International wealth managers go global with new intiatives

Growth, growth and more growth are clearly the top three strategic priorities for wealth managers in 2006. Several international players announced global initiatives last month, including AIG, BNP Paribas and, of course, Credit Suisse and UBS. Even Barclays, which has long punched well below its weight on the international wealth management stage, may be starting to look at the global picture. Of all these firms, AIG’s revelation that it is planning a worldwide expansion programme was perhaps the most startling. Historically, the insurance giant has run a modest private banking book from its Zurich outpost, with some $14bn (£11.8bn) under management and a handful of rep offices in Asia and Latin America. AIG plans to increase those assets under management to $100bn and build a private banking network that will include the US, Asia, Latin America, Eastern Europe and Japan. Eduardo Leemann, chief executive of AIG Private Banking in Zurich, will lead the drive in his new role as head of AIG Wealth Management. AIG Wealth Management will be a division of AIG Global Investment Group and the expansion will include acquisitions and organic growth. Peter Wild, currently chief operating officer in Zurich, will take over as chief executive of the Swiss business. Meanwhile, BNP Paribas is focussing on the Middle East for the second phase in its global drive. The French bank plans to double the assets under management for its Middle Eastern private banking business to $10bn over the course of the next three years. The bank will set up private banking teams at existing offices in Bahrain, Abu Dhabi, Kuwait, Saudi Arabia, Qatar and Lebanon. In addition, it will also set up dedicated private banking at new branches in Riyadh and Kuwait. In total the bank plans to have 45 staff offering asset management services to high net worth individuals across the region. Phase one, executed in Q4 2005, saw the bank building up in Asia, with a stake in China’s Nanjing City Commercial Bank and India’s Sundaram Asset Management. The bank also launched a branch in Taiwan. At their annual analysts’ presentaions UBS and Credit Suisse, outlined that Europe and Asia will be their main areas of focus this year – no surprises there. We also anticipate that Barclays will shortly step up to the plate with a global campaign by the end of 2006. Last month, Barclays Wealth Management poached Ian Ewart from HSBC Private Bank, where he was global head of marketing and communications, to undertake a similar role, reporting to Tom Kalaris, chief executive of Barclays Wealth Management. Mr Ewart, was instrumental in much of the brand integration that has been undertaken at HSBC Private Bank to create the current global/local strategy under the ‘Assume Nothing’ tag line. The new Barclays Wealth Management division faces a similar challenge with a growing portfolio of subsidiary brands. At launch, the division included Barclays Private Bank, International Banking, Barclays Financial Planning, Gerrard and Barclays Stockbrokers. Barclays Life and Barclays Investment Services were added to the roster last month with the retirement of Ray Greenshields, managing director of its Barclays UK Wealth Solutions unit. Barclays Wealth Management was forged last year on a newly-minted product platform that combined Barclays Global Investors and Barclays Capital. The product capability is undoubtedly world class. However, from a distribution perspective, only Barclays Private Bank and Barclays Stockbrokers currently have any brand potential on the international stage. Mr Ewart’s appointment and Mr Greenshield’s retirement seem to signal a changing of the guard, but at the end of last year, Mike Pedersen, head of private banking, and Philip Morris, chief investment officer of the private bank, also stepped aside. Mr Pedersen is due back from his sabbatical later this year, but we would expect the private bank he re-joins to look very different from the one that he left. Cath Tillotson is head of research at wealth management strategy think tank Scorpio Partnership