Global Private Banking Awards 2017: Winners’ Profiles – Best Service Offerings (Global)

Best Private Bank for Customer Service Globally;
Best Global Brand in Private Banking
Citi Private Bank

It has been tough for Citi to keep up with its previous successes in private banking. And indeed the bank has been ruthless in cutting back certain branches, particularly in high cost central London locations, as it has struggled to hit the old highs of net new money, experiencing outflows of $800m during 2016 after the bumper harvest of 2015. 

Yet it has stuck to its guns within a narrowly-defined remit of servicing ultra high net worth individuals on a global basis, managing $226bn on their behalf by offering them a “family office style” service.

Citi has been one of the leading banks in utilising customer feedback, mainly through its ‘voice of the client’ survey, but also through its high-speed digitisation project, where complaints from clients were sought and acted on at every stage of digital development. 

The bank has also made big strides in improving the networking opportunities between clients, something for which there is now huge demand among wealthy private investors, designing a family office leadership programme and setting up post-Brexit briefings with senior figures of political and economic influence, including former Bank of England governor Mervyn King and Conservative politician William Hague.

Citi still sees itself in the top five private banking players in terms of the breadth of services it can offer to its clients, but admits that base is a very narrow one. Like many competitors, it is moving away from the hedge funds space it once prided itself on and staking a stronger claim to the private equity and real estate spheres, claiming to have made good gains for the clients it guided into London-purchases after sterling slumped following the Brexit referendum.

For the moment, at least, Luigi Pigorini, regional boss for Europe, the Middle East and Africa, remains upbeat. And key private banking consultants say he is right to be so. Whereas rivals spend vast sums promoting their brands, their belief is that Citi is one of the few to deliver on the brand’s promise. YB

Best Private Bank in Asia;
Best Private Bank for Innovation
DBS

Singapore’s DBS has finally started looking outwards, opening new offices in both London and Dubai, rather than just contentedly serving as a leading bank in Singapore and neighbouring south-east Asian economies. 

This strategy is no doubt helped by excellent financial performance, with client assets now exceeding $80bn, following recent acquisitions of wealth management units at ANZ and Société Générale, and nearly $12bn of net new money during 2016. DBS says it has grown wealth management by 20 per cent annually over the last six years.

Management says recent success is down to “doubling down” on the basics of integrating banking and wealth management solutions, helping clients build regional relationships and generating much pan-Asian economic research. This effort has been further amplified by strengthening leadership, accelerating the digital agenda and fully realising revenue from the recent integration of the SocGen private banking franchise, say bank bosses. In addition to improving the DBS iWealth platform in Singapore, technology allowing relationship managers to onboard, service and transact for clients via their iPads is being rolled out across southeast Asian region. They have high hopes for the digital footprint in Indonesia and Taiwan in particular, as this is where the recently acquired ANZ brand had strong penetration.

DBS has always been strong in digital innovation. But it feels it has now learned from its mistakes, having been one of the vanguard of the private banking field to explore artificial intelligence and manipulation of big data.

“Having experimented with AI and learnt from various partnerships with fintech companies, our teams are now trained in agile processes, familiar with running customer-centric journeys,” says Su Shan Tan, group head of consumer banking and wealth management at DBS Bank. Relationship managers, she adds, are now focusing on “data as the new currency on which to provide relevant and timely wealth advice and solutions to our customers”.

This focus on data appears key to the DBS strategy, especially where portfolio management is concerned, combining algorithms with details about clients’ goals, risk appetite and available assets to both recommend specific products and rebalance allocations in response to changing market conditions.  YB

Best Private Bank in Europe for Philanthropy Services;
Best Private Bank for Socially Responsible and Impact Investing
Lombard Odier

While those in the tight-knit Swiss private banking community have always had a high opinion of Lombard Odier and its partners as something of a “white-gloved” traditional private banking institution, its partners have also had somewhat of a maverick flare about them, especially when it comes to philanthropy and investing with a social as well as economic purpose.

There are few banks which really take impact investing and SRI seriously, but most have realised that they have to as it is something clients are increasingly demanding. 

