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

Best Private Bank in the US for Customer Service
BNY Mellon Wealth Management

New York-based BNY Mellon takes the customer satisfaction scores assigned by clients of its private banking division answering their annual survey very seriously indeed. The bank believes the best way to keep private clients happy is through a team-based approach, giving every relationship manager access to a group of experts able to assist each client in meeting goals and objectives. With around 30 clients to each adviser, its ratios are among the best in the business. The roll-out of new technology is seen as a key part of this formula.

“The use of technology is intended to complement the relationship that our clients have with their wealth advisers, not to replace it,” says Don Heberle, CEO of BNY Mellon Wealth Management. “It allows clients to interact with us in the way that is most preferable to them at any given time.”

But it is not just these softer criteria that are key to satisfaction levels, believe the bank’s hierarchy, with investment ideas and returns generated by chief investment officer Leo Grohowski crucial to the offer. Mr Grohowski’s team also delivers asset allocation models, formulates long-term views of asset classes and attempts to assemble portfolios to perform in any type of market. Communicating the reasons for holding particular investments is also seen as vital in this high-touch environment. This dialogue, believes Mr Heberle, provides “confidence in their asset to reach their long-term goals”.

The bank has also made progress in instituting more formalised training for its advisers through the Premier training programme, which kicks in every six to eight weeks in a wealth manager’s career, after their initial ‘on-boarding’ extensive initiation and training programme. YB

Best Private Bank in Europe for Customer Service
CaixaBank

Along with arch-rival BBVA, CaixaBank has been not just one of Spain’s fastest adopters for client-facing technology in private banking, but also one of Europe’s leading players, forced to act by its home-market’s fast consolidating financial services industry.

But while the bank sees technology as essential to providing quality service and support in order to improve efficiency of customer service, there are other factors perceived as being almost equally important. “Technology alone is not enough,” believes Victor Allende, CaixaBank executive director of private and premier banking. “Strong trusted relationships between our customers and our advisers represent a key aspect of our value proposition.”

The bank admits there is always a balancing act to play between client service and profitability, with mutual fund sales always a key objective among private banking players in Spain. 

“Each and every innovation is designed to deliver on three objectives,” says Mr Allende. “We must support the business model, enhance customer experience and of course make our private banking model more efficient by adapting to change.”

The country’s fast-paced consolidation, he says, has been positive through creating larger and stronger institutions capable of driving innovation and enhancing customer service. The mergers have helped expand numbers of specialised branches and consultants offering private banking services.

While CaixaBank’s private banking business originated with the acquisition of Morgan Stanley’s Spanish wealth management franchise – where Mr Allende also worked – and was further bolstered in 2015 with the acquisition of Barclays’ Spanish business, the challenge now is for the bank to maintain the momentum of innovation after having been a first mover for so long. 

Mr Allende vows to be able to drive innovation to sustain the leading position, but an onerous, shifting regulatory and business environment could make such promises tougher to keep in future. 

Uncertainty of where the Barcelona-based bank’s headquarters will end up during a time of turmoil in Spain, and calls from many for Catalonian independence, could throw a further spanner into the works. YB

Best Private Bank in Asia for Customer Service
Kasikornbank PCL

For Kasikornbank, Thailand’s biggest wealth manager, the happiness of high net worth individuals is the major reason behind its every action. “Kasikornbank Private Banking has always been the first market mover in Thailand and has never stopped improving our service if it could create happiness for our clients,” says the bank.

This does not, for the most part, consist of offering radically different products and services, but it is good, when offering these, to remember the end goal of happiness in mind. 

One example is its initiation of a family wealth planning service. This assists clients in the financial management of their family as a whole and in their succession planning – the latter being a particular source of strife among wealthy families around the world. Kasikornbank Private Banking was the first wealth manager in Thailand to offer this service.

Another example, says the bank, is its cooperation with Switzerland’s Lombard Odier to make its mutual funds, K-SGM and K-GREAT, more “risk-resistant”.

Offering family planning and reducing risk could, as the bank puts it, “creates financial worry-free lives for clients and allows them to pursue their own happiness”.

In line with a 2014 agreement, Lombard Odier manages global investment funds on behalf of Kasikornbank’s private clients in return for a management fee. Moreover, Kasikornbank refers high net worth private clients to Lombard Odier, where appropriate, while the Swiss firm provides advisory training for the Thai bank’s relationship managers and financial advisers.

