Global Private Banking Awards 2010

PWM’s second annual Global Private Banking Awards have seen a strong focus among wealth managers in most regions on operational strength, asset allocation and how these topics are communicated by client advisers to their wealthy customers.

Enough time has now passed since the onset of the financial crisis for banks to make some sort of decision on how their business model will work in the future.

“This year’s submissions showed a huge degree of introspection in the wake of the credit crunch,” notes Amin Rajan, visiting professor at Cass Business School and CEO of the Create consultancy, advising banks and asset managers. “Wealth managers are developing a new narrative on what they stand for and what they can deliver.”

Our researchers contacted 350 institutions across Europe, Asia, the Middle East and North and South America in the four-month period prior to the judging of the awards. The judges first examined quantitative data from the entrants, including three years of figures detailing capital adequacy requirements, assets under management, asset flow patterns, net profits, cost-income ratios, adviser-to-client ratios and performance figures for managed portfolios.

Following this, submissions on business and growth strategies, portfolio management, innovation, communication with clients, socially responsible investments, technology, use of third-party products and remuneration and fee structures were all observed and compared. The banks’ relative approaches to operations and the level of seriousness with which they tackled due diligence and counterparty risk measures were also crucial.

After the shortlists had been drawn up, the panel debated and voted on the winners. Quantitative data was verified and augmented by wealth management think-tank Scorpio Partnership, which also deployed a proprietary formula to compute – using a series of Key Performance Indicators – which bank had employed the Best Leadership team. The winner was Credit Suisse. These figures were then compared with last year’s KPI numbers to find the bank with the Most Improved Leadership team, Clariden Leu.

The concept of regional expansion, of being close to clients in their financial and cultural needs, drew particularly keen responses from the judges. “Following the financial crisis, it has become increasingly evident to top management of the committed wealth management providers that despite previously miserable investment performances, they must strengthen not only their internal controls and service offerings, but also embed themselves more deeply with their clients, catering to their local, home-country needs,” says Ray Soudah, chairman of MilleniumAssociates, one of Europe’s premier M&A consultancies. “Providers who have local presences, especially in growing markets like Asia, the Middle East and other emerging regions, will increasingly feature as improving their rankings in these awards.”

A series of strong entries arrived from developing market-based banks operating in China, Taiwan, Latin America, Turkey and Central and Eastern Europe. Among the legion of home-grown banks in developing countries rising through the rankings were Itaú, China Merchants Bank, DBS and HDFC, who took the respective honours in the hotly contested territories of Latin America, China, Singapore and India. HSBC retained supremacy in the Middle East and Hong Kong, while still contending globally, in Asia and in Turkey.

“Banks in Asia have benefited from economic growth that has led the world and lessons learned from the region’s own financial crisis more than a decade ago,” says Simeon Fowler, CEO, Fox Partnership in Singapore.

If anything, the judges noticed a slight falling back and complacency from several institutions active in the back gardens of Europe’s private banking heartlands. That said there was a particularly strong line-up of candidates from the Americas, where private banks have set their sights on growth. Over the last 12 month, many banks there have tweaked their business models. Citi, for instance, has embarked on a huge hiring spree of North American advisers, while now focusing on $25m (€18m) plus clients.

Others such as Northern Trust have started to experiment with social media and new technologies to better reach their clients. “Clearly, many banks see the biggest opportunities at the higher end of the wealth segments,” says Alois Pirker of Aite Group, a judge known for his expertise in the North American market. “This is the area where most of the wealth creation has taken place in recent years.”

Also pleasing was the much larger range of institutions chosen by the judges, which reflects higher standards across the board and the willingness of many banks to create a regional niche for themselves, rather than trying to be all things to all people and having their efforts bulldozed away by the global juggernauts. It has become more difficult for smaller names, without global or deep regional presence, to fight their way through the process. Even the intense nature of the application process, with most banks taking several weeks to complete the questionnaire, immediately sidelines those institutions without the capability or desire to generate the type of market data and qualitative observations their clients, collaborators and counterparties would require.

Among those institutions with a particularly strong showing were Citi, selected as Best Global Private Bank, ahead of last year’s winner HSBC and challenger JP Morgan; Northern Trust, which not only retained its title as Best Private Bank in North America, closely tracked by Citi and JP Morgan, but also scooped the Best Private Bank for Innovation; Standard Chartered, judged Best Private Bank in Asia; and Julius Baer, beating Vontobel to Best Private Bank in Switzerland and retaining its Best Private Banking Strategy for Growth award from 2009.

UBS, a giant in transition, was hit hardest by the global crisis, reputation issues from its investment bank and a damaging dispute with US authorities, leading to significant customer outflows. Yet despite this turmoil, the global bank was highly commended in Switzerland, Central and Eastern Euope and the Middle East. Moreover, the bank’s recently recruited CEO, Oswald Grübel, previously responsible for successes at Zurich-based rival Credit Suisse, was voted Private Banking Personality of the Year, in recognition of not just his high profile in the Swiss market, but his persistent and successful attempts to turn the institution round, despite the tide often flowing against him.

Those banks entering the awards were asked to nominate favoured third-party service providers. Franklin Templeton won the coveted title of Best Emerging Market Fund Management Group hands down, iShares took the ETF Provider title in a similar fashion. But Schroders took BlackRock to a tie-break for Best Fund Management Group, with the US giant eventually beating the UK stalwart in a dramatic debate and judges’ final vote.

Oswald Grübel, UBS

Best Global Private Bank

Winner: Citi

Citi Private Bank’s change of business model, with a new concentration on clients in the $25m plus assets bracket has enabled it to reduce its key adviser to client ratio to an industry-beating 30:1.

