Global Private Banking Awards 2016: Winners’ Profiles – National Winners (The Americas)

Best Private Bank in the US
Best Initiative of the Year in Relationship Management Technology
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 Canada
RBC Wealth Management

With CAD559bn ($422bn) in assets under management, the Canadian Bank has a dominant presence in the domestic market and a strong service proposition, which helped the bank win this accolade for five consecutive years. Working closely with the Private & Commercial Banking divisions of RBC Royal Bank, RBC Wealth Management aims at delivering integrated banking, credit and wealth management services to wealthy individuals and their businesses. 

 “The scale, financial strength and resources available to RBC Wealth Management from across RBC are unparalleled among Canadian financial institutions and represent a significant advantage compared to many of our US competitors,” claims Doug Guzman, group head, RBC Wealth Management & Insurance.

The bank, which also has a presence in the UK, the Channel Islands and Asia, last year strengthened its presence in the US, “its second home market”, by acquiring City National Bank (CNB). The domestic bank is focused on serving HNW and commercial clients in growth markets such as New York, Los Angeles and the San Francisco Bay area. 

“CNB adds strong private and commercial banking capabilities to our wealth management offering,” says Mr Guzman.

With a strong focus on entrepreneurs and business owners, RBC offers a variety of products enabling them to leverage their wealth for capital injections, acquisitions or other opportunities. HNW clients, who often have unique lending needs and credit profiles, are now also benefiting from CNB mortgage products, commercial loans, commercial real estate loans and personal loans, explains Mr Guzman. 

The bank places particular emphasis on the “emotional aspects” of customer service and invests significant time, effort and training to ensure that advisers deliver on “intangibles” such as making sure clients feel their interests are being cared for, their needs understood and the advice they receive tailored to their needs. 

At the same time, it continues to invest in technology and digital capabilities. Last year it launched a web-based, user-friendly tool, myGPS, which was rolled out across Canada and the US with the purpose of allowing for “more meaningful, interactive conversations” between adviser and client on each client’s goals, priorities and solutions.

Currently, about half of the bank’s client communications are conducted through digital channels.

“Digital capabilities are increasingly critical to the client experience. We recognise the growing demand for digital engagement, while also understanding that clients value our wealth managers as the centrepoint of their relationship,” states Mr Guzman. ET

Best Private Bank in Bermuda
Best Private Bank in the Cayman Islands
Butterfield Bank

Butterfield Bank, a private bank initially established in Bermuda in 1858, became the largest domestic provider of wealth management and trust services in the Bermuda market in May 2016, after completing the acquisition of Bermuda Trust Company Ltd. and the private banking investment management business of HSBC in Bermuda. It had already consolidated its position in the Cayman Islands in 2014 by acquiring select banking relationships from HSBC in the Cayman Islands when that bank exited the Cayman market. 

Within private banking, the primary focus is on locally based HNW and UHNW clients, rather than on serving as an offshore bank for international customers. Reflecting the particularities of the market in Bermuda and the Caymans, the client base is segmented into different categories based on occupation type: Corporate/Insurance and Reinsurance Executive, Medical Professional, Entrepreneurial, and Professional. Each category receives specialised advice and has specialist products dedicated to it. 

To give an example, for professional clients, private banking services are offered in combination with select corporate lending and merchant services solutions to expedite and simplify the process of arranging partnership loans and establishing payment and cash management solutions for new professional practices. 

Curtis Dickinson, who became group head of private banking in 2016, adds: “Segmenting clients by their occupation enables us to assign private bankers with distinctive skill sets, experience and availability to suit the needs of the client.”

Butterfield emphasises the importance of what it calls “regular face-to-face interaction” with clients more than many private banks. “This allows us to get to know them better, and is the foundation for developing a long-term, trusting professional relationship,” says Mr Dickinson. “We consider face-to-face interactions to be part of our ‘high touch’ personal service, which is a differentiator for us, and which has been behind many client referrals of new business.” DT

Best Private Bank in Brazil
Best Private Bank in Latin America
Itaú Private Bank

Despite the challenging economic and political environment in Latin America, particularly in Brazil, its largest economy, Itaú Private Bank attracted 140 per cent growth in net new money last year, BRL18bn ($5.7bn), boosting total client assets to BRL267bn. 