The wealth manager says: “We regard giving worry-free time back to our clients as our highest achievement. We believe that clients could feel this aspiration.” DT

Best Private Bank in Australasia for Customer Service
Westpac Private Wealth

Every private bank claims to put the client at the heart of what they do, but what really matters is their approach in practice. 

“We are different from our competitors in how we think and act,” states Katie Christoffersen, head of private wealth management at Westpac New Zealand. The private wealth division, managing around $14bn in client assets, is part of the international Westpac Group, with more than $670bn in global assets.  

“Across the Westpac Group, we like to think of ourselves as a 200-year-old start up, creating agility into our organisation, always being ready to change and adapting to customer feedback and acting quickly on that.”

On the ground, it is important to empower teams who are closest to the customer to make on the spot decisions, she says.

“We are hungry for feedback, and we have daily catch ups with the team that are focused on taking customer feedback, industry trends, sharing, discussing and debating these, so we can adjust quickly.” 

With an average client tenure of more than 22 years, the bank’s external engagement surveys, ‘voice of customer’, show consistently high levels of client engagement. 

“Digital is a way of creating great customer experiences,” she adds. Digital innovation is especially powerful in automating or streamlining tasks, freeing up staff to bring added value to clients.

“The best piece of technology is one that really helps people in their day-to-day lives, solving real customer pain points.”

One example of the bank’s pledge to making its customers lives easier is demonstrated though its new CashNav solution, developed in collaboration with a New-York based fintech company, Moven. 

CashNav helps create “good financial habits” by making clients’ behaviour patterns visible. Clients receive real-time notifications when money leaves their account, and graphs show spending behaviour comparisons against several categories that are divided into needs and wants, and highlights spikes in spending behaviour.

When it comes to portfolio management, the “most rewarding initiatives for clients” have been the broadening of the exposures available within the alternatives sector, and the restructuring of several “related-party funds” to more efficient structures. 

In a drive towards greater transparency and control over investment managers, the bank moved to sub-advisory mandates, across alternatives, fixed income and equities, employing between three to five underlying managers in each asset class. This delegated approach to investments generated nimbleness, as well as cost and process efficiencies, states Ms Christoffersen. ET

Best Private Bank in Nigeria;
Best Private Bank in Ghana;
Best Private Bank in Kenya;
Best Private Bank in Africa for Customer Service
Standard Bank Wealth and Investment

Standard Bank’s value proposition is based on defining clients’ Wealth Quotient, which involves assessing each aspect of their “total wealth needs” to be able to offer personalised services throughout various life stages. 

“This approach helps position our solutions and offerings in a way that is astute, pragmatic and empowering, rather than in a way that is standardised, irrelevant and impersonal,” states Chris Browne, global head, Wealth and Investment, at the South-African bank.

But managing money is far from becoming commoditised. “It is not an easy task matching assets to liabilities to ensure financial goals are met and then being flexible enough to update and reassess regularly, as circumstances change,” says Mr Browne.

One of the private bank’s core pillars is to provide a “universal financial proposition” to clients, working closely with other units, while technology innovation, such as the foreign exchange app introduced last year, aims to give clients “more direct power over and access to their financial affairs”.

Standard Bank Wealth and Investment – which has a presence throughout South Africa, as well as in Kenya, Nigeria, Ghana, Mauritius, Jersey and London – offers local and international cross border lending, corporate and business banking and business assurance, as well as foreign exchange trading and investment opportunities in Africa and abroad, and also benefits from Standard Bank Group’s operations in 21 countries. 

The bank’s focus on intergeneration wealth transfer led to the creation of Leadership Academies, aimed at providing financial education to customers’ children. Last year, the Women’s Wealth Academy launched in London, having held several academies in Africa. The aim is to educate women on “investing, raising a financially fit family, and philanthropy”.

The bank, which manages around ZAR160bn ($11.8bn) in private client assets globally, runs “exclusive” events throughout Africa, giving private bankers the possibility to interact with clients, the goal being to “support and care for their lifestyle aspirations and dreams”.

The institution pays much attention to growing wealth managers from within, through training, which helps face the challenge of finding good quality private bankers, particularly in Kenya. In this country, the political crisis has led to “subdued business activities and flows” and the bank has started offering insurance solutions and structured lending solutions. In Ghana, the bank has introduced new services, including offshore mortgages in London, and launched new apps for financial management and mobile payment. In both countries, one of the key issues remains the dynamic regulatory landscape. 