Having disposed of asset management and brokerage businesses, the bank is keen on integrating private banking with investment banking and offering FX, loan and other institutional style services to cross-border ultra high net worth individuals. Family offices increasingly get special treatment in their own division.

Now one of the few global banks working totally on an open architecture basis, Citi is currently working hard to promote its HedgeForum services, through which it offers externally managed hedge funds in highlighted areas such as distressed US real estate with a keenly negotiated, simplified fee schedule. “I am excited about this chance to put new markets down on the table and drive it from the client’s interest, changing the way the private banking world works,” says Jane Fraser, appointed CEO of Citi Private Bank in 2009.

She has been hiring aggressively across all divisions. This includes operations, where due diligence teams have been significantly boosted across Asia, the US, Latin America and Europe. She is adamant that these research teams, while supporting private bankers, will be kept totally separate from sales people. “If you are going to give clients access to the best opportunities, you need to make sure you have the best due diligence teams out there,” says Ms Fraser. YB

Best Private Bank in Central & Eastern Europe

Winner: OTP Private Banking

Since introducing a dedicated value proposition for high net worth investors in 2002, OTP Private Banking in Hungary has seen the number of clients double to almost 16,000, and its assets under management grow five fold to €2.1bn, which account for 40 per cent of the total wealth management assets in the country.

Today, the strategy of the bank, a “safe haven” retail institution in the CEE region, is to preserve its incumbent position, while focusing on product and service innovation. “Our most challenging task is to find a balance between the need for launching innovative products and services while liaising with our clients, who have a more conservative investment attitude than the market average,” explains András Takács, managing director, wealth and investment management at the bank.

In order to drive profits growth, heavily affected by decreasing revenue margins, OTP implemented cost saving strategies aimed at allocating its resources more efficiently.

These included the set-up of a middle office, the development of a headcount model which aims at finding the right balance between generating profit margins and providing adequate client care, by estimating the optimal time an adviser should spend with each client. By increasing threshold limits – to €75,000 and €265,000 for its private banking and its prestige private banking customers respectively – the bank stated its intention to focus on the wealthier and more valuable segments. Different sub-segments are offered different private banking packages, while the lower part of the client pyramid is now given a more standardised service. ET

Best Private Bank in the Middle East

and

Best Private Bank in Hong Kong

Winner: HSBC

HSBC says Hong Kong and the Middle East are “important contributors” to the $7bn of net new money reported by the Private Bank in the first half of 2010, with intragroup referrals playing a key part in the growth.

One new development has been the Family Office Partnership between the bank’s Private Banking, Global Banking and Global Markets divisions. “Asia and the Middle East, where the private sector plays the driving role in business, are at the heart of this recently formed partnership,” claims Chris Meares, chief executive for Group Private Banking at HSBC.

He has presided over a difficult period for the bank. Earlier this year, the head of his Swiss business “unreservedly” apologised to 24,000 clients, whose personal details had been stolen by a former employee. Luckily for Mr Meares, the Hong Kong business has started to deliver assets after significant investments.

The group has laid down expansion in Russia, Asia, Latin America and the Middle East as its key private banking priorities and continues to build its hedge fund, private equity and real estate alternatives business, currently managing $30bn. YB

Best Private Bank in Asia

Winner: Standard Chartered

Since the opening of its global hub in Singapore in May 2007, The Standard Chartered Private Bank has experienced a rapid organic growth, which was strengthened by the acquisition in 2008 of American Express Bank. With 31 offices across Asia, Africa, and the Middle East, its key markets, as well as the Americas and Europe. The Private Bank employs 1300 people, including 400 relationship managers. Two thirds of its total $43bn in client assets are sourced from Asia.

“Over the past few years, we have outperformed the market growth considerably and we continue to do that. We are proving our strengths in a very short amount of time,” says Shayne Nelson, the new Singapore-based CEO & global head at Standard Chartered, previously CEO of Middle East and North Africa. “One of the secrets to our success is around our heritage and deep trust from our local communities.”

In Asia, Africa and the Middle East, the Private Bank can leverage its deep roots and the 150 plus year heritage of international banking experience. Formed in 1969 through a merger of two banks – The Standard Bank of British South Africa and the Chartered Bank of India, Australia and China – Standard Chartered’s international network now spans over 70 countries and it has a strong long-standing local presence in the emerging markets.

In 2009, the Private Bank’s AUM increased by 26 per cent in Asia and 12 per cent globally, and its client base grew by 25 per cent. Similar growth rates were recorded during the first six months of 2010. “Standard Chartered did attract money from other institutions through that difficult phase of the world economy, thanks to its brand presence and longevity and the bank’s capital strength, but as important was its capacity to leverage our existing client base,” says Mr Nelson.

A strong believer in the value of niche segmentation, Standard Chartered has built dedicated services for several segments, such as global Indians, global Australian executives and global Korean expatriates. Having formed an alliance with Entrepreneurs Organisation, it is now preparing to launch the entrepreneurs segment too. “The markets we are operating in are generating a massive amount of entrepreneurs and new wealth for Asia, and through our network, we have the capacity to tap that,” he says. ET

Su Shan Tan, DBS

Best Private Bank in North America

and

Best Private Bank for Innovation

Winner: Northern Trust

When it comes to innovation, few wealth managers get close to Chicago, US-based Northern Trust. Its Lesbian, Gay Bisexual, Transgender (LGBT) & Non-Traditional Family Practice was piloted in 2008 and officially launched in 2010. The bank sees this as directly following its 120-year fiduciary heritage, where client interests are always put first.

Given the lack of legal protection of same-sex relationships, there is a greater potential for LGBT estate plans to be challenged by outside parties and the bank aims to make sure the wishes of this growing group of wealthy clients are fulfilled after their death.

