Global Private Banking Awards 2018: Winners’ Profiles – National Winners (The Americas)

Best Private Bank in Latin America;
Best Private Bank in the US;
Best Private Bank for UHNW clients
JP Morgan Private Bank

JP Morgan enjoyed strong financial performance in 2017, with $39bn in net new money helping boost client assets to $526bn, the large majority sourced from North America and ultra high net worth individuals. 

Underlying these results is focus on client advice and a “comprehensive approach to managing clients’ wealth across both sides of their balance sheets,” explains Kelly Coffey, CEO, US Private Bank at JP Morgan.

The global private bank’s offering spans day-to-day banking needs, lending, investing, trust and estate planning, as well as philanthropy.

Under the umbrella of JP Morgan Chase, wealthy clients have access to asset management, investment banking and commercial banking capabilities, with the institution continuing to focus on strengthening the relationship across these businesses. 

“By helping clients across more areas of their financial lives we can build better, more integrated solutions that meet all of their wealth management needs,” adds Ms Coffey. 

Increasingly, managing clients’ wealth means helping them meet their goals. 

“Understanding our clients’ goals and intent for their wealth allows us to help them plan and invest for better outcomes, in line with how they think about their wealth, both in the short- and long-term,” she says.

A goals-based strategy also covers lifestyle and spending goals, wealth to leave to beneficiaries, wealth preservation across generations, and growth. 

When it comes to asset allocation, alternative investments occupy a top spot. “Clients have a need for alternative investments more than ever before,” says Adam Tejpaul, CEO, Latin America Private Bank, JP Morgan. In this space, the bank is pursuing areas of growth and innovation, to tap into parts of the global economy supported by long-term, secular trends, including technology and healthcare, he explains. It is also actively looking for opportunities to invest in assets generating yield, either from private debt of mid-market corporates, or real assets across different geographies. 

“Given the length of the current cycle, we are slowly starting to set aside some dry powder that we could deploy in areas that could face a more challenging period in the next few years, whether through managers focused on distress or deep value,” adds Mr Tejpaul.

While direct investments continue to appeal to clients, many prefer liquid alternative strategies, reports Ms Coffey, and the bank’s focus has been on hedge fund strategies able to produce uncorrelated return streams, particularly in periods of heightened volatility and rising interest rates. 

JP Morgan allocates the largest proportion of its investment budget to technology, to continue to build out its digital platform, and has rolled out an online trading platform, You Invest, enabling clients to invest by themselves.  

It has also “completely overhauled” its training and development framework, and recently launched an internal forum that helps advisers share best practices and materials.

In 2017, the US Private Bank began a five-year growth plan to add 1,000 new advisers across more than 20 new and existing locations. “We want to have a local, on-the-ground presence in all the markets where clients need our advice and services the most,” adds Ms Coffey. ET

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

Butterfield has had another good year. It became the largest domestic provider of wealth management and trust services in Bermuda in May 2016, after completing the acquisition of Bermuda Trust Company Ltd and the private banking investment management business of HSBC in Bermuda. Building on this, in 2017 it recorded a 38 per cent rise in operating income in its Bermuda business. Butterfield tributes this strong increase, matched in other locations, to strong fee income from its wealth management and improved interest income from its banking business, because of an efficient deposit base and rising rate environment.

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.  

One interesting service being used by clients in Bermuda and the Caymans, as well as local customers, is Butterfield Mortgages Limited, which lends to support the purchase of premium properties – specialising in bespoke mortgages. 

“Our face-to-face, high-touch service approach allows us to understand our HNW/UHNW clients’ unique requirements for building, protecting and transferring wealth,” says a spokesperson at the bank. DT

Best Private Bank in Brazil;
Best Private Bank for Customer Service (Latin America)
Itaú Private Bank

Latin America endured another challenging year in 2017, with Brazil mired in  recession and other countries across the region affected by economic and political turbulence. Despite the adverse environment, Itaú Private Bank maintained a leading position in the market, in terms of financial results and client approval.

“When Brazilian interest rates fell, customers began to look for more profitable and sophisticated alternatives, and we were prepared to present them with customised offers that were in line with their profiles and expectations,” says Luiz Severiano Ribeiro, head of Itaú Private Bank Brazil. He explains his team worked intensively to enhance their product offering by adding more sophisticated investment instruments, both onshore and offshore.

The bank’s recent growth has been mainly organic, helped by partnerships with Itaú Personnalité, the bank’s mass affluent business segment, and Itaú BBA, its corporate and investment banking division. The acquisition of Citibank’s Brazilian retail segment, approved in 2017, has significantly increased Itaú Personnalité’s client referrals in recent months. 

Investment in technology has been a key focus for the management team. “We continue to invest in technologies that enhance the customer experience by increasing the functionality of our applications, either by simplifying communications tools or by developing tools that improve our day-to-day efficiency, and thereby allow us to be more available for our customers,” he explains. 

Although demand for environmental, social and governance (ESG) investments remains modest in Brazil, Mr Severiano expects this to grow as the market gains greater understanding about these products.