In Nigeria, where high local currency interest rates have made borrowing solutions expensive, the bank has shifted its focus from leverage to goals-based saving and investing, while ensuring to give clients appropriate advice, given the recent change of foreign exchange rules. ET

Best Private Bank in Lebanon;
Best Private Bank in the Middle East for Customer Service
Audi Private Bank

Audi Private Bank is the largest wealth manager in the relatively fragmented Lebanese market, which is characterised by stand-alone players. International banks have a relatively small market share, with some deciding in recent years that the Lebanese market is too small to be covered locally, according to an assessment by Audi Private Bank of the market that echoes the views of other observers. 

The bank credits its strong customer service partly to its proximity to the client. The relationship manager meets their client on a regular basis, but in addition, the investment adviser who prepares the portfolio review is most often in Lebanon too.

Another important part of its customer service is to inject a note of caution into the approach of its clients. “We tend to be cautious in our asset allocation and while advising clients on managing their money,” says a spokesman at the bank. “We prefer to have a longer-term vision and sometimes even to temper our client’s willingness to take risks in view of upcoming market turbulence. We also practise diversification and limit the use of leverage when the portfolio doesn’t have the appropriate hedges or ability to take risks.”

The bank makes much of its close monitoring of relationship managers through a new business intelligence tool. However, it is keen to emphasise that rather than using this as an engine for hiring and firing, “we are little inclined to increase staff volatility as one of our key strengths is the strong and durable relationship our bankers build with their clients”. 

Instead, “we prefer to look for solutions to boost relationship manager performance with the use of training and coaching, and of increased assistance from the investment office.” DT

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

Despite economic turbulence and political instability in Latin America, Itaú Private Bank, which manages more than BRL300bn ($94bn) in client assets, enjoyed BRL11bn in net new money, while net income and revenue increased 71 per cent and 21 per cent respectively. These results, combined with consistent cost management, enabled the bank to reduce its cost-income ratio by 12 basis points.

In Brazil, what paid off was the bank’s ability to “understand client needs, propose a complete offering aligned to those needs, and being transparent, especially in regard to pricing and risks,” explains Luiz Severiano, head of Itaú Private Bank Brazil. “This strengthens our relationship with clients, which is built on trust.” 

The bank’s efforts in developing a sophisticated product offering and an international platform over the past few years – with further enhancements made in 2016 in Switzerland, the US and the Caribbean – leave Itaú well positioned to work in the new scenario of lower interest rates, which are likely to be a challenge, as investors are used to double-digit annual returns.

“We expect clients to be more willing to invest in higher risk products, with an international exposure, in order to maintain their returns,” predicts Mr Severiano. “This is a good opportunity for us to further increase our market share in Brazil and enhance our positioning offshore.” 

The private bank has a market share of 28 per cent in Brazilian wealth management market. Among ultra high net worth clients it is even higher, 30 per cent, and is expected to increase following the implementation of Brazil’s tax amnesty programme.

Over the past year, the bank raised the asset management threshold for Itaú Family Office to BRL400m and tailored its marketing approach to focus on potential clients with assets exceeding BRL10m. “Both changes were made to enable us to provide more tailored, specific services,” he says. 

During 2016, improvements were made to the technology platform, affecting both clients and advisers. “Clients have been reacting surprisingly well and want to try new features, such as video conferencing, investments and authorisations through digital channels,” reports Mr Severiano.

Going forward, the bank’s strategy is to reinforce its operations in markets where Itaú already has a major retail presence, such as Brazil, Argentina, Chile and Colombia. ET

Best Initiative of the year in Relationship Management Technology in Asia
Standard Chartered Private Bank

Standard Chartered’s innovative technology solution, introduced in January this year, was developed to create a ‘one-stop shop’ for the bank’s investment ideas, conviction product solutions and advisory models, which its relationship managers across Asia, Africa and the Middle East can easily access. 

“We created ‘Advice’ to equip our
frontline teams with a one-stop access to the bank’s advisory views and enable them to recommend asset class ideas and related solutions quickly,” says Didier von Daeniken, global head of private banking and wealth management at the bank. “With the implementation of Advice, relationship managers can now offer our clients immediate access to actionable insights, and respond more nimbly to market events – which is especially critical in today’s increasingly volatile environment,” he adds.

