Global Private Banking Awards 2016: Winners’ Profiles – Best Service Offerings

Best Private Bank for Socially Responsible Investing
Best Private Bank for Growth Strategy
LGT

After several years of knocking at the door, the LGT group has burst into the inner 

circle of global award winners in dramatic fashion, scooping accolades for both socially responsible investing and growth strategy. The growth strategy award is mainly quantitatively based, supported by Scorpio’s analysis of all major private banking groups’ KPIs.

As the world’s largest private banking and asset management group wholly owned by a single family, running $132bn for its clients, LGT says it has garnered inflows of around $40bn during the last five years. Growth has been particularly impressive in both Switzerland and Asia. 

Back in 2014, LGT bought a portfolio worth of Swiss private banking assets, held by clients in Europe, Africa and Latin America, from a de-risking, downsizing HSBC. LGT says one of the highlights of 2015 was the successful integration of this portfolio, worth more than $7.7bn, and the 70 staff who serviced it. All of the relationship managers chose to stay with LGT, says the bank, which claimed an asset retention rate of 85 per cent.

But LGT has also been busy recruiting staff in the Middle East, having added 12 client advisers to its local team in Dubai during 2015, doubling the number of relationship managers employed by the bank in the region. 

Clauses relating to investment centred around environmental and social responsibility (ESG) have been enshrined in LGT’s investment strategies since 2003. Funds have been screened to detect companies with the highest ESG risks, while those companies with business models friendliest to ESG criteria have also been more likely to be included in investment portfolios.

Since 2007, LGT says it has supported more than 50 social enterprises and non-profit organisations, reaching 3.8m less advantaged people. YB

Best Private Bank for Islamic Services
Best Private Bank in Malaysia
Maybank

Maybank is present in all 10 Asean countries and provides wealth management services to its affluent and high net worth clientele through its Premier and Private Wealth segments. 

The bank has dedicated significant resources to further develop its HNW business, improving their value proposition, service standards and geographical reach. As a result, the business grew steadily last year.

“There are several pillars that contributed to our growth in 2015. However, it all centres around placing our clients’ needs and interests first,” says Alvin Lee, head of group wealth management. “Private banking is not just about having the best-in-class products, but importantly, building a long-standing relationship of trust and bringing value to our clients.”

In 2015, the bank launched discretionary portfolio management in Singapore and Lombard Financing in Malaysia. “In the current low interest rate environment, access to financing and leverage options can potentially create better investment opportunities and returns across clients’ range of risk appetites. Lombard Financing is such an option,” he says.

Its geographical footprint was expanded with two new Private Wealth centres in Malaysia, and a booking centre in Hong Kong to connect investment and business interests of HNWIs in Greater China, to opportunities the bank’s key markets. The group also opened an office in London to service its client’s UK property financing needs. 

Testament to its commitment to its local clientele, Maybank has dedicated significant resources to developing its Shariah-compliant offerings. Last year, the group launched its SCOE (Sharia Centre of Excellence) and SCOE ‘Virtual Centre’ in February 2015, as they strive to become a global reference point on Shariah knowledge and best practices. 

“Of course, our pursuit to strengthen the business does not stop here. As we navigate through these challenging market conditions, we continue to build infrastructure and ensure that our service and delivery are consistent with clients’ evolving needs,” Mr Lee adds. PG

Best Initiative of the Year in Relationship Management Technology
Best Private Bank in the US
Northern Trust

One of the highlights of 2015 for Northern Trust, which has 55 offices across the US overseeing $227bn of private client assets, was a series of enhancements to its pioneering Goals Driven Wealth Management solutions. The bank describes this as a “significant pivot” away from traditional approaches to portfolio management.

The difference is that the asset allocation process is actually defined by customers’ goals, rather than just purely from the investment team’s recommendations. This process goes well beyond a goals-based questionnaire sitting atop a convention asset allocation process, says the bank.

The Northern approach is designed to allow advisers to have richer conversations with clients, giving them an understanding of whether their assets will prove sufficient to fund their goals and provide a definitive framework with which to address any excesses or shortfalls. A mobile goals platform has been developed by the bank to give advisers access to real-time information in client meetings.