“To ensure that Itaú stays at the forefront of this trend, the bank has also implemented a cross-departmental process of ESG analysis which makes it possible to estimate the impact of social and sustainable initiatives on various elements of our portfolio,” he explains. “Today, 90 per cent of Itaú’s assets under management are covered by this ESG analysis.” PG

Best Private Bank in Canada
RBC Wealth Management

RBC Wealth Management, the undisputed leading private bank in Canada, having won the award since the country category was introduced in 2012, has continued to work on its ‘one bank’ model, launching new initiatives aimed at driving growth in “shared client relationships”.

These included the roll out of premier banking, designed for HNW clients with more simplified banking and credit needs, and helping business owners plan for both personal and business goals, through integrated financial and succession planning. 

This year, the bank also devised a programme offering tailored property and casualty insurance solutions to wealthy clients with more sophisticated insurance needs.

“We continue to see significant opportunity to deepen relationships within our existing client bases in both Wealth Management and Personal & Commercial Banking,” says Doug Guzman, group head, RBC Wealth Management and RBC Insurance. “We believe we can leverage the combined strengths of RBC to deliver more value to our clients.” 

The institution has also invested in data and digital capabilities to provide a complete view of its shared clients, in order to deliver more “personalised and timely insights”.

“One of the biggest challenges for any ‘one bank’ concept is culture,” acknowledges Mr Guzman. RBC has introduced a new ‘leadership model’ for all of its employees which defines the capabilities and behaviours that contribute most to its future success, which underscores that “how we meet our goals is just as important as what we achieve”.

In 2017, it developed a new programme ‘Money in Motion’ in Canada, encompassing an adviser education campaign and new planning tools, as well as financial literacy education for clients. 

A key objective is ensuring all advisers understand the need to engage the whole family in any financial or succession planning conversations. Adopting a family-centred approach to wealth planning helps ensure the financial needs of the whole family, parents, spouse and children, are met, explains Mr Guzman. As women are responsible for controlling an increasing proportion of wealth through accumulation and inheritance, various initiatives of the bank’s thought leadership programme have focused on female investors, including reports, white papers and a global survey with The Economist last year.

“Business and family succession planning are increasingly important aspects of the holistic advice we provide our clients,” says Mr Guzman. “We see increasing demand for these services, given the massive transfer of wealth that we anticipate over the next decade.” ET

Best Private Bank in Chile
LarrainVial

A broader range of product offering in the alternative space contributed to drive significant net new money at Chilean bank LarrainVial in 2017, which saw assets under management rise 25 per cent to more than CLP4.6bn ($6.8bn).

Thanks to close collaboration with its corporate finance division and private equity subsidiary, LarrainVial has been able to offer clients innovative investments, including controlling stakes in local and foreign companies in the healthcare and energy sectors. Through a strong relationship with its third party distribution team, the institution has also given clients access to products managed by global asset managers, mainly alternatives, traditionally reserved for institutional investors.

Thanks to these efforts, alternatives today represent almost 25 per cent of assets in HNW client portfolios at the bank. 

Low levels of returns combined with a strong search for yield, obtained by sacrificing liquidity, and disintermediating commercial banks or investing in early stage companies, are conducive to alternative investments, says Gonzalo Córdova, head of wealth management at LarrainVial. 

“Given this scenario, we look for alternative funds that invest in credit funds, private capital, real estate development or real estate income to increase yield and diversification,” he says.

With the goal of increasing recurrent income, today mainly generated by discretionary management fees and mutual fund rebates, last year the bank introduced a fee based advisory model, achieving some success. A key pillar of the bank’s advisory services is its open architecture model, supported by international platforms such as UBS, Pictet, Pershing and Allfunds, whereas discretionary portfolios are managed in collaboration with LarrainVial Asset Management.

To improve risk management, the bank developed a new real time checking system, which aims to better align client portfolios with the recommendations of the advisory team.

This initiative was combined with changes to the private bankers’ remuneration system, which seeks to eliminate conflicts of interest and product push. This has also allowed the bank to set other objectives, such as cross-selling of products, and documentation processes allowing better alignment with compliance, explains Mr Córdova. ET

Best Private Bank in Colombia
Bancolombia

Digitalisation was a big theme for Bancolombia in 2017, marked by the launch of ‘Investbot’, a platform which allows clients to receive, in a personalised and automated way, recommendations on their current positions to help them make decisions in accordance with market movements and their investment objectives.

“This platform allows our clients to intuitively choose the investment plan that best suits their objectives and the system makes the investments automatically,” says Daniel Peláez Gómez, regional managing director, private banking. More than 1,000 clients are currently investing through Investbot, with a total invested volume of more than COP80bn ($26m).

Part of the Bancolombia Group, the private banking business serves 29,000 clients, and has branches across Colombia’s main cities. In addition, the bank is working on consolidating its regional presence by expanding its business in Panamá, El Salvador and Guatemala.

Innovation and digitalisation are two of the ways Bancolombia is responding to the generational change taking place in Colombia, a change which poses great challenges for private banks, in relation to how they relate with their clients and develop trustworthy relationships. 

“Another big challenge we face is the reduction in margins and the aggressive competition in commissions, which are increasingly lower,” Mr Peláez Gómez explains. “Our digital transformation, our customer-focused strategy, and our broad portfolio of products and services are our main strengths to face our competitors.”

In addition to the ongoing investment in technology, the bank plans to expand its universe of alternative investment products. “We will continue to work on developing tools that make life easier for our clients when it comes to thinking about their investments,” he states. PG