“Impact investing is already a differentiator, particularly as clients see that it can deliver investment returns that help them meet their many and varied financial objectives,” says Patrick Odier, senior managing partner of the Lombard Odier Group in Geneva. 

Most private clients, he believes, want to have a more direct impact on societal issues without compromising on financial returns and they can see that investment in these new strategies “stacks up” compared to traditional equity or bond funds, he adds.

Lombard Odier pioneered SRI strategies in the mid 1990s, developing a proprietary approach to investment and issuer analysis which went beyond just looking at companies’ own ESG criteria. The bank analyses 5000 companies, scoring them for ‘consciousness’, ‘actions’ and ‘results’ (CAR), screening out a much larger number of companies than competitors. Lombard Odier’s ‘controversy radar’ also analyses huge losses incurred by companies involved in controversial practices and avoids investing in them. 

“Returns and impact go hand in hand,” says Mr Odier.

When developing relationships, the bank has become conscious that philanthropy now has become more important than previously, sometimes eclipsing a client’s business and investment needs. Among clients, says Mr Odier, philanthropy is now “top of mind, because it is about a deeply personal dimension of significance, what one will leave behind, and which family ethos to pass on to the generations that follow”. YB

Best Global Private Bank;
Best Private Bank for Philanthropy Services Globally;
Best Private Bank for UHNW clients;
Best Initiative of the year in client-facing Technology
UBS Wealth Management

UBS Wealth Management is a player that continues to be reckoned with, overseeing more than $1tn in client assets for non-US clients, and slightly more in the US. But unlike global brands such as Coke and Pepsi, the Swiss bank keeps re-inventing itself in order to maintain its global leadership ranking.

The bank is no stranger to chassis-shaking transitions. It was the first wealth manager to say, more than 10 years ago, that the old ways of using Switzerland for tax and secrecy purposes and as a base from which to sell structured products were past their sell-by date. It was the first private bank to settle with US authorities for irregular practices, the first to embrace asset management as its raison d’être and the first to champion both hedge funds and ETFs as core products within discretionary portfolios.

Today, that transformation continues apace, with investment management and portfolio construction becoming increasingly formalised and leveraged globally, coupled with asset allocation advice from chief investment officers, backed by technology from Swiss-based platforms. 

Activity has been particularly pronounced in the global family office and ultra high net worth divisions, now built up to being potentially the highest earners of the bank, eclipsing attention previously lavished on the Asia Pacific operations, based out of Hong Kong and Singapore. The Far Eastern jewel, once so far ahead of competitors, while still important, is no longer the major growth engine of business, with a much broader spread of clients targeted geographically, tempted by a wider mix of strategies, including impact investing, philanthropy and private equity.

Joe Stadler, head of the bank’s ultra high net worth business, points to “significant progress in Europe” now starting to rival the bank’s undoubted Asian expertise, with what he calls “big money” consolidating into the hands of a smaller number of specialist firms. “We are the main beneficiary of this in Europe, as many of our previous competitors have wound down or exited the business,” he says.

Where once the bank prided itself in the hard push of structured products to its richest clients, with all advisers required to sell certain quotas, today it is more likely to seek praise for its social conscience and warmer approach to clients, although the ruthless financial streak has not disappeared.

“UBS is unique in its approach to the softer side of the business,” says Sara Ferrari, head of the global family office group at UBS. “We are more attuned to both impact investing and female clients. These are among the key challenges and opportunities we have to embrace to better align ourselves with our client base.”  YB

Best Private Bank in the US;
Best Private Bank in the US for Succession Planning;
Best Private Bank for Family Offices
Northern Trust

Posting a respectable set of metrics with assets managed for private clients rising from $227bn to $248bn in 2016, alongside a hugely impressive ratio of each adviser working with less than 30 clients, Northern Trust is also revising its compensation structure to remove product sales-based incentives and align bonuses to client retention and growth.

The Chicago-based wealth managers’ hierarchy puts the success down to “breadth of capability, depth and experience and integrated delivery,” but beyond this corporate speak is a more fundamental reason for the bank’s ability to stay at the top of rankings. Northern Trust has hit on the formula of how to marry old fashioned wealth management with technology and goals-based asset allocation techniques in a way that not only helps clients, but keeps the bank very profitable, with the help of a significant infrastructure built for custody customers, leveraged for wealth management. 

