Toasting success

From Awards 31 October 2011

By Yuri Bender

The third annual Global Private Banking Awards rewards those institutions successfully adapting to regulatory pressure and market volatility

The much awaited Private Banking Awards for 2011, from PWM and The Banker magazines, come as a whole new wave of structural change is about to hit the wealth management industry.

The recent resignation of Ossie Grübel from the helm of UBS, with the ex Credit Suisse veteran apparently trying to fight tooth and claw for the extension of the integrated model, where private banking asset management and investment banking are increasingly intertwined to boost product sales and profits, is likely to have a profound effect on the industry.

How services are delivered was a key factor considered by our panel in the one-month intensive judging process, following four months of research into private banks by our information-gathering team. The judges compared the answers given by the banks to a series of detailed questions about key performance indicators, portfolio management, asset allocation, due diligence, risk management, growth strategies, customer service, ethical factors, business models, staff retention levels and innovation. Quantitative data was also screened by wealth management consultancy Scorpio Partnership.

Last year, several of the judges had already predicted that the integrated, ‘one-bank’ model was past its sell-by date, and that each division of a bank would have to be able to stand on its own two feet. Since the financial crisis of 2008, regulatory pressure for a split between investment banking and other units, so risky trades do not contaminate retail and private banking brands, as happened before at UBS, is also bearing heavily on existing delivery models.

Yet, despite these recent storms, UBS has returned to the top table after reversing significant private client outflows and won the accolade of Best Private Bank in Europe. And significantly, its Asian CEO Kathryn Shih has been given the new and special award of Best Leader in Private Banking. This was one of the most hotly contested awards.

Julius Baer, which won the award for Best Private Bank in Switzerland, is still the excellent example of the ‘pure play’ private bank, difficult to argue with as customers appear to get truly independent advice, rather than being force-fed products from investment bankers in the same group. The judges were keen to reflect the feeling in the market that these integrated structures do not always best represent clients’ interests. That is why we have seen a lot of smaller, boutique banks, and indeed emerging private banking units of larger banks, which are stealing the show from some larger competitors.

Banks such as Berenberg in Germany, Schroders in the UK, CIMB in Malaysia and Swiss institutions Falcon, Vontobel, Banque Syz and Bank Sarasin are triumphing in their particular categories despite stiff competition from bigger brand, integrated players. With Sarasin, once again elected Best Bank for Socially Responsible Investing, the strategists at the Basel-based bank still appear well ahead of the competition in this sphere.

Despite changes at management level, HSBC, securing three awards this year, is still impressive in terms of organisation, communication and strategy for growth, although it will soon have to watch its back, bearing in mind the rising ambitions of Standard Chartered, DBS and continued growth of the Swiss banks in Asia.

In order to further outline the importance of the Asia Pacific region within the awards judging process, we selected a new judge, Justin Ong from consultancy PWC, who has significant knowledge and experience of key banks active in that area. This has added further credibility to our methodology.

Citi once again narrowly won the premier accolade of Best Global Private Bank. Their presentation, strategy and understanding of the nuances of wealth management is still setting the standard, underlined by the bank’s leader Jane Fraser, who was subjected to an intensive questioning session from the judges.