“At Northern Trust, we believe the most important ingredient to provide outstanding service to ultra high net worth families is the combination of both human advice and advanced technology,” says Steven L. Fradkin, president of Northern Trust Wealth Management.

“Service excellence is not an either/or proposition between human expertise and technological enablement. It is, rather, the integration of these different mediums, and aligning them with how each client prefers to work with us, that is the art of our business.” 

The belief at Northern Trust is that with ultra-high net worth clients, there is a continuing need for human, personalised, advice and analysis because of the intricate and ever changing complexities and interdependencies involved with estate planning, charitable giving, tax planning and other factors. 

“It is also imperative that excellent expert advice be combined with the most advanced technology and delivery,” says Mr Fradkin. “Technology must be harnessed across a continuum of client needs ranging from goals driven planning, reporting, risk management, e-signature fulfilment and more and must be provided in a seamless manner.” 

While he expects technology to continue to help clients and increase the bank’s efficiency, there is no expectation that this will lead to a reduction in wealth advisers given the complexities of wealth management. Also, the on-going growth means that hiring will continue. YB

Best Private Bank in the UK
Best Initiative of the Year in Client-facing Technology
Best Private Bank for Philanthropy Services
Coutts 

Coutts, banker to Britain’s royal family, has refocused its business on UK clients, having sold off Asian and Swiss private banking arms.

Under the stewardship of Peter Flavel, recently recruited as chief executive, the London-based bank is making sure all basic building blocks in terms of banking and customer contact are in place before standardising an investment process under chief investment officer Alan Higgins, to make sure the same asset allocation and investment menu is available nationwide. 

Previously, there was an element of each relationship manager having a much larger influence on the portfolios of their private clients. This will no longer be the case under Mr Flavel, who wants to make sure there is no deviation from the process laid down by Mr Higgins and his team of almost 200 investment staff, who have overseen a range of top quartile investment products. 

Currently a quarter of the £60bn ($73bn) which Coutts’ clients hold with the bank is put to work in investment strategies, but this number is “growing strongly”, says Mr Flavel and the aim is to make the bank’s investments even more attractive to the clients. 

Another plank of his expansion plan is to expand borrowing behaviours of Coutts’ clientele, some of whom are “heritage” investors belonging to blue-blooded landed gentry, but an increasing segment of whom are entertainers, sports people and entrepreneurs. Increasing referrals between retail and commercial bank NatWest and its private sister arm Coutts and collaboration between the two on structuring investments for wealthy entrepreneurs is also part of the Australian’s blueprint. 

Coutts prides itself in targeting clearly defined client groups, including professionals, executives, entrepreneurs, international customers, entertainers, sports people and landowners, and tailoring services to each segment according to their needs and habits. 

Crucial to dealing with some of this younger audience is the bank’s digitisation programme, in which Coutts has so far invested £30m ($36.5bn). “We are increasingly delivering much more content through video,” says Mr Flavel. “This is a better and much more efficient way to get out more content to our clients.”

While the international footprint has been reduced from a geographical perspective, the bank will continue to serve its growing base of clients who have “connectivity” to the UK, currently accounting for 20 per cent of the business. YB

Best Private Bank for Succession Planning
Brown Brothers Harriman

A key differentiator for Brown Brothers Harriman’s succession planning offering is its private partnership structure, which creates a “true alignment of interests” with clients, explains Kathryn George, partner at the oldest and largest US privately owned bank, with around $27bn in client assets.

“As both owners and clients of the firm, BBH Partners think about succession planning in the same context as our clients,” states Ms George. This includes understanding the importance of carefully evaluating clients’ individual needs and concerns for the near and long term, in order to ensure they have a plan specifically tailored to their personal and family objectives.

In addition, each Private Wealth Management relationship team at BBH is staffed with a wealth planner who attends all client meetings, as opposed to many wealth management firms that have a centralised group which oversees client wealth planning, she says.

