A year after the implosion of Lehman Brothers, private banking leaders will gather in Geneva, Boston, Tokyo and Singapore on October 5

– 7 to share their views about the future of wealth management across the globe.The industry is at a crossroad. After the Madoff scandal and the collapse of bank secrecy in Switzerland and other major offshore banking centres many players have to rethink their banking model and work hard to regain their clients’ trust.

Swiss bank giant UBS, once the world’s biggest wealth manager, was badly hit by a U.S. tax fraud investigation and is challenged by new industry heavyweights.

Will UBS regain its leadership or will emerging Asian and Australian banks continue to chip away at UBS’ dominant position in the Asia-Pacific? Is offshore private banking doomed? Will private banking remain a profitable business? Where are clients putting their money as the world emerges from the subprime crisis? How different are the new rich in Asia and Latin America from Europe’s old money?

These are some of the questions Reuters reporters will put to top private bankers as the industry struggles with what may be its biggest challenges ever. Reuters Global Wealth Management Summit will generate exclusive interviews and investable insights from our team of expert reporters, as well as online videos and blog postings, which will be immediately available only to Thomson Reuters clients during the Summit.

Even the rich aren’t as well-off as they were a year ago but that’s not stopping the wealth management industry from focusing on what the future of private banking will look like after the economic downturn has passed. Click below to view my latest story:

Private bankers are guiding their rich clients into safer investments as financial market turmoil spreads, but when it comes to their own money they often take a different tack.
“I don’t have a very well diversified portfolio,” admits Timothy Vaill, chairman and chief executive officer of Boston Private Financial Holdings , which owns 15 independently operated financial services firms.
“The majority of my investments are in my own company,” he told this week’s Reuters Wealth Management Summit.
“And I invested additionally this quarter in my own company again because I really believe what we are doing is the right thing to do and it is a very strong company. And I’m there all day, every day, watching it like a hawk.”
David Lamere, chief executive of The Bank of New York Mellon’s wealth management unit, said his money is managed by his own company.
“I’m a big shareholder in BNY Mellon, and the rest of my assets is managed by our organization,” Lamere told the Reuters Summit. But his investments were “very diversified”, he added.
How much do they own?
According to Thomson Reuters data, Vaill owned 201,794 shares of Boston Private as of mid-August valued at about $1.8 million. As of Thursday afternoon, his stake would have retained its value at $1.8 million.
Vaill also said he does not borrow against his stock and does not invest in hedge funds.
Lamere owned 255,820 shares of Bank of New York Mellon as of May 9, valued then at about $11 million. As of Thursday afternoon, that was notionally valued at about $7.5 million.
Lamere said he was at a lunch on Sept. 18 when Bank of New York Mellon stock briefly fell 35 percent along with a slump in shares of other trust banks and asset managers.
“It all happened within about an hour in the middle of the day and I was in a lunch. I got called six times,” Lamere added.

Women have long bumped up against glass ceilings as they try to advance to upper level executive jobs.
According to research from the Harrison Group, a market research and strategy firm in Waterbury, Connecticut, when it comes to housework wealth men are dealing with barriers too, although it’s unclear where those barriers come from.
“Women handle the household’s employment, treasury and other functions” and are making real money for the family, said Jim Taylor, the group’s vice chairman who regularly researches how rich people behave.
Men work long hours at their jobs and at home they are now allowed only to care for lawns, shrubbery and maybe the swimming pool. That gives rise to the new term “the grass ceiling,” Taylor said at the Reuters Wealth Summit.

–Svea Herbst

How worried are the richest Americans by the current economic turmoil?
It’s fair to say, “very.”

Forty-six percent of the wealthiest U.S. families believe they can lose everything, said Jim Taylor, vice chairman of the Harrison Group, a market research and strategy firm in Waterbury, Conn.

“That’s up from about 35 percent in June, up from a little under 20 percent in April, and up from zero percent a couple of years ago,” Taylor told the Reuters Wealth Management Summit on Tuesday, citing the findings of his latest quarterly survey of affluent individuals taken Sept. 19-23.

Respondents were asked if they agreed with the statement that “I worry that at some point I could run out of money.”