Northern Trust has had a formal networking group, where clients can meet and swap experiences about their private bankers and investment practices, since 1990, with a similar set-up available for family offices. These forums are gradually moving on-line, with Northern Trust’s proprietary versions of popular social networking sites.

“We frequently see dozens of our wealthiest families interacting,” says Sherry Barrat, President of Northern Trust’s Personal Financial Services Group, managing assets worth more than $140bn and holding nearly $330bn in custody.

“They have candid discussions about topics of mutual concern and interest. These days, the focus is on risk management.”

Since the crisis, 18 risk management professionals and a chief risk officer have been taken on. A guidance list of approved fund products is circulated daily among private bankers and portfolio managers, although there has been a recent trend to offering more internally manufactured products to clients. “In a post-crisis low-return environment, we believe lower-cost proprietary capabilities often have an advantage,” says Mr Barrat.

As well as increased monitoring for red flags and an emphasis on daily liquidity, asset allocation has been overhauled to decrease correlation of assets, with allocations to gold, cash, emerging markets and high yield bonds vastly increased. YB

Best Private Bank in Latin America

Winner: Itaú private bank

Itaú Unibanco, based in São Paulo, Brazil, is a regional bank breaking the mould. It has a strong local presence in Latin American countries such as Argentina, Chile, Paraguay and Uruguay, as well as around a dozen international offices.

“Itaú is fast becoming a force to be reckoned with on the international wealth stage,” says awards judge, Sebastian Dovey, Managing Partner of Scorpio Partnership.

The creation of Itaú Unibanco in November 2008 from the merger of two large Brazilian banks, Itaú and Unibanco has created the largest privately-controlled bank in the Southern Hemisphere with the scale, expertise and capital base to increase its range of products.

“We are the dominant bank in Brazil with between 25-30 per cent of market share,” says João Medeiros, CEO of Itaú Private Bank International. “The idea is to maintain a dominant position in domestic markets, but also to put a big effort into the regional marketplace. We have just opened a branch in Switzerland – the first Latin American bank to do so – and we see this as the last of our three main pillars – to have a presence in Europe, the US and Latin America.”

“We always try to tell clients that as they usually have a large proportion of their wealth caught up in their country of origin, that they should look out at their global investments from the perspective of where they are. This makes us distinctive, as we can give advice on global investments but our point of departure is local.”

Last year a team was established to focus on the development of innovation projects to shape the bank’s business model in the future years, and to date this has produced an integrated tool for portfolio management and client information, a project to research the relationship of future clients to their money, and a Private Bank of the Future Project based on designing a customer-centered experience. CJ

Best Private Bank in China

Winner: China Merchants Bank

Since opening its first private banking branch in Shenzhen in 2007, China Merchants Bank (CMB) has enjoyed an annual growth rate of 35 per cent, to reach 12,000 clients and Rmb250bn (€27bn) in total managed assets. The bank now operates from 19 private banking centres in 15 Chinese cities. “The rapid growth of China’s economy and the accelerated accumulation of wealth is a key driver for the development of private banking in China and a big opportunity for CMB,” says Jian Jun Liu, general manager, retail banking at the firm.

But the private banking industry can develop successfully only by drawing on the private banking experience of more advanced foreign countries and combining it with a deep understanding of the Chinese culture, while adapting to the domestic regulatory requirements, warns Mr Liu. “CMB strives to achieve the combination of local blood with a global perspective.”

The most significant characteristic of the CMB private banking service is its ability to thoroughly understand the real needs of its wealthy customers, providing them with personalised service, while respecting their privacy, explains Mr Liu.

Although the main sources of the private bank’s revenue derive mainly from the margin income from deposits and loans, as well as the sales proceeds from financial products, the bank boasts a broad product platform, mainly focused on low-risk investment products, as well as medium/high risk equity products. It also includes a small offering of alternative investments, such as private equity, real estate investment funds, as well as the more exotic art and wine investments.

“We can also purchase products from the best domestic and foreign asset managers, but I believe what is key is asset allocation, not the different product lines. The real differentiator of the private bank is its unique investment advisory service,” says Mr Liu. ET

Best Private Bank in Singapore

Winner: DBS

What sets DBS apart from its peers is a strong focus on its Asian connectivity, Asian insights and Asian relationships, according to Su Shan Tan, who joined the firm as group head of wealth management in July. “Our roots are deeply entrenched in Singapore, as we continue to seek growth in the region. The wealth creation story in Asia is strong and we want to be a major player in this space.”

DBS’ 28 per cent ownership by Temasek Holdings, Singapore Sovereign Wealth Fund, the bank’s strong balance sheet and pedigree have proven to be key in providing clients with piece of mind and security, says Ms Tan. The bank reported S$1.5bn ($1.2bn) in net new money during 2009, as individuals moved their wealth from troubled foreign banks back to safety.

“We are a solution-driven private bank with excellent Asian connectivity and clients come to us for cutting edge Asian solutions,” she says. For example, DBS was the first private bank to launch an RMB fund, the China Rail Network Opportunities Fund, exclusively for its clients earlier this year, she explains.

With regional booking centres in Hong Kong, Singapore and China, DBS is a global bank with an extensive corporate and commercial banking franchise in the region, which prides itself on offering holistic solutions to the wealth management needs of its Asian-based customers. The bank has also established a foothold in the Asian global capital markets business: private banking clients are introduced to equity, or debt capital market opportunities, as well as private equity, M&A and structured finance solutions. ET

Demet Apak Sermet, Garanti

Best Private Bank in India

Winner: HDFC Bank

Despite the recent financial crisis, HDFC Bank’s private banking business grew three-fold in the past three years. Nitin Rao, executive vice president, Private Banking and Third Party products at HDFC Bank, the second largest private sector bank in India, says that this growth reflects the bank’s consistent focus on providing good advice to their customers. “Following the strategy of giving good advice from even before the financial crisis, resulted in more customers coming to us at a time when markets had collapsed and customer confidence was low,” he explains.