BBH’s wealth planners are former practicing trusts and estates attorneys and advise clients on wealth, estate, tax and charitable giving plans, as well as collaborate with colleagues in the BBH Trust Companies.

The bank serves private business owners throughout the entire wealth cycle of creation, transition, preservation and growth, supported by the Corporate Advisory & Banking and Private Equity teams.

More important than tax planning in ensuring successful wealth and business transfer is communication, says Ms George. This is why BBH provides clients with resources and strategies for having family conversations to discuss their wealth values, as well as their near- and long-term goals, and assist with family governance, next generation education and business succession planning. 

“Lack of communication and trust is the leading reason for the failure of wealth transfers,” she says.

As women increasingly control a larger percentage of wealth and will increasingly be the primary drivers of their families’ wealth plans, it is critical to have women involved in conversations about these issues. 

One key area of focus for BBH Private Wealth Management in the coming years is engaging and supporting women as they create and manage wealth. The bank recently launched the BBH Centre for Women & Wealth, where women can engage in conversations about wealth, family and leadership. 

BBH, which focuses on HNW individuals with a minimum of $10m invested with the bank, is also looking to expand its reach and appeal among younger entrepreneurs by continuing to engage them in the early stages of building their companies. ET

Best Private Banking Boutique
Banque SYZ SA

Twenty years since its formation in Geneva, Banque Syz has consolidated its position as one of Switzerland’s leading private banking boutiques with the purchase of Royal Bank of Canada’s Swiss business adding $11bn in client assets to hit a new total of $40bn.

Concentrating on portfolio management rather than traditional Swiss ‘walking the dog’ private banking, CEO and majority owner Eric Syz, who recently bought out co-founders Alfredo Piacentini and Paolo Luban, has cut a controversial figure in Geneva.

Coming from Lombard Odier, he is very much of the establishment, yet has not been afraid to be super-critical of the old-school banks around him, slating them for tax avoidance techniques, lack of compliance and inability to concentrate on managing clients’ assets.

The acquisition has also allowed the bank to expand its international footprint, with the bank now boasting operations in Latin America, Africa and the Middle East in addition to its traditional European stomping grounds. It is the belief of Mr Syz that a toe-hold in these areas of stronger wealth generation will help boost growth of his operation.

With his flag currently flying high, the bank’s current fortune is a world away from the depressed days following the financial crisis of 2008 when it lost more than half of its customer funds as wealthy investors turned their backs on hedge funds. “After 2008, we might have seen investors flock out of hedge funds, but that doesn’t mean that absolute return investing is dead,” says Mr Syz. “In fact, the change in Ucits regulations have allowed ‘conventional’ funds to adopt hedge-fund-like strategies, with short-selling, derivatives and leverage.”

Swiss banks must adjust to this new reality, seize opportunities and shake off their legacy of secrecy-related business, he believes, concentrating on marketing their “unique know-how in international investing”.

Since taking full control of the operation, Mr Syz claims the bank is now one of Switzerland’s “consolidators”. One of his moves to facilitate this objective has been the outsourcing of its back office and IT operations in order to absorb increased volumes of assets garnered from the RBC buyout. 

The new growth strategy also involves diversifying revenues by widening its geographical footprint to new territories and also its product range to embrace both active advisory services and private equity investments, the latter through a partnership with ACE & Company, with whom Syz recently co-hosted a major private equity symposium in Geneva.

“We are now present and ready to expand in regions where we were until recently absent from, such as Latin America and Africa,” says Mr Syz. 

Changes in the needs of wealthy private clients have led his bank to respond, he says, offering a “360 degree view of their wealth”, embracing wealth planning, corporate advisory and private equity. YB

Best Private Bank for Digital Communication
CaixaBank

Key to the digital transformation at La Caixa, one of the most important consolidators of Spain’s vibrant, technology-led private banking sector, is regulation.

