature of large institutions, claims Mr Simons. “We find we’re able to offer services and add value where bigger players can’t or won’t.”
Winner: LGT
LGT, the bank owned by the Princely Family of Liechtenstein, has developed its offering of alternative investments for private clients over the past two decades, leveraging its experience in running its ‘Princely Strategy’. The bank’s flagship product allows clients to invest alongside the Princely Family and contains a substantial proportion of alternative investments.
Private markets, in particular, have become increasingly popular with wealthy clients, but how has the pandemic affected the outlook for this asset class?
“Well advised investors are increasingly looking at private markets as a way not only to enhance returns but also to access a unique opportunity set not available through public markets,” states Thomas Piske, CEO at LGT Private Banking.
Past crisis behaviour indicates that periods of rapid market dislocation and economic contraction will affect asset valuations, reduce distributions and increase capital calls, as fund managers draw from existing commitments to support their portfolio companies, explains Mr Piske. This can be very attractive for new commitments to the asset class, or open opportunities in private equity secondary deals or distressed private debt.
“Nevertheless, we believe timing is a secondary consideration when it comes to private markets due to the long holding period,” he adds. “Investors should consider long-term and disciplined investment plans when building private equity portfolios, rather than reacting to short-term market sentiment.”
Premia delivered by private markets over public markets have come under pressure over the years, but the significant performance differential between top quartile managers and the rest highlights the importance of manager selection and bottom-up investment analysis. “We believe that attractive premia can still be found in the asset class.”
LGT has also been highly commended for its offering of sustainable investing.
“Today, an increasing number of investors perceive sustainable investments as a long-term allocation towards higher quality investments that represents their values. The resilience of sustainable investing throughout the Covid-19 crisis also proves that it does not only benefit from the long bull market, but can also withstand the turbulences of a sudden crash,” says Mr Piske.
Winner: Bank J Safra Sarasin Ltd, Sarasin & Partners
Thematic investing, already popular among private investors before the coronavirus pandemic, has received a further boost by the healthcare emergency, which has accelerated many structural changes.
“Investors are looking for investment opportunities in sectors or themes that may benefit from the pandemic in the short term and be structural winners in the mid and long term too,” explains Pierin Menzli, head of thematic equities at Bank J Safra Sarasin.
Investment themes around human health and technology have particularly resonated with wealthy clients. “Along with incremental investments in healthcare infrastructure due to Covid-19, we expect an acceleration in many innovative medical areas, such as diagnostics and life science, renewed political will for reform, and the empowerment of patients as consumers through the increased use of consumer health devices and improved health monitoring,” says Mr Menzli.
Telehealth, the ability to talk to one’s doctor remotely, is likely to become a new standard interaction channel in the health space, complementing patient-doctor visits.
The pandemic has transformed the way we work, entertain ourselves, shop and socialise, fuelling demand for video calling, as well as social media, streaming and gaming. It has accelerated tech trends like AI, robotics and cybersecurity.
“A thematically-led investment process allows us to identify global companies that can thrive in this era of disruption,” says Jerry Thomas, head of global equities at asset manager Sarasin & Partners. “Where there is disruption there is opportunity, as investors typically underappreciate the duration or magnitude of change. The thematic approach allows us to find sources of growth and avoid structurally shrinking industries,” he adds.
Sustainability considerations play a key role in identifying winning business models of tomorrow. The bank’s four broad investment themes, ‘Green Transition’, ‘Future of Health’, ‘Changing Consumers’ and ‘Technology Disruption’ are closely connected and driven by environmental, social, technological and regulatory changes.
Winner: Quintet Private Bank
Quintet Private Bank, known as KBL European Private Bankers until early this year, is not new to transformations and rebranding. Founded in 1949 in Luxembourg, the bank has expanded across Europe through organic and inorganic growth since the 1980s, changing its name from KBL to KBL European Private Bankers in 2008, to reflect its pan-European vision and local roots.
Quintet defines itself as “Europe’s only network of boutique private banks, building on the heritage and track record of strong domestic brands, with deep local knowledge and cross-border expertise”. Owned by Precision Capital, an investment vehicle for Qatar’s royal family, today Quintet operates in 50 cities across Europe.
‘Quintet’ draws inspiration from classical music. “Quintet stands for the idea that human beings can achieve extraordinary things, and true harmony when they align behind a common purpose, whether that is in the context of a musical ensemble or a private banking business,” explains Jakob Stott, group CEO at Quintet Private Bank
Partnership and collaboration are key brand values, as the bank aspires to be “the most trusted fiduciary of family wealth”.
“Our purpose explains why we are in business and what we seek to achieve. It informs our brand, reminding us every day who we are and who we aspire to be. That is reflected in our culture of partnership.”
