Private Banking Awards 2009

From Awards 28 October 2009

By Yuri Bender

With private banks and wealth managers facing huge challenges in the current financial climate, the inaugural Global Private Banking Awards reflect those institutions that are successfully addressing their clients’ needs, writes Yuri Bender

PWM’s inaugural Private Banking Awards were established with the aim of provoking a move to greater transparency and accountability in a growing global wealth management industry, which sees itself increasingly under the gaze of national and supranational regulators. We also felt it was time to properly reward those institutions who are doing their best for the private client. Our sister magazine, The Banker, helped us draw up the methodology. Our researchers contacted 350 private banking and wealth management institutions in Europe, North America Asia and the Middle East over a three month period to request their detailed submissions. Latin America was also recognised as a vital area of private banking expansion and is likely to be featured in 2010.

Firstly, the judges examined quantitative data supplied by the entrants. This included three years worth of figures detailing capital adequacy requirements, clients’ assets under management, asset flows, net profits, cost to-income ratios and adviser-to-client ratios. Following this, submissions on portfolio management, innovation, client communication, technology, use of third party products, fee structures and performance were all compared. The judges also looked at the various groups’ due diligence processes and in particular how they reacted to the Madoff fraud. After the shortlists had been drawn up by the judges, they were keenly debated and then the panel voted on the winners. The quantitative data supplied was verified by Scorpio Partnership, which also used a proprietary formula to compute – with a series of Key Performance Indicators – which private bank had been most effectively managed by its leadership team. The winner in this key category was Barclays Wealth.

The institutions entering the awards were also asked to nominate their best and most trusted third party providers for hedge funds and other alternatives, structured products, fund management and global custody. Man Group was by far and away the private bankers’ favourite alternatives provider. BlackRock and JPMorgan were almost inseparable, with both having built up an excellent reputation as fund providers, and the judges voted by the narrowest of margins in favour of BlackRock in a tie-breaker. It soon became apparent during the judges’ meetings however, that the offerings of the various institutions varied hugely. Some were more concerned with selling products, others with asset allocation and a select few highlighted

customer service. Some clear leaders quickly emerged. While global brands with strong local representation – HSBC performed extremely well in this screening process – a second tier, including Swiss banks Pictet, Julius Baer and Sarasin, also created a strong impression. Sarasin was particularly lauded by the panel for its unique commitment among private banks to socially responsible and sustainable investing. It took the honours in both the Portfolio Management and Innovation showdowns. What these institutions may have lacked in penetration of numerous markets, they made up for in solidity, customer service and innovation. Banks’ business models came under particular scrutiny. Pictet was praised in some quarters for its response to the changing climate in banking secrecy, with other institutions accused of “burying their heads in the sand”. This was countered by an opposing view that the only global players to really respond to this challenge, and design a viable strategy to tackle local, regulated markets through the ‘onshore’ model, were Credit Suisse and UBS.

The judges lamented the fact that UBS had declined to enter the awards. Despite the fact that the bank had suffered well publicised problems recently, the judges felt the Swiss player would have been a serious contender for a number of the accolades. HSBC was the winner in the best bank categories for the Global Private Bank and also for Asia and the Middle East. In both of those regions, its global brand has been combined with an early local presence in the majority of countries. The clarity and structure of its presentations was also worthy of note. The judges heaped praise on the success of the management team in a challenging, long-term integration of several subsidiaries into the HSBC mother-ship.

Credit Suisse, however, also deserves a special mention. The Swiss giant did not win any awards, despite excellent results and market penetration, but was pipped to the post in several categories. Among the judges, there were strong advocates of the Zurich institution in the global, portfolio management and European categories.

Best Global Private Bank: HSBC Private Bank

Highly Commended: Credit Suisse, Julius Baer

Best Private Bank in Europe/Switzerland: Pictet

Highly Commended: Julius Baer, Credit Suisse

Best Private Bank in Middle-east: HSBC

Highly Commended: Barclays Wealth/Blominvest

Best Private Bank in Asia: HSBC

Highly Commended: Credit Suisse

Shortlised: Barclays Wealth/DBS

Best Private Bank in North America: Norther Trust

Highly Commended: JP Morgan

Shortlised: Credit Suisse, BNY Mellon Wealth Management