The onset of tighter, more customer-focused rules under Mifid II, requiring a trail of records of all banker-client conversations and transactions led to solutions centred around technology. Fast digitisation was the only way to keep up with the rulebook’s demands, admits Victor Allende, the bright-eyed, bearded private banking boss at CaixaBank, with an enthusiasm for all things computerised. Indeed, one of the reasons why his bank, along with local rivals BBVA and Santander have caught up with high quality foreign rivals in terms of service has been due to their relentless pursuit of the digital agenda, one of the goals enshrined in the organisation’s 2015-2018 strategic plan.

At Caixa, one of the centre-pieces of this has been “El Muro”, translated as ‘The Wall’, a new virtual space where 57,000 wealthy private clients can meet relationship managers in safety, without risking hackable exchanges on email. This has also facilitated more trading of mutual funds, including exchange traded funds, though stopping short of robo-advice, due to a strong belief at the bank that clients will always want wise human beings to speak to, receive advice from and bounce ideas off.

“The Wall remains the key tool in our digital transformation model,” confirms Mr Allende. “It ensures a confidential dialogue and exchange of information between customers and their private bankers.”

Another solution developed by CaixaBank has been the possibility for clients to sign contracts electronically, both through Linea Abierta and via smart PCs which the account managers carry around with them. The bank has also launched Research Plus, a new website proving clients with “exclusive” economic and financial information. YB

Best Private Bank for Use of Technology
Best Private Bank in Spain
BBVA Banca Privada

After years of little progress, with well-resourced US banks standing well above lowly locals, Spain now sees its home-grown institutions revitalised and empowered after the country’s economic crisis. Among those in the vanguard is BBVA Banca Privada, which stresses the notion of client experience above all else, boosted by an ongoing digital transformation.

BBVA was slightly ahead of its rivals as one of Spain’s early leaders in digitisation, as only the fast movers were left standing, after a whole host of the banking small fry were bought up or collapsed during the crisis.

Part of this sea change has involved the establishment of a Data Analytics department, devoted to analysing so-called ‘big data’, aggregated information, collected during every minute of customer transactions, using the skills of top statisticians, mathematicians and data scientists.

“The intensive use of technology allows us to develop a consistent investment process, which offers excellent long-term performance to our clients,” says Jorge Gordo Naveso, director of private banking at BBVA Banca Privada.

The transformation also involves a much more user-friendly onboarding process and specific services channelled to customers through tablets, smartphones and wearable technology.

One of the client sectors key to the management’s hearts is the family office segment, which presents a whole team of specialists in areas such as credit, tax and portfolio management to each wealthy family client. This initiative incorporates real estate advisory, new generation programmes, business planning and specialisation in areas including art. The range of available investments is also being revitalised, emphasising megatrend funds – identifying niches in sectors affected by environmental, technological and political changes – private equity, real estate and corporate finance-led strategies. 

Clients’ focus on real estate has increased hugely during the last three years, during which they have weighed up growing prices and yields from property investment against negative interest rates offered by banks, admits Mr Gordo Naveso. However he urges them not to get carried away by the euphoria and to maintain exposure to bonds and equities according to recommended risk profiles. Importantly for the bank, a trend among clients to transfer assets abroad and to trust their own financial system less appears to be in reversal following recent political shifts in Spain. YB

Best Private Bank for International Customer Service
Santander Private Banking

Santander Private Banking, part of the Santander Group, aims to become “the only bank” for their clients, offering a wide range of solutions for all their financial needs. 

At the end of 2015, the Santander Private Banking business had a total of €166bn ($183bn) in assets under management, up 5 per cent year on year. It currently has business units in Spain, Portugal, Italy, Brazil, Mexico, Chile, the United States, Switzerland and the Bahamas. A network of more than 100 private banking branches and more than 2000 professionals, have afforded Santander a position of leadership in the sector. 

The business model of Santander Private Banking harnesses the group’s multiple strengths and capacities, where the private banker links the bank and the customer, supported by experts in multiple fields and advanced technological tools to aid with investment decisions. Its investment process uses an individual analysis of client demands, which establishes the portfolio’s investment horizon and the level of risk aversion.  

This year, the bank won the best private bank for international customer service award, and was highly commended in the best private bank in Chile category. 