In the coming months, Mr Rao says that the bank is focusing on transparency and is continuing with its traditional conservative approach. “We refrain from high risk asset categories and funds which tend to offer abnormally high returns. We build long term portfolios rather than encourage short-term churn.”

The bank’s value proposition revolves around integrating values of the HDFC Group, asset allocation with a focus on equities and product innovation across banking and investments. Unlike most other private banks which focus primarily on the top few cities, a unique aspect of HDFC Bank’s strategy is to tap the wealth beyond these Tier-1 cities. It has adopted a hub and spoke model where the offices in the larger cities are used to target the nearby smaller centres.

While HDFC Bank’s private banking team is fairly stable with senior advisers being around for more than five years and attrition rate being less than 10 percent, the bank faces the same problem that dogs the rest of the industry – talent. Since the wealth management and private banking industry is still relatively young in India, there is a shortage of experienced relationship managers.

One of the biggest challenges in the coming months, says Mr Rao, is to ensure that advice is consistently delivered to customers. He says the challenge is to groom relationship managers with a long term vision to understand the cyclical nature of the economy and give suitable advise that benefits clients in the long run. RM

Best Private Bank in Taiwan

Winner: Chinatrust Commercial Bank

Since entering the wealth management space in 2001, Chinatrust Commercial Bank (CTCB), a subsidiary of heavyweight Chinatrust Financial Holding in Taiwan, has gained a dominant position both in terms of wealthy individuals – the bank serves 130,000 “VIP” clients, defined as those holding more than NT$3m (€70,000) with the bank – and sales volume of wealth management products. These include mutual funds, collective investment accounts, foreign structured notes, personal trusts and bancassurance.

“What differentiates Chinatrust from the competition is our advisory system, team and also our product platform,” emphasises Peter Wei, senior vice president, general retail banking group at the bank.

In late 2009, having learned the lessons from the financial crisis and the Lehman tsunami, the bank upgraded its client risk prediction platform and advisory system. Client segmentation is at the heart of the advisory process, says Mr Wei, as it enables to identify customers’ needs and provide them with the most appropriate investment solutions. The bank offers four different model portfolios, depending on the client risk profile, as well as more customised solutions.

Based on a number of factors, such as client sophistication, source of wealth and assets held with the bank, the sales planning team makes sure that each client is matched with the appropriate adviser. Customers who hold most of their AUM with the bank in deposits, for example, are not assigned a sophisticated adviser. However, the bank has developed a detailed scoring system to classify customers according to their potential and offers trial packages, including professional financial planning, market information and free branch transaction service, to new clients.

“At Chinatrust, we continuously improve our service model to fulfil our customers’ needs. We are further improving our risk management, compliance and advisory systems, and we have a strong commitment to our private banking business,” says Mr Wei. ET

Best Private Bank in Switzerland

and

Best Private Banking Strategy for Growth

Winner: Julius Baer

Naming Asia as its second home market after Switzerland has finally marked the transition of Julius Baer from cosy Swiss boutique, with limited growth capacity of ten years ago, to the globally ambitious player we see today.

Although the key stage in the transition was the acquisition of three former SBC-owned private banks in 2005, in terms of size, firepower and culture, the vibrant leadership and ambitious growth strategy laid down by chief executive Boris Collardi, following the tragic death of his boss and mentor Alex Widmer in 2008, has also been significant.

At 36 years of age, he is sometimes too young and radical to be fully convincing to conservative private clients. But he is never afraid to delegate to expert minds around him and has installed key product design and investment brains in Asia.

Having worked in Asia for Credit Suisse, Mr Collardi is ideally placed to lead the expansion strategy, with contacts in the major regulatory authorities, as well as a feel for client needs. That’s why Asian expansion, currently centred on Singapore with 300 employees, but likely to focus on Hong Kong, with 100 bankers, in the near future, is perceived by management as a “low-risk strategy.” The aim is to build private banking hubs in Singapore, servicing cross-border Asian clients, and Hong Kong, serving Chinese customers.

Acquiring Banco de Lugano in 2005 gave the bank a licence in Singapore, as well as significant potential in Italy and Switzerland, with Julius Baer having now expanded across 15 Swiss locations. The recent buy-out of ING’s Swiss-based private bank has helped Baer boost its Geneva operation to 400 people in a bid to compete there with the likes of Pictet and Lombard Odier. There has also been expansion in Lugano and Basel, to boost Baer’s brand and penetration in Swiss wealth management.

“We are well-known in Switzerland, but not quite there in terms of penetration,” says a spokesman. “Our presence in some centres outside Zurich is still relatively new.” YB

Best Private Bank in Nordic Countries

Winner: SEB Private Banking

The ability to attract and retain the best talent on the market is the key to the success of SEB Private Banking, the Swedish institution which boasts a track-record going back to 1856. Its much diversified client base, ranging from entrepreneurs and family offices to sportsmen and board members at large corporations, offers private bankers stimulating intellectual challenges, while the close cooperation with the group’s investment bank and insurance unit enables them to learn from a wide range of professional specialists, explains Gerth Svensson, global head of private banking at the firm.

Net promoters’ scores to gauge customer satisfaction constitute the most important KPIs for private bankers and specialists, and is an important source of information for business development at SEB. “To run a profitable business, you need to be able to align the interests of the clients with that of the private bank,” says Mr Svensson.