“The custody infrastructure we have developed is a foundational contributor to Northern Trust’s wealth management success,” admits Stephen Fradkin, president of Northern Trust Wealth Management, who believes having $9.3tn in assets under custody and administration offers the bank an “extraordinary competitive advantage” in addition to economies of scale.

Deep conversations with customers are, where routinely possible, backed by empirical data with technology helping visualise outcomes. “Our goals-driven wealth management is a fusion of adviser-driven experience supported by robust digital technology,” ventures Mr Fradkin, typical of Northern’s crop of veteran leaders who appear traditional in outlook but are happy to entertain and encourage constant innovation programmes, influenced by other industries, especially those based in Silicon Valley. “It is not an either-or experience as much as it is taking the best that both advisers and technology have to offer,” he says. 

But the more time-consuming and onerous disciplines of succession planning are not ignored by any means, with this service seen as providing a “window to the entire family, business and wealth structure of a client,” according to Mr Fradkin. “As we work with clients on succession, we are privy to the core intentions, business and family dynamics of our clients, which informs how we can best help clients plan and manage their wealth.” 

The bank is also starting to respond to criticism of being an undemocratic, US-centric institution, focused on a tiny sliver of clients. Mr Fradkin talks both about opportunities to serve a broader spectrum of affluent families across the US, served by 60 offices, and the notion of serving “Families without borders”, the title of Northern Trust’s recent family office forum in London. Acquiring the Swiss-based wealth fund administration business of UBS, adding jobs in both Switzerland and Luxembourg, has also made the claim towards being a cross-border player marginally more plausible. YB

Best Private Bank for Entrepreneurs
Bank of the West Wealth Management

Bank of the West, owned by French giant BNP Paribas, claims to have benefited from substantial investments in technology to both increase efficiency and match customer demand for services. 

With a surge from $10bn to $12bn in assets managed for clients during 2016, the entrepreneur-focused bank appears to feed off Silicon Valley, so close to its San Francisco base. Wealth advisers are also located in both Palo Alto and San José, with presence in other US tech hubs including Seattle, Denver and Los Angeles. Southern California and other regions are targeted due to their high concentration of people who have created wealth through business ownership in a variety of industries, including food distribution, healthcare innovation and recycling, not just technology.

Specialist staff devote time to providing support for private businesses, working with entrepreneurs, especially women, and investing for social impact through SRI parameters.

Although there is some independent branding and focus on regional clients in the US, the French parent bank very much sees this west coast US firm as one of its “global wealth management hubs”. While the bank claims to be nimble, agile and innovative, it benefits hugely from the global infrastructure and central budget for technology and expertise dispensed by BNP Paribas from Paris.

What the bank has done, however, is to recognise that needs on the west coast of the US can be very different from those elsewhere, as business creation and ownership represent a greater and increasing part of wealth being accumulated and that services need to be designed specifically to cater for this. This becomes particularly important, believe Bank of the West leaders, where businesses are being passed along to the next generation or to employees. 

The bank wants to further reach out using this mindset to family members and their key employees – who play an important role in both sustaining and growing the business over time – not just concentrating on the family leaders and business owners. YB

Best Private Bank for Digital Communication
BBVA Banca Privada

BBVA Banca Privada (BBVA PB), which was also highly commended in the categories of Best Private Bank in Spain, innovation and client-facing technology, is a key player in Spain’s private banking sector, with one of the largest numbers of both ultra high net worth and high net worth clients. 

Jorge Gordo Naveso, head of private banking, explains that the key to their success lies in their business model, based on a “customer-centric approach” which combines technology and innovation with first-class personal service.

“Continuous improvement of the customer experience is our primary concern, and we want to turn this into our main competitive advantage over the next few years,” Mr Gordo explains. “The large digital transformation that the BBVA group is undergoing, combined with changes to our organisational structure, is contributing to reinforce our customer-centric approach.”