Its excellence in customer services was backed by the results of the latest Scorpio Partnership Global Private Banking Benchmark survey. 

“As a group, the business
acknowledged early on the fundamental importance of placing client experience excellence at the heart of their approach in wealth management,” explains Sebastian Dovey, managing partner at Scorpio Partnership. 

“There was a cultural shift from product to service, and a process of evaluation on their progress. Santander was ahead of many others in the private banking and wealth management arena. The results of this transformation in thinking are now showing in the client feedback.” 

The bank is adapting its service model to the digital transformation led by the Santander Group, which aims to significantly increase the number of users on digital channels. PG

Best Private Bank for Entrepreneurs
Best Regarded Brand in Private Banking
BNP Paribas Wealth Management

With its private banking tentacles sliding not just through Europe’s developed and up-and-coming economies, but deep into the Asian markets that it once struggled to penetrate, the brand of BNP Paribas, augmented by its distinctive green-and-white logo and its “bank for a changing world” tagline, is finally a force to be reckoned with.

This is not just about size, with the Parisian house now running client assets worth $360bn, but market presence. London is a case in point, with both clients and portfolio managers keen to visit spacious, airy offices in the heart of the city at Aldermanbury Square. The bank employs only 50 people specialising in wealth management in London, but a growing number of the bank’s most influential clients are sometimes based in the UK capital, often non-residents with an international perspective, with those from Eastern Europe and the Middle East also keen to book their business here.

“The UK is a very important offshore centre for us and will remain as such,” ventures Vincent Lecomte, joint CEO at BNP Paribas Wealth Management. 

The bank’s strong presence in the sport of tennis, centring on the annual Roland Garros clay court tournament in the heart of the French capital, also creates an excellent focal point for clients, attracting many entrepreneurs from the Far East, in addition to those from France and neighbouring countries. Indeed, the Asian region, where the French wealth manager employs 1200 of its 6600 global workforce, is expected to be a key area of growth. 

The bank is already serving its third generation of Asian clients, predominantly belonging to entrepreneurial families prominent in industries including shipping and textiles, with extensive real estate interests in Hong Kong, London, the US and Canada. “This is part of our role,” adds Mr Lecomte. “We need to accompany our clients for the long run.”

These entrepreneurial families are particularly keen to learn about family governance and wealth planning issues, he says, leading to the bank staging many seminars for them, concentrating on how to transition wealth from one generation to the next. Combining such teach-ins with a visit to one of the tennis tournaments which the bank sponsors appears to be a winning formula. YB

Best Private Bank for Family Offices
BNY Mellon Wealth Management

BNY Mellon Wealth Management’s dedicated unit, the Family Office Services group, was established 45 years ago and is among the first of its kind in the US. Through its 60-strong team, it provides specialised resources designed for 400 plus family offices and advisers, which it serves across the Americas, Asia, Europe and the Middle East. 

“As part of a global financial institution that operates in multiple jurisdictions, we are a strong partner for global, multi-currency and multi-jurisdictional families whose members may live all over the world under varying tax and legal regulations,” states Eileen Foley, national director of BNY Mellon Wealth Management’s Family Office Group.

Founded in 1784, BNY Mellon WM is the oldest private bank in the US, with $198bn in private client assets. Targeting fast growing wealth markets in the US, in 2015 it opened a new family office location in Palo Alto, with more than $3bn in AuM sourced from the firm’s US coast and Pacific Rim client base. 

Leveraging on the global resources of BNY Mellon, the world’s largest custodian, the bank sees significant opportunity to expand its family office services within Europe, by providing automated, online consolidated reporting. 

“Europe’s prevailing private banking model, in which private banks provide investment management plus custody, requires family offices to use multiple custodians and conduct data consolidation in-house. Our master global custodian services can bring greater efficiency and save costs for family office clients,” says Ms Foley. 

The bank, which has a dedicated group of family wealth investment advisers providing investment advice to family office clients, last year introduced an ad-hoc team of wealth planning analysts, to better serve clients with particularly complex planning needs, called Global Insights Lab.