Some key characteristics of the modernised investment process at SEB include the employment of a wider range of asset classes in clients’ portfolios, the rejection of fixed benchmarks, an increased focus on forward looking return and fundamental analysis, and greater decomposition of the risk characteristics of each asset class. The strong Manager Research and Portfolio Solutions division at SEB provides the private bank with a solid support to pursue its total open architecture approach: 80 per cent of all funds and fund assets in SEB clients’ portfolios are third-party funds.

Family offices and entrepreneurs are the key client segments that will drive SEB’s growth strategy. “New wealth is really driving the future of private banking,” says Mr Svensson. With offices in 12 different countries, including Singapore – where they are the only Nordic bank to have a presence – Scandinavian expatriate clients benefit from SEB’s renowned competence in international legal and tax issues, as well as from their kowledge of local regulation. ET

Stephan Peterhans, Clariden Leu

Best Private Bank in Spain

Winner: BBVA Banca Privada

BBVA is passionate about its business model, which is highly focused on the client relationship. Its central goal is to use its strengths to establish lasting relationships with satisfied customers. “The last few years there has been a huge lack of confidence in the market so we decided to take advantage of this and get ahead and grow,” says Alfonso Gomez, head of Private Banking at BBVA.

“We took on 5,000 new clients last year. BBVA is a leader in the corporate sector, giving us a great advantage in building a new franchise for entrepreneurs and directors. We are also looking for different groups with whom we currently do not have any relationship, such as elite sportsmen. The bank has also had particular success with its Future Generation project, extending our services to relatives of our existing clients.”

Targeting clients from commercial banking whose circumstances make them potential private bank clients, such as monthly salaries of over €6,000 and mortgages over €600,000, produced more than 1,000 such clients. A ‘Hunter Team’ has also been put together to promote to large groups.

In portfolio management, the bank puts particular emphasis on adapting to the client’s individual requirements, and has developed open architecture, with an ambitious platform that analyses 3,000 funds, and tools such as financial planning system Planifica.

Other positive quality indicators are an average retention for investment advisers and Sicav managers of over 13 years, and clearly defined training programmes for various manager levels. Remuneration for managers is based on results and activity, but also an annual customer satisfaction survey and compliance with internal procedures, and is therefore aligned with the interests of customers. CJ

Best Private Bank in Turkey

Winner: Garanti Masters

In the nascent private banking industry in Turkey, Garanti Masters Private Banking emerges from the competition for its thorough client risk-profiling process, financial planning advice and strategic model portfolio offering.

“Our wealth management approach is in the tradition of our Western European peers, there is no other private bank in Turkey with such a model,” says Demet Apak Sermet, senior vice president at Garanti Masters Private Banking.

Wealthy individuals, who must hold at least $500,000 with the bank to be considered private banking clients, are catered for in separate dedicated offices, as opposed to many competitors, who just place “private bankers” corners in their retail branches and try and attract wealthier customers with better deposit rates. “Confidentiality is very important, you don’t see our branch name anywhere in Istanbul,” she says.

Although the majority of people’s assets are still held in deposits, Garanti is at the forefront of product innovation and design of customised investment solutions for the high net worths. Although third-party products have a very low penetration in the country and are not part of the bank’s advisory offering yet, Garanti has expanded its product range to meet client demand for capital guaranteed solutions.

“Garanti is the only Turkish bank which caters the right product to the right person,” explains Ms Sermet. “State of the art” tools used by the 65 relationship managers monitor any discrepancy between the clients’ risk profile and the risk in their portfolios, so that these can be adjusted accordingly.

Since its opening in 2004, Garanti’s private banking division has seen its assets under management grow to $4.5bn. “Our main focus is to increase the share of wallet of existing clients and attract new clients,” she says. “We rely mostly on word of mouth marketing, because happy clients bring or refer us to new clients.” ET

Best Private Bank in the UK

Winner: Barclays Wealth

One of the most distinctive strengths of Barclays Wealth is its Investment Philosophy, which combines insights from the science of behavioural finance and psychology with the modern theories of portfolio management. “Understanding our clients, where they are on their journey and providing them with value added advice is embedded into the DNA of Barclays Wealth,” says David Semaya, head of the UK and Ireland division of the Private Bank.

Through the financial personality assessment (FPA), clients are recognised as multi-faceted individuals with a complex mix of attitudes, goals and aspirations. Risk tolerance is only one of the six dimensions that, combined reveal how individuals think and feel about wealth and investments. The level of clients’ belief in active management skills, for example, determines whether they will be recommended to invest in actively managed multi-manager portfolios or ETF fund of funds. “I am a real believer in continuous improvement, which has been a mantra for the Japanese industry,” says Mr Semaya who spent many years in Japan with Barclays Global Investors.

Acknowledging the search for talent is one of the biggest challenges. The bank heavily relies on its “Embark” programme, inviting individuals to join laterally from other disciplines, to pursue its aggressive recruitment plans. “Diversity in the advisers’ pool is very valuable in our business,” says Mr Semaya.

Demanding that graduates from its graduate programme pass the rigorous CFA exam is part of the process aimed at “raising the bar”. The bank is investing £350m (€400) across the board to enhance client experience and increase its productive capacity.

The entrepreneurial energy present in the UK and the industry fragmentation provides a big opportunity to grow market share. Despite being the UK’s largest player, Barclays Wealth has only a 5 per cent of the domestic wealth management market so it sees a good deal of potential for further growth. Being “big” also means it is easier to meet regulatory requirements, including those in the pipleine such as RDR (Retail Deistribution Review). “Regulatory changes can be seen as bureaucratic, but we want to embrace the change because it raises the standards. We want to be ahead of that and we have the scale and the resources to do it,” he says. ET

Best Private Bank for Socially Responsible Investing

Winner: Bank Sarasin

Switzerland’s Bank Sarasin, which has implemented sustainability though all private client asset management mandates, with a minimum of 75 per cent of screened assets even in more traditional portfolios, is also looking over its shoulder at the local competition, which is desperately trying to re-invent itself and jump on the socially responsible bandwagon.

