Global Private Banking Awards 2015: Winners’ Profiles – National Winners (The Americas)

Best Private Bank in the US

JP Morgan Private Bank

JP Morgan has managed to snatch the much coveted award from Northern Trust, after an unbroken six year spell for the Chicago-based bank.

“In 2014 net new money increased in the US and we continue to see growth across our business,” says Kelly Cesare Coffey, CEO of JP Morgan’s US Private Bank. “This growth is driven in large part from the long-term relationships we have built with our clients.”

Net new money increased globally by $20.4bn (€18bn) bringing total AuM to $428bn at the end of last year, of which around 80 per cent was booked in North America. The US bank also has significantly increased its front office headcount, by 25 per cent in the country and by 75 per cent internationally.

Wealth creation continues to be a key growth driver. “When you look in places like northern California and southern Florida, for example, not only is wealth being created rapidly, demographics are shifting,” says Ms Coffey.

In northern California, wealth growth is driven by expansion of technology companies, resulting in an increase of younger clients. It is a different story in southern Florida, where growth is coming from international businesses increasing their presence, rising real estate prices, baby boomers and retirees.

The bank has continued to invest in staff who understand local dynamics, and have expertise of client sectors, such as technology and healthcare.

By bringing together expertise across investments, banking, credit, philanthropy, trust and estate planning, clients’ needs are looked at from every angle, says Ms Coffey, and clients are given the “most comprehensive advice and solutions”.

“Our core belief is that when you do the right thing for clients, they will continue to entrust you with more of their assets.”

Rejecting criticism about the bank’s standardised product offering globally, with little regional variation, particularly in Asia, Ms Coffey states that while it starts with the bank’s view on global markets, advice is customised to each client’s specific situation and needs. “Being a global private bank, we are getting first-hand insights from our teams and clients around the world,” she says.

Having teams on the ground in Asia, for example, means not only can they help clients in the region, but they can also use what is learned locally to create better solutions for clients in other parts of the world who are looking to invest in Asia, believes Ms Coffey.

Being able to complement personal client interactions with a digital experience that is “both thoughtful and engaging” is one of the key challenges of private banking today, says Ms Coffey. “We are constantly analysing how we can bring our best thinking and advice to clients in a personalised, digital way.”

Progress on that front has been made with JP Morgan Online, both a website and mobile app, which offers clients access to manage their banking, credit and investment accounts as well as extensive market news and the bank’s thought leadership. Recently, the bank added the ability for clients to log in to the mobile app via Touch ID.  ET

Best Private Bank in Brazil

Itaú Private Bank

Stagnant GDP and declining stockmarket has negatively impacted wealth creation in the largest economy in Latin America and is heavily affecting investors’ behaviour. With inflation and interest rates rising, last year clients invested most new money in tax-exempt products offered mainly by public financial institutions.

Economic and political instability is causing strong market volatility, with currency depreciation, and further interest rate and inflation rises expected.

 “The biggest challenge we face is to keep clients’ focus in this volatile market,” explains Flavio Souza, CEO of Itaú Private Bank, which manages more than BRL226bn (€52.6bn) in client assets.

Clients tend to forget the benefits of long-term strategic allocation in this environment, he says. “Our team of advisers stay very close to clients in order to bring discipline to the asset allocation.”

Given the high interest rate in Brazil (14.25 per cent), the bank’s four recommended model portfolios have a very conservative bias towards fixed income, with the most aggressive profile having just 30 per cent exposure to equities. In addition, onshore Brazilian portfolios have been tactically underweight the Brazilian stockmarket and overweight cash, while a significant strategic allocation to international markets has contributed positively to overall performance.

Despite the challenges, Itaú Private Bank kept its market share at 26 per cent, and achieved 59 per cent increase in net profit and a cost-income ratio of 69 per cent last year. The plan is to further invest “to consolidate several important initiatives” the bank has been implementing for several years.

“All of them have the primary goal of getting closer to clients and boosting our efficiency,” says Mr Souza. These include improving investment research and advisory services, enhancing the team’s qualifications and digital experience, while maintaining high standards in risk management and compliance.

The main source of growth for the bank comes from referrals from Itaú Unibanco’s mass affluent and corporate divisions. While in Brazil the growth is organic, in Chile and Colombia the bank expects to have the approval by local authorities to merge Itaú with Corpbanca, a large commercial bank in Chile and Colombia. “Chile and Colombia are our target markets for the next couple of years,” he explains.