As part of its ‘digital transformation project for private banking’ strategy, BBVA PB has developed a new set of digital solutions to enhance the user experience, add new functionality and transparency for its customers, and comply with new regulatory demands.

“BBVA Banca Privada is evolving quickly as new and disruptive players emerge. As a result, we have improved our customer experience by promoting our digital communications model – for example client onboarding, chat functionality, digital signature and so on – which have significantly improved relationships between private bankers and clients, as well as between private bankers and the bank,” he says.

The introduction of remote technology allows clients to sign contracts, orders and all kinds of documents remotely.  Customers can also engage in safe conversations with private bankers, exchange documents, execute orders and schedule meetings online. 

BBVA BP has also provided all its bankers with a tablet with several applications developed using client-facing technology, such as ‘my private client’, which provides the banker with all the information regarding the client, or ‘virtual private banking desk’, which enables onsite analysis, provides updated valuation, and allows customers to carry out transactions as if they were in a physical branch. 

“In the context of a very challenging environment, our purpose is to build a closer private bank, and for this we have launched one of the industry’s best face-to-face and digital media services, available 24/7 to all our customers,” Mr Gordo adds. PG

Best Private Bank in Belgium (BNP Paribas Fortis);
Best Private Bank in France (BNP Paribas Banque Privée France);
Best Private Bank for Use of Technology
BNP Paribas Wealth Management

Client assets at BNP Paribas Wealth Management are steadily creeping up, with another $15bn of net new money added during 2016, reaching a grand total of $390bn, 75 per cent of which is sourced from European families.

Unlike most competitors, the French bank is now creating a truly pan-European wealth management footprint, with ambitions in at least 10 countries, and centres for high net worth individuals having been opened in France, Italy, Belgium and Luxembourg. Belgium is currently the second largest private banking market within the group after France, the bank saying it remains “very attractive” in terms of future growth prospects. 

The bank has also trained up 120 specialist relationship managers to service the top tier of its clientele, providing expertise in corporate advisory, structuring and jet finance. They are also providing advice on key areas which the most wealthy private clients now typically demand of their banks, including private equity, real estate (BNP Paribas prides itself in expertise on French rural properties), socially responsible investing and philanthropy.

BNP Paribas has been involved in a major push on attracting and servicing entrepreneurs, particularly working on solutions for family offices, next generation members and female clients, in conjunction with improvement and re-invention of the client experience through digitisation and partnership with fintechs.

During the last two years, the bank has been busy hosting innovation groups, working with and gathering feedback from 100 key clients in locations including Brussels, Luxembourg, Paris, Geneva, Singapore and Hong Kong, creating digital solutions built in dedicated spaces described as “factories”. These have included: digital applications which can connect “Mega Wealth” clients with assets exceeding €100m ($118.5m), allowing them to share investment ideas and swap details of projects and assets; a biometric pass allowing access to all bank services through voice, fingerprint and facial recognition; and an advisory app giving clients direct details about the bank’s “buy” and “sell” recommendations.

This latter strategy, which has moved into the realm of ‘predictive behaviours’ has involved hiring a modest cohort of data scientists and analysts based in Singapore. “We are now making better use of data,” says Vincent Lecomte, co-CEO of BNP Paribas Wealth Management. 

“We have to improve and adjust our client propositions. For instance, there are some clients who could potentially be invested in private equity investments. Through analysis of client behaviour and interests and some of our proposals, we can work to improve our efficiency and meet client needs that they would not have expressed spontaneously.” YB

Best Private Bank in the United Arab Emirates;
Best Private Bank for Islamic Services
Abu Dhabi Islamic Bank 

Abu Dhabi Islamic Bank (ADIB) has managed to attract new clients and increase market share, even in a tough operating environment. The bank has now a balanced customer base, across Abu Dhabi, Dubai and the Northern Emirates, and of UAE nationals, as well as Arab, Asian and Western expatriates.

ADIB continues to invest significantly in customer experience, introducing new ways to enhance its offering to existing clients, as well as targeting new ones in both the expatriate and UAE national segments, through a strong emphasis on digital delivery.