Wealth transfer is a key issue many family offices and high net worth investors are dealing with worldwide, explains Ms Foley. 

“The next decade will usher in a huge wave of wealth changing hands, as wealth creators age and the next generation step forward.” Moreover, with family office members increasingly living in multiple jurisdictions, wealth transfer becomes even more complex. 

“Given that, it’s critical that family offices have the insights to understand the implications of such a major shift, and the capabilities to meet the challenges inherent in this trend,” she says. ET

Best Private Bank for US Customer Service
Best Private Bank for UHNW clients
Best Private Bank in Egypt
Citi Private Bank

Targeted at the wealthiest segment of the world’s population with more than $25m to invest, requiring a “high touch” relationship, Citi Private Bank is expecting the most significant growth in managed assets to come from Asia. “Entrepreneurs are all around the world. There is no shortage of people willing to strike out and we position our brand to help serve them,” says Peter Charrington, global CEO of Citi Private Bank.

He warns the competition, many of whom are selling their franchises and retrenching as national players, that it will be difficult to keep up with the cross-border banks currently making the running.

“A lot of them do not manage their cost-income ratios and they lose focus; we will see this trend continue,” warns Mr Charrington, who says banks need to define their proposition and exactly what they are offering to clients. “People are coming into the industry with high costs and regulation, so they need to be focused on who they are serving in terms of types of clients. If they are trying to be all things to all
people, then it’s a very difficult proposition. At Citi Private Bank, we have remained steadfast in our vision, execution of that vision and the segment of clients we serve. This has benefited us, but most importantly, it has served our clients well.”

Part of the answer to redefining the business model has been judicious use of new technology and the US bank has been one of the most pro-active in rolling out a digital communication channel across the regions where it has strongest penetration. Its ‘Project Sheen’ led to the redesign of the entire customer experience, including receptions and meeting rooms, as well as digital interfaces such as the InView system. 

This process is one of constant re-valuation and is definitely not static, says Mr Charrington, who chairs a working group that regularly looks at glitches in the system and evaluates customer feedback before making more tweaks to the digital platform. 

Although there was originally talk within Citi about breakneck technological innovation, staying ahead of competitors, the thinking has recently been modified, with the artificial intelligence pioneered by the likes of Singapore’s DBS and the Korean banks seen as a potential step too far for the wealthiest clients. Mr Charrington is adamant that these people come to his bank for one-to-one advice, which is the key tenet of customer service. 

“We don’t see ultra high net worth investors going for robo-advice. Our technology and digital experience is very high quality, but people are still our most important ingredient. The more wealth you have, the more that becomes important. Digital is not the only component.”

In the US, each banker serves just 30 clients. “Our definite aim is to keep this number small,” says Tracey Warson, head of North America at Citi Private Bank. “The more wealth a family has, the more complex the needs are.” YB

Best Private Bank in Singapore
Best Private Bank for Innovation
DBS Bank

Led by charismatic private banking CEO Su Shan Tan, backed up by operations and technology czar Olivier Crespin, Singapore’s DBS Bank has cemented its place as one of the leading innovators in the fast moving Asian regional market.

Having recently absorbed the Asian SocGen franchise, DBS figures show that the bank has now been delivering consistent double digit private banking growth since 2011, fuelled by both new clients and the ultra high net worth client segment.

Crucial to this vision is the bank’s digitalisation programme, which is at the core of the DBS growth strategy. This has included upgrading of the iWealth online platform available in Singapore, Hong Kong, Taiwan, China, Indonesia and India, to improve clients’ experience, but also to engage them more online and to increase the amount of transactions and interaction they are having with the bank.

The bank also hopes to increase cost savings by spreading expenses across a much wider pool of clients and enhancing its penetration of straight through processing (STP).

A special project of ‘RM Mobility’ involves “empowering” the bank’s front-line sales force, allowing them to become truly mobile across the region and less confined to their offices. This involves connecting with clients via an app through the portfolio management process as well as the initial prospecting and onboarding stages, using Human-Centred Design (HCD) principles, with feedback from bank customers and staff. YB