Itaú Private Bank has significant operations in Chile, Argentina, Uruguay and Paraguay, and is developing its presence in Peru, Colombia and Mexico.

“Our plan for the next few years is to consolidate our presence in those markets. We will continue to seek out market opportunities to meet the needs of the most prominent families there,” says Mr Souza.  ET

Best Private Bank in Canada

RBC Wealth Management

The initiatives taken by RBC Wealth Management last year aimed at improving adviser productivity and enhancing client service, which are crucial in an increasingly competitive environment.

The Canadian bank developed and launched a new client relationship management system called ClientView, which helps private bankers build their practices, keep all of their client information in one place, prioritise contacts and manage relationships.

Also, the institution, which manages more than $100bn (€88bn) in client assets, is rolling out ‘myGPS’, a web-based, integrated and interactive tool that helps its North American wealth advisers provide goals-based advice. “The myGPS service takes relationship management to a new level, helping advisers to anticipate client needs. It defines, guides and reports on goals, all in one tool,” claims Doug Guzman, recently appointed group head, Wealth Management and Insurance at RBC. “Digital capabilities are increasingly critical to the client experience.” 

The bank also expanded its credit capability across all market segments, from affluent to ultra high net worth clients. Moreover, it has continued to offer new investment opportunities and build wealth solutions catering to solving HNW clients’ retirement, estate, and tax planning needs. This is also achieved through partnerships. The one between RBC Capital Markets’ global equity-linked product team and RBC Dominion Securities has generated a new product line to address the needs of Canadian clients wishing to invest in the US equity market.

In association with the not-for-profit Business Families Foundation, the bank provides family businesses with a “robust suite of support tools” to help with business transition planning.

The partnership, which includes a $1.65m financial commitment from RBC over five years, will help produce an online education programme for business owners and their families.

“Many clients are seeking more, and frankly expecting more, from their adviser and their firm, and we see this trend across different demographics,” says Mr Guzman. “Ageing clients are entering or planning for retirement, while younger generations are accumulating wealth, often as owners of a business, and have complex wealth management needs.”

RBC’s ability to provide comprehensive wealth management advice – on retirement, business succession, philanthropy, estate planning, tax planning and more – is a “distinct competitive advantage,” he claims. ET

Best Private Bank in Mexico

BBVA Bancomer Private Bank

The private banking unit of Mexico’s BBVA Bancomer, part of Spain’s BBVA, viewed 2014 as something of a consolidation year following the recent launch of a number of strategies.

For example, the “Experiencia Unica”, launched in 2013, is a methodology which aims to strengthen the customer experience by standardising the way BBVA’s bankers interact with clients. Although it strives for excellence, focus group feedback reported advisers were behaving in too “robotic” a manner, so the bank has changed protocols in an attempt to allow its bankers to “improvise” more.

The product offering is also evolving. “We used to have very limited options in terms of local investment products, including plain vanilla bonds and some equity,” says Javier Diez, head of affluent and private banking at BBVA Bancomer. “But now we are able to offer our clients the possibility to invest all over the world in a variety of asset classes, for example in private equity and structured products.”

The bank sees great opportunity to grow the use of structured products – only 30 per cent of clients currently have them in their portfolios – as well as in mutual funds.

BBVA places a great deal of importance on servicing clients through their families, believing that by investing in future generations they are planning for the long term. The bank provides a dedicated education consultant to help find schools across the globe for its clients offspring, including those children with special needs, while finance programmes are offered through the New York Institute of Finance where they can learn about the products their families are invested in. There are also opportunities to attend the BBVA campus in Madrid to learn about financial management and leadership.  ES

Best Private Bank in Chile

LarrainVial

LarrainVial’s  focus is on clients with over $1m (€880,000) net worth, and as its team grows, its aim is to limit the number of clients per wealth manager, a concept that has also been taken to its 10 branches outside the capital Santiago, increasing service quality across the country.

The bank offers an open architecture service, supported by platforms such as UBS, Pictet, Pershing and Allfunds, but has been increasing the investment products offered.  Managers recommend portfolios for clients according to analysis by LV Estrategia, and also work closely with other areas of LarrainVial, such as its corporate finance division, which has enabled higher net-worth clients access to special investments, such as controlling stakes in local and foreign companies in industries such as healthcare and energy.