Winner of our country and regional awards for several years, the Brazilian institution remains the best capitalised bank in its home country, and a top regional player in technology, products, and advisory services, according to our panel of judges.

The bank’s net profits increased 15 per cent too, although high interest rates and high inflation drove most of its net new money into inflation-linked instruments and conservative solutions, such as government bonds. 

“From a margin perspective these are less profitable products, but we have a very sustainable operation, with very solid net income,” states Flavio Souza, CEO at Itaú Wealth Management Services. “It is also very important to take care of the P&L and manage costs.” 

Positive results were also favoured by the withdrawal from the region, or reduced LatAm focus, of several global banks, due to their lack of scale and costs associated with increased regulatory compliance. 

This gave the bank, perceived as a “safe haven”, the opportunity to serve new clients, says Mr Sousa. “Also Itaú has a very well defined strategy and a strong ability to generate new clients, leveraging all business areas of the bank.”

Itaú Private Bank has almost 28 per cent of market share in Brazil, which represents 40 per cent of the LatAm wealth management business. After the merger with CorpBanca in 2014, Chile and Colombia represent a key focus for the bank’s wealth management growth.

Offering a global platform of products and services is becoming increasingly important, says Mr Souza, who views tax amnesty programmes in the region as “a very positive development for the industry.” 

 “Domestic markets are not big or sophisticated enough to give wealthy clients, especially the ultra-wealthy, sufficient alternatives to build a diversified portfolio.” In the region, although to a lesser extent in Brazil, cash and deposits represent around 40 per cent of wealthy clients’ portfolios, he reports.

Itaú has a bank in the UK and a full bank in Switzerland, while from Miami it serves LatAm clients investing offshore.

The Brazilian institution has increasingly positioned itself as a digital bank, even calling itself “Digitau”. Today, 80 per cent of its wealth management clients use digital channels to execute their transaction, although robo-advisory is still “at a research stage”.

Last year, Itaú inaugurated a major facility, the Mogi Mirim Technological centre, aimed at increasing the bank’s data processing capacity. It also launched a technological entrepreneurship centre in partnership with Redpoint e-Ventures to support start-ups and innovation. ET

Best Private Bank in Mexico
BBVA Bancomer Banca Privada 

For BBVA Bancomer Private Bank, part of Spain’s BBVA group, 2015 saw the consolidation of a number of projects related to the expansion of its business, both in terms of services and geographical footprint. During the course of the year, the bank managed to grow its top and bottom lines, as well as its market share in Mexico’s private banking sector.

BBVA Bancomer prides itself on its approach to customer services, based around its servicing franchise ‘Experiencia Unica’. Launched in 2013, the methodology is aimed at strengthening the customer experience by standardising the way private banking advisers interact with clients, thus ensuring they all receive the same quality of service, regardless of their location.

Last year, Experiencia Unica was introduced across the bank’s ultra high net worth branches. The UHNW segment is becoming increasingly important for the business and last year it opened a new dedicated office in Monterrey, to reach the growing number of UHNW clients across Mexico’s northern region.

The investment process is executed by a team with long experience in the wealth management sector who define tailor-made investment strategies according to their clients’ volatility, risk aversion and capital needs.

In 2015, BBVA Bancomer expanded its product offering, to include a wider range of mutual funds and structured products. In response to demand for more diversified and sophisticated investments, the bank launched three new sub-advised funds, investing in commodities, market neutral equity and derivatives, respectively.