The bank has invested heavily in its digital infrastructure. “To that end our biggest transformation yet has been partnering with Fidor Bank to launch the region’s first community-based digital bank,” says Mohammed Azab, head of private banking at ADIB. 

“The new online platform is designed to fit the lifestyle of millennial consumers, as well as those looking for a digital offering that matches their banking needs.” 

When it comes to portfolio management, ADIB Private Banking is committed to open architecture and it does not offer discretionary asset management. It has developed a series of locally oriented advisory portfolios that focus on sukuk and domestic equities. Being an Islamic bank, it carefully evaluates all the products and services offered to clients to make sure they are in line with their shared values. 

Mr Azab admits Islamic banking still presents some challenges, highlighting the need for changing perceptions in order to become truly mainstream. “We are confident that we are on track to achieve this, as we did following our acquisition of Barclays Bank’s UAE retail operation [in 2014]. This was proof that customers of conventional banks can easily be integrated into an Islamic bank if we offer attractive products and an excellent customer experience,” he says.

“Our research shows that Islamic banks strike a chord with people, not because of religion, but because of ethics. People are even more willing to use Islamic financial services when banks demonstrate their ideals of partnership, respect for the interests of the customer, and simple, transparent and honest business practices,” Mr Azab adds. PG

Best Private Banking Boutique
Banque SYZ SA

Despite experiencing significant outflows of nearly $3bn during 2016, Banque Syz has managed to turn a $40m loss into a small profit, having outsourced operational activities. A relatively youthful operation, having just celebrated its 20th anniversary, the bank has, to the delight of chief executive and majority owner Eric Syz, secured a berth in Switzerland’s top 20 private banks, running client assets of nearly $48bn following the acquisition of RBC’s local franchise.

From its formation, Banque Syz was all about managing assets in a more innovative way than what the founders saw as Geneva’s staid private banks. Mr Syz says the rationale for seeking alternative sources of alpha is very much still there, although he has now switched emphasis significantly from hedge funds to private equity. He also has to contend with changing client appetites in a challenging operating environment. The allocation to alternatives among his client base is now down to less than 10 per cent, compared to closer to 30 per cent in the pre-Madoff heyday, when hedge funds were considered the must-have accessory for high net worth individuals banking through Switzerland.

But he feels renewed interest is coming. “There is a clear shift in demand in Europe towards real estate, private equity and venture capital. Clients have been able to take out some of the potential volatility spikes in this way,” says Mr Syz, believing that the “free lunch” of living off “leveraged beta” returns is finally over for private clients.

Today, the bank prefers to shepherd clients into private equity, spreading portfolios over five to 10 key investments and is busy promoting this asset class to potential clients through regular events.

But despite the perception of Syz as an investment-led firm, the private banking service Syz provides goes well beyond investments, according to the bank’s co-founder, who has recently bought out his partners. “We set up Syz because asset management was not being taken seriously enough. But private wealth is complex and emotional. There are generational and diversification issues and there is always a question of how we meet expectations,” says Mr Syz. “The first thing we have to ask ourselves is: ‘What is the purpose of the client’s wealth?’ You need a holistic approach in private banking, as it is a multi-faceted business.”

After recent acquisitions, the question is whether Banque Syz can maintain its boutique culture while climbing up the private banking big league. With 240 staff, the bank is being forced to move from its traditional perch above the Jimmy Choo shoe store in Geneva’s premier shopping street, Rue du Rhone, to more spacious premises at the Quai des Bergues on the other side of the lake. This is probably one of the clearest indicators of the bank’s maturity in its journey from disruptive new kid on the block to an accepted member of the Swiss financial ecosystem. YB

Best Private Bank in Liechtenstein;
Best Private Bank for Growth Strategy
LGT

Many private banks like to cultivate an impression of grandeur, but few can boast that they are owned by a royal family.

LGT, the private banker and asset manager, is an exception: it began as family office for the Liechtenstein Princely Family, which remains its sole shareholder. 

HSH Prince Max von und zu Liechtenstein, a member of the Royal family, is LGT’s overall CEO, with Thomas Piske the CEO of the private banking unit. 

Mr Piske regards the ownership structure of LGT as “a very important success factor”. 