Through Activa, LarrainVial’s private equity subsidiary, access is offered to private equity funds in mining, energy, agriculture forestry, and housing that  invest in Chile, Peru, Colombia and other countries in Latin America. This asset class already accounts for 5-15 per cent of HNW client portfolios.

“We have taken many steps to innovate over the last few years, such as the creation of a special tactical recommendation area, called LarrainVial Estrategia, along with providing an open architecture service as well as diverse investment alternatives, including private equity funds,” says Gonzalo Córdova, head of wealth management.

“These are some examples of our efforts to maintain our leadership in the Chilean wealth management industry,” he adds. “Our objective is that when someone needs advisory to make the best investment decisions, they think of LarrainVial as their top choice.” CJ

Best Private Bank in Colombia

BTG Pactual

Despite macro-economic headwinds, due to expectations of tighter monetary policy in the US and a harder environment for commodities, in 2014 BTG Pactual attracted BRL10bn (€2.2bn) in net new money, contributing to grow its total assets under management by 20 per cent year on year, to BRL81bn.

“The three main drivers for last year’s performance were brand recognition and increased awareness, long standing quality relationships and a differentiated product offering,” states Rogerio Pessoa, wealth management CEO at BTG Pactual, headquartered in Brazil. “In a harsh macro-economic environment clients tend to fly to quality and enhance their holdings with traditional and close business partners.”

A key factor behind the development of the bank’s international investment capabilities was the decision to move the investment team to the New York office and build a multi-disciplinary and multi-cultural team.

Also, the acquisition, recently completed, of Generali’s BSI Bank, one of the largest Swiss banks with around SFr99bn (€90.6bn) in assets, will offer the opportunity to explore cross-border deals between Latam and Europe, he says.

The bank is increasingly perceived as a global player that has reinforced its local presence in the region, due in part to a number of acquisitions carried out in recent years. This is a key competitive advantage in today’s testing macro-economic environment, negatively affecting local economies and creation of new wealth, and exacerbated by regulatory changes in several Latam countries.

In Colombia, BTG Pactual has been significantly investing into the development of its advisory capabilities.

“One of the services being developed is wealth planning and trust services, in a country where traditionally independent lawyers and some trusts with under par specialisation in the investment arena have dominated,” says Mr Pessoa.

The bank is looking to set up a ‘Fiduciaria’ structure, expected to boost both wealth planning and international investment capabilities, while a ‘Corporación Financiera’ will offer a local credit programme.

In Brazil, where high inflation persists amid rising unemployment and stagnant demand, tax-exempt traditional banking products have proved very popular, thanks to the high interest rate and tax benefit. However, clients that have overlooked alternative asset classes missed the “outstanding performance” from a wide range of Brazilian hedge funds, so-called ‘Multimercado’ funds. “Despite the challenging environment, our advisory team has been recommending clients shift part of their risk to such a class since the end of last year, on the perception that such managers would profit even in a worsening scenario,” says Mr Pessoa.

The bank is continuing expanding throughout the region and last year started a Mexican operation and consolidated its Peruvian unit.  ET

Best Private Bank in Bermuda

The Bank of N.T. Butterfield & Son Limited

Bermuda has experienced a “perfect economic storm” in recent years, marked by recession and protracted recovery, population shrinkage and increasing regulation, against a backdrop of international scrutiny of offshore jurisdictions. Butterfield’s private banking business has however grown over this period, a result, says the bank, of its “focus on high-touch services, customised credit and asset management solutions, and trust offerings that leverage the group’s international presence”.  The bank has also worked hard to improve its technology and investment management approach over the last few years.

 “Although the breadth and sophistication of our financial services have grown over time, high-touch private banking services remain at the core of how we do business,” says Nir Sadeh, senior vice president and head of private banking, Bermuda.

“We pride ourselves on getting to know each of our clients – and their families and businesses – very well, and working with the resources available to us across the Butterfield Group to customise lending, cash management, investment, custody and fiduciary services solutions to suit their needs.”

It is the norm, rather than the exception, for private bankers to meet regularly with clients face-to-face at Butterfield’s dedicated private banking facility in the capital city Hamilton to take care of their transactional and financial planning needs. “This is a traditional approach that is highly valued by our clientele,” adds Mr Sadeh. CJ