The bank’s leaders act as role models and “incentives, rewards and performance reviews all take strongly into account how we behave,” adds Mr Stott.
Putting clients’ interests first and working together to achieve that goal is the brand’s promise. “By explicitly making that promise, the cost of not delivering would be high,” he says.
The bank partners with West-Eastern Divan Orchestra, which gathers musicians from across the Middle East, embracing their differences and representing this partnership mindset.
Our judges, led by branding strategist Helen Westropp, rewarded Quintet for its distinctive brand values, culture, and story-telling behind the brand.
Winner: Coutts
Despite having shed its Asian and Swiss businesses due to group priorities, the 328-year old private banking business of Coutts still has global ambitions for servicing clients. “We are as committed as ever to growing our international client base for their UK needs,” says the bank’s CEO, Peter Flavel. “This is where we excel and have the expertise they seek.”
Behind the scenes, Mr Flavel has been working closely with the broader NatWest group, which it merged with in 1920. “It’s terrific to see the high level of new private bank clients now coming from our NatWest commercial banker referrals,” he says.
In addition, Coutts has been striving to revitalise its investment proposition, passing on cost savings to clients which have resulted from buying in new technology to improve efficiency.
But perhaps the most interesting factor in the bank’s development has been how it has attracted a new generation of clients despite its old school ethos and image. “I’m not sure there is a private bank which is more traditional than Coutts globally,” says Mr Flavel. “What that perception misses, however, is one of the reasons Coutts has been successful for so long. We were innovative from our beginning.”
The latest wave of this innovation has involved a huge change in how the brand has been marketed to clients, recognising that the sources of wealth creation have changed dramatically.
“We are adapting to these changes, and we now have specific teams and advisers dedicated to e-gaming, influencers, new media, VR/AR [virtual reality and augmented reality] and the like,” he says. “I am committed to ensure that we remain relevant to our clients and the aspirational brand that is Coutts.”
Winner: Banca Generali
Last year Banca Generali posted its best financial results in its history. Client assets surged by 15% to €69bn, fuelled by more than €5bn in net new money and remarkable asset performance, while operating profits rose by 41%.
Its comprehensive offering of wealth management services, quality of the advisers’ network and strong brand are key factors of the bank’s success, explains Gianmaria Mossa, CEO, Banca Generali.
Banca Generali, which is part of insurance Generali Group, is now Italy’s third biggest wealth management player, and the largest financial adviser-based private bank in the country.
In 2019, the bank completed the acquisition of Swiss-based boutique Valeur and investment boutique Nextam Partners, which also contributed to asset growth.
The bank relies on an ‘open banking ecosystem’, which facilitates the integration of services aimed at providing a holistic offering to wealthy families and entrepreneurs. This business model has continued to prove its worth during the pandemic, as the bank attracted more than €4bn in net new money in the first nine months of this year.
“Organic growth remains our priority,” says Mr Mossa, adding that when the right opportunities arise, ad-hoc acquisitions are also on the table.
Sustainable investing is proving to be an important growth factor. Demand for ESG investments has been such that the bank has already achieved its 2021 goal to reach 10% of its assets under management in ESG solutions.
Mr Mossa is looking to further expand the bank’s platform of ESG solutions, launched in February 2019 with investment adviser MainStreet Partners, as it allows private bankers to build portfolios that are “truly tailored to clients’ social interests”.
Through BG Saxo, the joint venture developed with Danish fintech Saxo Bank, Banca Generali offers an online trading platform which has experienced a significant boost this year, helping the firm to further diversify its revenues. The pandemic has accelerated the ongoing digitalisation of the bank, supporting a “substantial streamlining of bureaucracy and operations” for its 2,000 private bankers and wealth managers. “Digitalisation is one of the pillars that drive our business, but can never replace the core of private banking, which is represented by the relationship between the adviser and the client,” he says.
Winner: Industrial Bank
For the second year in a row, Industrial Bank emerged as the best performing bank from the KPI quantitative analysis carried out by PWM across all institutions taking part in this year’s awards. In 2019, the bank experienced an impressive 38% growth in operating profit, with number of clients rising more than 30%. Its assets under management surged 24% to $75bn, fuelled by significant net new money flows.
Industrial Bank has built a strong brand in the Chinese financial market, especially thanks to its risk management capability and expertise in the high-yield space, explains Jinguang Chen, vice president of Industrial Bank. Its diversified product offering, combined with dynamic asset allocation capabilities and investment advisory skills, with investment views delivered daily through mobile banking, have also proved key growth drivers.
In China, more than 50% of private banking clients are entrepreneurs, and these represent a target client segment for the bank, which offers them M&A financing, bond issuance and underwriting, in addition to wealth management services.