“The combination of LGT’s governance structure, our clear business focus on investment management and our culture provide us with a very special edge,” he says. “To have just one shareholder in the form of a foundation which is linked to the Liechtenstein Princely Family creates a highly stable and efficient governance structure.” 

The bank’s successful growth strategy is all the more striking because of the temptation among banks that are market leaders in their own particular home market to opt for an easy life based on domestic success.

In particular, many private banks have found it difficult to break into Asia, but LGT’s Asian private banking assets increased by an annualised rate of 17 per cent between 2009 and 2016. Its Asian private banking assets have reached $50bn, based partly on this organic growth and partly on its acquisition of ABN Amro’s private banking business in Hong Kong, Singapore and Dubai in 2016. Mr Piske credits this to having a long-term focus. 

“We have been operating in Asia without interruption for over 30 years and have a very stable management team there. During that time, we have continuously expanded the business, which gives us credibility.”

Mr Piske also thinks the firm’s royal pedigree goes down well in Asia. As he puts it: “We have an interesting story to tell: our owner, the Princely House of Liechtenstein, has built, preserved and developed its wealth over a period of 900 years. That is an impressive track record.”

Some acquisitions by other private banks have gone badly over the years, but LGT’s in Asia and other markets have generally gone well so far. It has also acquired Vestra in London. “Cultural fit is a very important factor for us when it comes to acquisitions,” says Mr Piske. 

“During the due diligence process, we very carefully consider whether management and the employees are a good fit for us. That isn’t something that can be quantified or determined precisely. Instead, it often depends on the various impressions we get during the various discussions and interactions.”

In the SRI field, the private bank, which has been highly commended in the SRI/Impact Investing category, has developed the LGT Sustainability Rating, which provides transparency in terms of the sustainability characteristics of equities, bonds, funds and ETFs using clearly defined criteria and a broad pool of data. DT

Best Private Bank in Canada;
Best Initiative of the year in Relationship Management Technology in North America;
Best Performing Private Bank
RBC Wealth Management 

The strong financial performance reported by RBC in 2016, showing an increase in net income and assets under management by 35 per cent and 14 per cent respectively, is testament to significant improvements made to its value proposition and client service. 

In Canada, the collaboration of the wealth business with the commercial bank, aimed at deepening relationships with business owners, by discussing succession planning and financial goals and helping them plan for personal and business milestones – generated “strong traction and significant uptick in the number of franchise clients, those having both a personal and business financial relationship with the bank,” explains Doug Guzman, group head, RBC Wealth Management & RBC Insurance.

To address the substantial intergenerational wealth transfer expected to occur in the country over the next few years, the institution, the winner of the Best Private Bank in Canada for six consecutive years, also launched a programme to help advisers support the needs of multi-generational families.

Drawing on results from its recent study – which found that 84 per cent of women have full or joint responsibility for overseeing the family investment portfolio – a key focus for the bank has also been to train advisers to better understand nuances in preferences, attitudes and behaviours between female and male investors, while finding ways to better attract, retain and develop female advisers. 

Focus on client service, greater cross-business and cross-function collaboration, and continued investments in people and innovation were the main factors that helped the bank achieve the top spot in the best performing category, states Mr Guzman. The result emerged from key performance indicator quantitative analysis on private banks globally by Scorpio Partnership, the wealth management consultancy. 

The acquisition of City National, a US private and commercial bank, effective the first quarter last year, enhances and complements RBC’s presence in the US, its “second home market”. The combination of the US wealth business, City National and its US Capital Markets business provides “a powerful and scalable engine for accelerated growth in the US”, believes Mr Guzman.

The bank’s Advisor’s Virtual Assistant (AVA) application for iOS and Android devices launched in Canada and the US last year, impressed our panel of judges as the best initiative of the year in RM Technology in North America. AVA provides advisers with real-time access to client insights and all the revelant information they need to be more productive, while meeting clients’ evolving needs. 

“Going forward, we plan to continue to release new improvements and functionality for AVA, as we continue to invest in digital innovation to strengthen the client-advisor relationship,” states Mr Guzman. ET