Recognising the importance of servicing clients through their families, BBVA Bancomer runs a number of educational programmes aimed at their clients’ offspring. Last year, the bank run three of these courses in collaboration with several prestigious schools, where the younger generations had to opportunity to network and learn about topics related to wealth management. PG

Best Private Bank in Chile
LarrainVial

LarrainVial offers private banking services to clients with asset of more than $1m. During 2015, the bank’s main strategy focused on growing its assets under management and attracting new talent, at a time when the Chilean wealth management industry was weakened by global market volatility.

“We managed to attract many experienced bankers, dedicated to bringing new clients and their assets,” explains Gonzalo Córdova, head of wealth management. 

The introduction of new products, especially those oriented towards alternative investments, also resulted in new inflows of client assets. “We have been aggressively expanding our product offering in alternative investments, mainly through private equity – including co-investments or funds of funds – and other products that are not as liquid as other more traditional instruments, but offer higher profitability,” he adds.

The move towards alternatives involved working closely with other areas of LarrainVial, such as its corporate finance division and its private equity subsidiary Activa.

LarrainVial also launched an active portfolio management service called Cuenta Activa, especially designed for clients wishing to delegate the management of their investments to the bank’s team of experts.

Another innovation was the creation of local tax-efficient investment vehicles, in response to the country’s latest tax reform. “These instruments are tailored to the new requirements introduced by this reform, something of great use for our clients,” explains Mr Córdova.

Looking ahead, the bank is keen on rekindling client interest in hedge funds, not just through products but also through education about this type of investment. 

“Hopefully, we can begin introducing them into our recommended portfolios in the future,” he adds. PG

Best Private Bank in Colombia
BTG Pactual

The plunge in oil prices has badly affected the oil-dependent Colombian economy, which has experienced a huge drop in equity markets, a steep rise of interest rates, high inflation and up to 50 per cent currency depreciation. This scenario, combined with political uncertainty and controversial fiscal issues, has posed serious threats to domestic wealth management growth.

To navigate this environment, BTG Pactual has broadened its real asset investment offering launching new solutions uncorrelated with oil prices, and has worked with the group’s investment bank, the largest in Latin America, on mergers and acquisition mandates, in order to address refinancing of real assets and take advantage of liquidity events. 

Liquidity events created by raw land and real estate opportunities, as well those created by M&A, are key growth opportunities for the Colombian wealth management industry. 

“Colombia is an interesting target for many multinational companies and private equity funds and most of the peso-denominated wealth in Colombia is still in real assets,” explains Rogerio Pessoa, head of wealth management at BTG Pactual.

Portfolio diversification is key. “The exposure over the last couple of years to dollar assets, underweighting on equities and the search for absolute return allowed our discretionary and large portfolios to post positive returns even in the worst capital market years for COP-denominated assets,” claims Mr Pessoa, adding that new regulations and the amnesty process are a huge growth opportunity too.

Colombia and Chile, together with Brazil, are the key focus of the bank’s onshore growth plans, pursued also through acquisitions, mainly on the investment banking side.

For clients’ offshore needs, BTG Pactual has a booking centre in the Cayman Islands and a full service broker dealer in the US, where clients are served from Miami and New York. 

Having both strong local presence in the region’s main markets and offering clients access to more traditional international booking centers has become increasingly important, says Mr Pessoa. “Clients in the LatAm region are looking for a differentiated product shelf that comprises not only quality locally managed products but also a diverse offering of international assets, ranging from plain vanilla solutions to a complex line of product and advisory services.” 

The confidence crisis the bank suffered following the arrest of its former CEO last November led to heavy withdrawals of client money. However, the group was able to maintain its solvency by managing its liquidity and selling assets and businesses. In Switzerland, just a few months after acquiring it, BTG Pactual sold BSI bank to EFG, while keeping a significant stake of the combined group, of which it is now the second largest shareholder. 

BTG Pactual’s current private client assets under management stand at BRL70bn ($21.7bn), down from BRL84bn at the end of 2015. However, the bank has seen positive inflows from the second quarter of this year, as clients returned money and new clients were brought in, states Mr Pessoa. 

Going forward, a major task will be to integrate the bank’s strong local offices with its growing and broad international platform of products and services, he says. ET