“There is still a big difference between us and them,” insists Andreas Knoerzer, head of Sustainability at the Basel-based bank. “Sustainability is fully integrated within our Sarasin offering and not just a sideshow.”

The bank can use its screen to help clients invest in emerging markets, US equities, real estate equity and alternative solutions. The previous year has seen a significant increase of coverage of companies in developing economies, through deepening relationships with local data providers in the sustainability sector.

“We don’t greenwash companies,” insists Mr Knoerzer. “We still say on average emerging market companies are behind their counterparts in the developed markets, but they improve very quickly.” YB

Private Banking Personality of the Year

Winner: Oswald Grübel, UBS

In a staff video accompanying UBS’s new advertising campaign, Oswald Grübel mused on why he decided to leave a lucrative and well deserved retirement for the challenge of running UBS. In one phrase, the 66 year-old German, who rose to become chief executive of arch rival Credit Suisse, said his goal was to create “the” bank of his ideals, based on more than 40 years in the business.

Some 20 months into the job, Mr Grübel can look back with some satisfaction. Profits have been restored, morale boosted and yawning gaps in staffing opened during the credit crisis filled. Investment banking, the area that wrote off more than $50bn in the credit crisis, has been Mr Grübel’s prime focus. Through careful hiring, notably of Carsten Kengeter, a former Goldman Sachs fixed income star, since elevated to UBS’s head of investment banking, Mr Grübel has repaired serious damage and injected enthusiasm into his team.

Private banking has also been revived after the twin curses of the credit crunch and debilitating fight with the US over the role of some UBS employees in helping rich Americans evade tax. Together, the two issues prompted a severe loss of confidence among clients, expressed most clearly in the net withdrawal of more than SFr200bn (€150bn)in funds.

Here too, Mr Grübel has turned to new faces, along with a firm belief that only a return to profitability at group level would restore customers’ confidence. To revive the chronically unprofitable US onshore wealth management business, he turned to Bob McCann, a former top Merrill Lynch executive, who is now pushing through a strategy to improve earnings and refocus the business.

Elsewhere, Mr Grübel has looked to former Credit Suisse lieutenants. Lukas Gaühwiller has been hired to revive the Swiss business – probably the UBS’s franchise worst hit by the reputational damage. And he has acted to reverse defections among relationship managers – a particularly debilitating factor, considering leavers invariably take some customers with them.

Such measures have helped to reduce outflows, although net new money remains negative. But the mood in Asia and the Middle East, has improved, with net inflows. The same has been said for the bank’s richest clients – traditionally treated as a distinct group. Some analysts expect UBS to report positive net new money before the end of the year.

Throughout it all, Mr Grübel has kept his nose to the grindstone. Always a determined worker, with seemingly little private life, he seems to have redoubled his commitment since joining UBS. His external activities are limited to a continuing passion for fast cars and Formula 1 motor racing. Otherwise, long divorced, he spends some spare time with his adult daughter in London. More recently, he has developed a liaison with his former personal assistant from Credit Suisse.

Born in eastern Germany during the second world war and soon orphaned, Mr Grübel learned banking from the bottom up. He was reared by his grandmother before crossing as a youth to the west and eventually landing a job at Deutsche Bank. In 1970, he moved to what became part of Credit Suisse, climbing the ladder eventually to head the bank’s global trading operations.

Some believe Mr Grübel’s reason for accepting the UBS job was to show the Zurich establishment – from which his humble German origins probably excluded him – just how able he is. A further driver was probably the personal challenge of turning around two banks in one career. On accepting the UBS position, Mr Grübel joked that, for years at Credit Suisse, he had daydreamed about going through the drawers of his nextdoor rival. Now he has had the chance. HS

Best Leadership Team in Private Banking

Winner: Credit Suisse

The achievement of Credit Suisse Private Banking under CEO Walter Berchtold in terms of holding up inflows – with SFr41bn of net new business in 2009, compared with SFr44bn in 2008 and SFr53bn at the pre-crisis 2007 peak – has been partly the result of a two-pronged intervention by the management team and partly due to rivals’ weakness.

Portfolio management for clients has been revamped, with a much stronger role now played by the group’s asset management division. The group’s global chief investment officer Stefan Keitel and his deputy Patrick Bucher have taken responsibility for investment strategy.

Bankers, once allowed to travel well off-piste with clients into their own product and investment strategies, are now reigned in by a group-wide allocation policy. “We are quite strict in trying to get people to follow this approach,” says Mr Bucher. “Asset allocation is now at the centre of everything, in terms of both discretionary and advisory mandates.”

The asset breakdown benchmark for private clients has been redesigned, with more of a concentration on real rather than nominal assets, based on the bank’s strategists’ worries about medium to long-term inflation. Allocations to bonds have been reduced, although emerging market debt is strongly favoured, with commodities and gold recently increased.

The second key ingredient has been the increased activity of Solution Partners, a highly motivated Private Banking team, acting as an interface with Investment Banking and Asset Management, and one of the best examples of the One Bank strategy, first mooted in 2005, now a reality rather than a dream. This 90-strong global unit of predominantly former investment bankers has been tasked with finding the best solutions from the entire Credit Suisse spectrum for private client relationship managers. YB

Most Improved Leadership Team in Global Private Banking

Winner: Clariden Leu

Swiss private bank Clariden Leu, formed three years ago from the merger of Clariden Bank and Bank Leu, has transformed itself in this short time. While the quality of its private bankers, advisory services and discretion are well known, the leadership team has dramatically improved its revenues and profitability in the last year.