Before Advice, it could sometimes take up to three hours to thoroughly prepare each client’s investment portfolio, involving referencing several different sources. 

The solution is powered by the Thomson Reuters Eikon platform – a tool advisers already had access to on their work stations and were comfortable using. And it reduces the amount of time needed for an adviser to look for information and prepare client proposal updates by up to 50 per cent. 

Standard Chartered has also initiated a ‘proof of concept’ (PoC) with Bambu, a robo-advisory company, which participated in the bank’s Supercharger FinTech Accelerator. This PoC uses a digital advisory tool that complements Advice, as it uses several factors, such as the stock’s value and the company’s earnings and credit quality, to produce a ranking and suitability of individual equities for clients.

The bank is also making progress in digitising its price discovery and order management process, aimed at improving its trading capabilities. The bank’s equity derivatives order management platform, EQConnect, which was rolled out this year, allows bankers to perform price discovery and order placement directly with issuers and counterparties for popular products. 

“This market-leading capability allows our frontline colleagues to price structures almost in real time, which means that our clients also enjoy an enhanced and more efficient investment experience,” states Mr Daeniken. ET

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

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 in the UK;
Best Private Bank in Europe for Succession Planning
Coutts

Coutts, which manages £18bn ($23.7bn) for more than 60,000 clients, is targeting clearly-defined groups in both its marketing push and when structuring its servicing proposition for different niches. This means the UK bank is looking increasingly at how it works with professional practitioners, company executives, international business people, landowners, sports stars and entertainers. The idea is to be able to service clients with more tailored advice across their full family balance sheets. 

Bank bosses believe a key weapon is expertise in succession planning, which helps empower clients to develop a vision and strategy for their family’s future, also enabling the preparation of future generations to run businesses and philanthropic interests.

Indeed, Coutts insiders like to talk about two sides of the wealth succession coin – one focusing on technical solutions such as wills and trusts, the other on both strategic and emotional questions such as developing a family strategy and defining the purpose of their wealth. 

“Aside from ensuring they have enough to support their lifestyle for the rest of their life, many clients look to use ‘surplus’ wealth to support the next generation, invest in business start-ups or support the charitable causes or communities that they care about,” says Lenka Setkova, executive director of the Coutts Institute.

The bank also warns that sound structures and planning must be in place in order to avoid mistakes or “unintended consequences” of passing on wealth to the next generation, family, friends or charities. YB

Best Private Bank in the US for Philanthropy Services
Brown Brothers Harriman

When it comes to offering philanthropic services, one of the key challenges is training relationship managers to skilfully introduce the topic when speaking to clients. 

BBH has addressed this issue by adding a wealth planner to each of its client teams, each of whom is experienced at practicing trusts and estates and knowledgeable about philanthropic issues. “So we are able to help our clients think through these types of questions and concerns, and others related to their charitable goals,” explains Kathryn George, partner at the oldest and largest US privately-held bank. “This is a key differentiator for our firm.” 

The three facets of philanthropy on which the bank spends the most time with clients are assessing purpose and impact, tax-efficient planning and philanthropic vehicles, whether for example, it makes more sense to create a family foundation or a donor-advised fund, or both.

Values, not news headlines, are what mostly concerns the wealthy, says Ms George. “Intergenerational issues are at the forefront of our clients’ minds. They are focused on how their wealth will support their children in achieving their goals and on instilling their own values around wealth in the next generation,” she explains. Clients want to make sure their wealth helps rising generations achieve their long-term objectives, as opposed to being a hindrance. 

To meet these needs, the bank is adding tools and resources to its long-standing next generation education services. It is also rolling out a new values-based planning framework, aimed at helping clients facilitate family conversations around money and values.

The recently launched Centre for Women & Wealth seeks to help women deal with transitions in their families, confront questions about how to help the next generation succeed and embrace their financial independence.

The bank, also highly commended in the Best Private Bank in the US category, embraces a value-driven investment approach with a quality bias, where partners have their ‘skin in the game’, as they invest alongside clients. “In a period like today, in which valuations are stretched, we tell our clients not to worry about missing opportunities to invest in overvalued companies, whose prices may continue to rise,” adds Ms George. 

Thinking long-term and seeking to invest with a margin of safety continues to be the bank’s stance. “We believe that preserving wealth is the best way to grow it over time.”  ET

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