“We have seen an astonishing increase in the perception of risk. And the risk is not generally to the business, the risk is to their own personal wealth,” he said.
Other highlights from the survey by the Harrison Group and American Express Publishing include:

– Sixty percent of wealthy families believe the U.S. economy will slip into a recession that will last more than a year, starting in September. Only 4 percent expect it will be over in six months.

– In 2005, 93 percent of America’s affluent and wealthy people were confident about their future. Last December, that number was down to 70 percent. In the September quarter, it slid to 55 percent.

- By Jason Szep in Boston

Spare a thought for the mega-rich.

While the man or woman on the street cuts back on non-essential spending as the value of their home falls and they worry more about whether or not they will keep their job, so too multi-millionaires are feeling the pinch.

Javier Arus Castillo, general manager of Santander Private Banking International, explains.

“With the markets down, if you have lost $100 million and have $300 million left then that makes you think. Your life is not going to change but you start to feel a little concerned.

“The top people who have their own plane or have NetJet shares of $8 million and one-third of a jet are now saying ‘does it make sense that to fly from Latin America to Europe costs me $100,000? Maybe I should buy a first class ticket.’”

Puts our own worries in perspective.

As global markets rallied over the past five years, talent in the private banking industry had become a heavily fought over commodity. Rain makers, top bankers and entire teams were poached constantly by rival organizations who offered top dollar for the move.

However the unprecedented financial crisis has dramatically changed the talent landscape, with rookie bankers facing a harder time to move up the ladder, said a Merrill Lynch executive.

“Musical chairs are not taking place. People with limited experience, with fewer assets are not today being seen to move in the manner that they did in 2006, 2007,” said Rahul Malhotra, head of Asia-Pacific Advisory for Merrill Lynch.

Malhotra also said that the pace of growth in the wealth management industry outstripped the pace of growth in its talent pool.

What do you think?

There’s no shortage of commentators lining up to opine on how much the troubled hedge fund industry is likely to shrink as the credit crisis unfolds.

So when someone talks about the industry being in “meltdown”, it is good to see they are backing up their dramatic views with some dramatic actions.

Enrique Marazuela, chief investment officer of Spain’s BBVA Patrimonios, says his clients have slashed exposure by more than two-thirds over the past year because the returns and risks are simply not what they were expecting.

On Monday Union Bancaire Privee (UBP) said it has taken down exposure to 20-25 percent from 30 percent at the end of last year.

Again, it says returns - running almost into double digits losses so far this year for the industry - have been disappointing.

Wealthy clients were the foundation on which much of the $2.6 trillion hedge fund industry’s early growth has been based.

UBP says the industry could shrink by one-third over the coming quarters as investors withdraw assets.

But if other wealthy clients are doing what BBVA is, then the shrinkage could be much more dramatic.

Regulation is a word bankers love to hate.

But according to Sebastian Dovey, managing partner of wealth management consultancy Scorpio Partnership, they need to spend less time moaning about it and more time working with regulators to communicate the benefits of the industry.

“It’s not good enough to sit back and say this is going to cost us,” he says. “We’re here now, we’re in this mess. We’ve got to try and manage our way out of it.

“Bankers are always complaining about regulation and saying that’s the reasons for costs … It’s the wrong statement to make to say regulation is not necessarily going to help our business.”

While protecting an industry dedicated to making money for the most wealthy in society may be a tough political sell at the moment, Dovey suggests the industry talks to regulators about what the industry really does, how big it is and how important it is for incomes and jobs.

This sounds like sensible advice. Because when the current crisis is finally over, it looks less like a question of if and more like a question of how much regulation will come.

 Lim Boh Soon, chief executive officer of Kuwait Finance House in Singapore said at the Reuters Wealth Management Summit that he sees the period of downturn in the global economy lasting 18-24 months.

However, he thinks the market sell-off over the past two weeks has thrown up good value and said the Middle Eastern bank will look to raise up to $600 million for three Asia-focused funds next year.  Kuwait Finance House is the Gulf third-largest lender.

What do you make of Lim’s assessment on the global economy? Do you think it is a good idea to start buying into the market?

Click here and hear to listen on Lim’s assessment of the global economy.