“Clariden’s management team has gone through a lot of change in the last 12 months, and those changes have begun to produce results,” says Sebastian Dovey, one of the awards judges and Managing Partner of Scorpio Partnership, which analyses bank performance. “Clariden is back on the right track. It has a strong following from clients, a strong suite of products and strong backing from its owners Credit Suisse.”

This effort has culminated in revenues of SFr527m in the first half of the year creating a profit of SFr102m. Strict cost control has reduced operating expenses for the second consecutive year, and structured product business went particularly well, with revenues up 35 per cent in the first half as advisers focused on ensuring clients’ needs were well catered for in the volatile market.

Internally, the bank attributes its success to a clear focus on target markets, and success in partitioning the bank after the restructuring of a number of Credit Suisse subsidiaries. Its ethos is to focus on the individual client’s requirements, and it offers customised solutions tailored to each client through a precisely defined advisory process. CJ

“We have been successful in positioning Clariden Leu as a highly profitable Swiss private bank with an excellent reputation,” says Stephan Peterhans, head of human resources, communications & marketing. “Our very solid figures will give the bank the boost it needs in the future, and we will work to turn this to the benefit of our clients.”

Best Fund Management Group

Winner: BlackRock

Winning the award for best fund manager for a second year, BlackRock’s size has been swelled even further by the purchase of Barclays Global Investors in December 2009. The group now has $3,300bn in assets under management and maintains offices in 24 countries around the world.

“The acquisition of BGI has doubled our capabilities,” says James Charrington, the firm’s head of International Retail Business. “They were more of a passive manager, we were more active, and the integration of this and what it means for our fund range is still a work in progress. But it is not about turning us into a bigger firm, that’s not the motivation. It is about trying to be better for our clients.”

Although the acquisition of BGI gave BlackRock control over iShares, the leading ETF provider, this has not changed the group’s approach to these passive vehicles, according to Mr Charrington. “We used ETFs for a number of years before acquiring iShares, and we continue to use them now. But I wouldn’t say our use of them has increased because of iShares. We use them when we do because they are the right tool for that investment.”

One recent area of expansion for BlackRock has been in European equity, where they brought in a new team, led by Nigel Bolton, just over two years ago. “At that point we had less than a 1 per cent market share and we now have about a 12 per cent share,” says Mr Charrington. “Although the European equity space has been in net outflow, over most of that time we have had very strong inflows.”

He also reports that the group has seen strong demand for its natural resources products, buoyed by strong commodities markets, but also, he believes, from BlackRock’s long track record in this area. ES

Best Emerging Market Fund Management Group

Winner: Franklin Templeton

Franklin Templeton Investments is one of the largest dedicated independent asset management companies in the world, and is proud of its 71-year heritage. As one of the first groups to develop a dedicated emerging markets (EM) team, Templeton was something of a pioneer in EM investing back in the early 1990s, banging the drum for developing economies long before it became fashionable. The house style has remained true to its roots in value-oriented bargain hunting, with managers attempting to buy at the point of maximum pessimism and sell at maximum optimism, looking for stocks that are on the greatest discount to their five-year value potential.

Templeton’s emerging market funds range from the grandfather of EM equity funds, the vast £1.85bn Templeton Emerging Markets investment trust, and the Templeton EM Bond fund, both launched 20-plus years ago, to the Templeton Frontier Markets and Asian Smaller Companies funds which were launched in October 2008.

Franklin Templeton Investments has grown organically and by strategic acquisition and now offers investors access to a number of distinct, yet complementary investment groups, including Franklin, Templeton and Mutual Series. These groups invest independently, adhering to their own disciplined investment philosophy and process, but each has original company research at its foundation.

For many, the Templeton name is synonymous with Mark Mobius, who has been managing its money for over 40 years and predicted the bull-market rally in emerging markets in March 2009. He believes the global economic recovery is still in place and remains convinced the so-called Bric markets of Brazil, Russia, India and China, will continue to drive the recovery. However, he currently expects ‘frontier’ markets to outperform wider emerging markets in the next decade, with banks in Nigeria and resource firms in Kazakhstan topping his picks. He also likes South African companies that offer exposure to growth in sub-Saharan Africa. CJ

Best ETF Provider

Winner: iShares

A recent article in the Financial Times says it all: “For as long as exchange traded funds (ETF) have existed it seems providers have been trying to loosen iShares’ grip on the market.” Seventeen years after from the launch of the first ETF, iShares still controls more than two-fifths of the global market.

That strength is particularly pronounced in the fixed income space where iShares still controls 50 per cent of Europe. Fixed interest has been in huge demand in the last few years, and as investors shake off their caution, high-yield and investment grade corporate debt ETFs are doing well. iShares continues to grow its presence in this area: its new Markit iBoxx Euro High Yield ETF gathered nearly €90m in its first month since launch in September, while the firm recently launched a Hybrid Bond Index Fund in Canada.

Its precious metal ETFs are very popular. iShares Silver Trust took $345m in September, and iShares Gold Trust attracted $178m, the largest inflows of all gold ETFs, having taken steps to cut its expense ratio. The company also plans a range of commodity ETFs, an area where its offering is sparse compared with some rivals.

“An increasing number of institutional investors are using ETFs as they look for low-cost ways to build and manage portfolios and gain exposure to a range of asset classes,” says Dee Brown, head of UK wealth sales at iShares. “Investors also like to have simple, transparent tools to act quickly in changing situations in this difficult environment.”