The bank prides itself on having pioneered the family trust business in China five years ago. There are more than 700 billionaires in the country, of which more than 60% are aged 50 or over, and transferring their wealth and business to their children is at the forefront of their minds.
“Family trust financial solutions are in great demand, the market is hugely developing and there are many opportunities for profit,” states Mr Chen.
Leveraging on its capabilities in investment banking, asset and wealth management, the bank has formed a ‘private bank family office’, while launching a new dedicated brand, ‘Xing Cheng Shi Jia’ (‘prosperity, succession for generations’) in 2019.
With more than CNY100tn ($15tn) in financial assets, the domestic wealth management market is huge. “There is a big room for commercial banks to develop in the private banking space in China,” says Mr Chen, acknowledging there is still “a big gap” between domestic commercial banks and advanced international investment banks, when it comes to asset management capabilities and advisory services.
- Best Private Bank for Business Continuity Plans (Covid-19)
- Best Private Bank for Global Families and Family Offices
- Best Private Bank for Customer Service
Winner: Citi Private Bank
Citi Private Bank increasingly focuses on capturing the financial and business interests of global families with tentacles in several locations on different continents. In the EMEA region alone, the bank identifies more than 35 different nationalities — active in international businesses including biotech, consumer electronics, aviation, hospitality, real estate and shipping — making up its private client book.
In addition, the bank is targeting particular pockets of cross-border oriented wealth. “There are many well-established cross-regional corridors where clients’ lifestyles and business interests naturally predispose them to an international view of the world with a requirement to manage assets and finances across countries and continents,” says Peter Charrington, New York-based global CEO of Citi Private Bank, responsible for assets of more than $300bn.
Among these groupings he highlights the Indian diaspora, with close links to the UK, UAE and Africa; Russians with interests in the UK and France; and the Middle East, which has close ties to both the UK and US.
Despite this apparent international perspective, many clients are still guilty of home bias, entailing “idiosyncratic country risk”, according to Mr Charrington, who sees his job as advising families about more diverse opportunities across classes and geographies.
To diversify from a traditional bias to income-producing prime real estate assets in London and New York, Citi is increasingly channelling more clients into opportunistic, value-added opportunities such as student housing and senior living, with a lower correlation to economic crises. Many clients have backed these themes, with Citi posting a $33bn net new money inflow in 2019.
“Opportunistic themes such as distressed hospitality are especially popular post-Covid-19,” says Mr Charrington. He also points to the pandemic’s influence on the proliferation of digital infrastructure such as data centres and masts, allowing investors to capitalise on accelerating growth in data and traffic globally.
The broader portfolio picture he paints is one of dramatically dispersed valuations, leading to both substantial investment opportunities and risks. In Citi’s view, massive government spending combined with Covid’s industrial impact has left some asset prices too high and vulnerable and others depressed and poised for a post-pandemic recovery.
While Citi made a fast move to remote working at the start of global lockdowns, many staff are returning to offices, with clients increasingly offered face-to-face meetings “in a controlled, safe environment”.
Winner: Banco do Brasil Private
Private banking is a people business and the training of private bankers plays a key role in attracting and retaining both talent and clients.
“Education is crucial to enhancing customer service quality and client experience, at every point of contact with the bank,” says Renato Proença Lopes, head of Banco do Brasil Private.
When new private bankers are brought in, often sourced from Banco do Brasil Premium, they go through an intensive training programme to acquire hard skills such as technical knowledge on products and services, but also improve soft ones, such as customer service and behaviour. Almost 80% of bankers at Banco do Brasil Private are certified financial planners.
The Corporate University of Banco do Brasil provides a wide range of courses, through a variety of channels aimed at meeting the strategic objectives and training needs of each department within the bank.
In addition to the general programme, training initiatives are tailored to the bankers’ individual needs, the specificities of the market in which they operate, and the profile of the clients they serve.
To attract and retain talent, in 2019 the private bank significantly increased its entry level salary, linking the variable segment to more objective criteria, such as business performance and customer satisfaction. These changes contributed to limit banker turnover to less than 10%.
In partnership with renowned higher education establishment Fundação Getúlio Vargas, the Brazilian bank has developed an MBA programme for its private bankers. It also offers several programmes to enhance and develop leadership skills, including one aimed specifically at women.
Regular customer surveys monitor the level of customer satisfaction. “In most recent surveys, we have observed continuous improvement around investment advisory and relationship management, which indicates the initiatives adopted are bringing the expected results,” says Mauro Ribeiro Neto, chief corporate officer. The net promoter score, the percentage of customers rating their likelihood to recommend the bank, continues to improve.