A report by Greenwich Associates shows 55 per cent of institutional investors plan to increase their exposure to ETFs in the next three years. In the first nine months of this year 129 new ETFs were launched into the market, but on the other hand sponsors have closed 37 portfolios, with some small and new players unable to break even on their funds. CJ

Best Structured Product Provider

Winner: UBS

UBS has long been highly regarded for the breadth of its structured product provision, and recognised early on that structured products can meet investor appetite at both ends of the risk spectrum, both for those prepared to accept higher risk for attractive potential returns, and for those who would prefer a return that is smaller, but guaranteed.

“We’ve seen a recovery in volumes, inside UBS and throughout the industry and I think demand will continue to improve for two reasons, firstly that these products can be structured according to a client’s individual risk appetite, and secondly, in a fashion that best reflects the clients’ market expectations,” says Vito Schiro, head of Derivatives Capital Markets, Investment Products & Services at UBS. “Those features were always there even in the most difficult days, and so we positioned ourselves for the comeback.”

“Clients are now slightly more cautious than pre-crisis and particularly like simplicity and transparency,” adds Mr Schiro. “There is biggest appetite for products that are fairly common and mainstream such as reverse convertibles, with or without barriers, and fixed income floating rate notes and credit linked notes.”

One of UBS’ key competitive edges is it offers tailor-made structures for relatively small portfolios – in equity-based products for example this might be as small as SF20,000. A client adviser can use the convenient and flexible UBS Investor Platform to devise a plan on the spot, choosing the underlying asset class and the terms. The trade will be good for a few seconds on the screen and he can simply click to proceed. CJ

Best Global Custody Provider

Winner: BNY Mellon

BNY Mellon is the world’s largest custodian, with $21,800bn in assets under custody and administration, working with all types of financial institutions. Custody accounts for a large part of BNY Mellon’s overall revenues – around 35 per cent of group business.

“What people see is that we’re making a significant investment in wealth management and private banking,” says Daron Pearce, head of asset servicing UK at BNY Mellon. “We are putting a lot of resource into the development of our wrap facility and technology enabling wealth managers and private banks to leverage our platform and look across all types of security. Our vision is focused on this broad wrap capability. It is a sophisticated online accessing tool, harnessing the kind of technology that enables intermediaries to support their clients very well. It is new to market in the last few months, and we have been developing it aggressively with a large UK retail bank.”

Technology is an integral component of asset servicing and information management, and BNY Mellon sets reporting standards with the award-winning online capability Private Workbench, providing access to global custody information and allowing clients to measure and evaluate daily activity.

The service provider also has a capability through wholly-owned Eagle Investment Systems to provide web-based solutions to integrate and streamline the investment process, enhancing functions such as data warehousing. As financial companies of all sorts become focused on transparency and risk, such systems are critical for look-through at the world of processing. CJ

MEET THE JUDGES

Amin Rajan, CEO, Create-Research, London, UK

Amin Rajan is chief executive of the Centre for Research in Employment and Technology in Europe (CREATE) – a pan-European network of prominent researchers undertaking high level advisory assignments for the UK government, city institutions, multinational companies and international bodies such as the EU and the OECD. He has also acted as a senior consultant to a huge variety of household name companies. He is a visiting professor at the Cass Business School, London Metropolitan University, Centre for Leadership Studies at Exeter University, President of the Scientific Committee at Audencia - Nantes Ecole de Management in France, and on the Editorial Board for the Journal of Asia-Pacific Business.

Ray Soudah, Founder, Millenium-Associates, Zurich, Switzerland

Ray Soudah co-founded MilleniumAssociates, an independent firm specialised in M&A and strategic advice for the global financial services industry with particular focus on wealth management. Mr Soudah has a long background in global financial services, having held senior management positions within Citigroup, Midland Montagu Investment Banking the National Bank of Bahrain, SBC/UBS AG and Cedel Bank.

Simeon Fowler, CEO, Fox Partnership, Singapore

Simeon Fowler’s financial career started in 1988 as a banker in London. In 1994 he moved to a national independent financial advisory business, and went on to qualify with the Chartered Insurance Institute. In 1998 he joined an established London-based search and selection company specialising in recruiting top-flight individuals for private banks, wealth management firms and IFAs. In 1999 he set up the Fox Partnership.

Sebastian Dovey, Partner, Scorpio Partnership, London, UK

Sebastian Dovey focuses on the execution and development of strategy recommendations around the globe for private banks, global banks, asset managers, family offices, technology firms, service providers, aggregators and start-up wealth management initiatives. He is a lecturer at the Swiss Finance Institute for its executive MBA programme. He is the creator and faculty director of the International Wealth Management Academy developed with the Financial Times Group.

Shelby du Pasquier, co-head of Banking and Finance Group, Lenz & Staehelin, Geneva, Switzerland

Shelby du Pasquier is considered a leading lawyer in banking and financial services in Switzerland, advising a number of Swiss and international financial institutions, as well as Swiss and offshore private equity funds, hedge funds and fund managers. He was nominated by Chambers in 2008 as a leading individual in banking and investment funds.

Alois Pirker, Research Director Wealth Management, Aite Group, Boston, USA

Alois Pirker specialises in analysing trends in the wealth management market. He has been published extensively on topics including the registered investment adviser space, financial planning, separately managed accounts and adviser-focused platforms and tools. Before joining Aite Group, Mr Pirker worked with Celent’s Securities & Investments Group and at UBS Wealth Management.

Yuri Bender, Editor-in-Chief, PWM, London, UK

Yuri Bender is a financial journalist specialising in international asset management, private banking and capital markets. He joined the FT group in 1992, launched FT Mandate in 1999 and PWM in 2001. He writes regularly for the FT newspaper and chairs industry panels. He studied Investment Management at the London Business School.