Summit Notebook
Exclusive outtakes from industry leaders
Time private bankers got professional
It’s hard to imagine that a banker who represents multimillionaires would be anything but professional – but a top executive at a leading global bank thinks that’s precisely the wealth management industry’s problem.
“There is so much mediocrity in the industry we have to raise the bar here,” said Gerard Aquilina, vice chairman of Barclays Wealth, at the Reuters Global Wealth Management Summit in Geneva.
To Aquilina’s way of thinking, private bankers need the same “institutional rigor” as investment bankers in the way they operate. To this end the bank is looking to pursue only top-quality hires.
“Our strategy is not to be the hoover that comes and hires willy-nilly, we want to be much more selective,” said Aquilina — perhaps an ironic view given Barclays acquired thousands of investment bankers from the ashes of the fallen Lehman Brothers last year.
But he and his colleagues are so sure of their position that he said they are working on developing MBA-level courses with some unnamed top universities on private banking, especially as they see fewer and fewer interns turning up their noses at the prospect of a three-month rotation in the private banking shop.
I think its a good idea, people needs to be heard and sometimes look forward for professional advices on financial matter.
The main question is:
How much I will believe to my Private Banking Specialist?
- As much as I believe in my bank, and in these days this is not going up for sure. In these time of crisis, banks are moving from TRUST to DOUBTs Institutions.
This might help for better relationships management but the problems arise often from the executives of the bank, not from the specialist in the bottom level.
Tax evaders on the run
By Neil Chatterjee The U.S. has promised it will hunt down tax evaders. And it seems tax evaders are on the run. DBS bank, based in the growing offshore financial centre of Singapore, told Reuters it had been approached by U.S. citizens asking for its private banking services. But when told they would have to sign U.S. tax declaration forms, the potential clients disappeared. Swiss banks also approached DBS on the hope they could offload troublesome U.S. clients to a location that so far has not been reached by the strong arms of Washington or Brussels. DBS said no thanks. In fact many private banks and boutique advisors now seem to be avoiding U.S. clients. Will this spread to other nationalities, as governments invest in tax spies and tax havens invest in white paint? Is this the end of offshore private private banking?
Offshore investment or not. You have to be allowed to invest your taxed money wherever you want. Evading payment of taxes where you reside will always be an illegal act.
Private bankers chanting new mantra
Private bankers still getting their ears bashed from clients enraged about massive portfolio losses now are chanting a new mantra.
Murmur along with me, those seeking inner peace and appeased clients: the word is “holistic”.
Three years ago, before Lehman and Madoff shattered clients’ confidence, the soothing formula might have been “absolute returns” or “structured products”. No longer.
Bankers shooting French cuffs in Super 180 suits and obsessed with spread sheets now are seizing on a word redolent of green tea, acupuncture, crystals and the New Age.
“Holistic” bubbled up at least four times at the Reuters Global Wealth Management Summit as bankers and consultants in Singapore and Geneva outlined how to keep clients after the market meltdown.
But what does a word meaning that whole entities have an existence other than the sum of their parts have to do with rich people and the gnomes that mind their money?
“Holistic” in bank-speak translates as handholding, face time and hustling to assure wary clients bankers are on the job. Mass mailings are out, daily phone calls are in.
Private Bank finds synergy in public bar
It is a little known fact that private bank Wegelin, Switzerland’s oldest bank is also active in the bars and restaurants business.
In its ‘Nonolet’ bars – a play on the Latin saying pecunia non olet (money doesn’t stink) – in St. Gallen and in Geneva, hedge fund managers and other financial professionals rub shoulders with other locals in the early evening over sparkling wine or champagne and snacks.
It may sound an odd sort of diversification, but Wegelin says there were forced to try a new line of business to ensure an upmarket crowd mingled on the ground floor of the Wegelin building.
“You cannot have a strange business there like a kebab shop,” said Wegelin partner Christian Raubach.
Wegelin was forced to launch a hostile takeover on a local bar which had attracted a lot of unruly drinkers near its St. Gallen branch office.
“We bought the bar, we fired the owners, and we put a nice Café in so we get a different crowd. The crowd that sits during the day drinking coffee and not vomiting drinking beer at night,” Raubach said.
The operation proved to be a success but is unlikely to develop in to a brand new business area.
Geneva is for wealth management
Even for an American who’s not wealthy, Geneva has a reputation as a global centre for wealth management – the place the world’s rich come to stash their money and (they hope) make it grow.
But you don’t necessarily expect it to be so aggressive — after all, the rich tend to be demure when it comes to their banking.
Imagine one reporter’s surprise, then, on arriving in the airport in Geneva and seeing bank ads everywhere. Think of the casino adds in Las Vegas’s McCarron Airport or the technology ads in San Jose’s Mineta Airport: it’s the exactly the same in Geneva, only with wealth managers.
Look left – there’s UBS. Look right – there’s Julius Baer. Look up in the baggage queue – there’s a Swiss bank that emphasises a focus on the Arab world. A complete unscientific guesstimate suggests the display ads in the terminal run about 75 percent wealth management and 25 percent fine watches. (No surprise that every other storefront in the Ville Centre area of Geneva has watches on offer.)
There is one plus to all of the bank ads in the airport for the less wealthy though. Tell your cab driver to head toward their addresses and you’re likely to find the city’s best cafes.
from Funds Hub:
Written in the stars
It is not often that Reuters journalists carefully take down the words of an investor who regularly consults an astrologer, but then not every investor recorded a 32 percent increase in his portfolio in 2008.
As head of Eclectica Asset Management, Hugh Hendry cuts a figure not often seen in modern-day financial investing: a besuited Malcolm McLaren-esque counter-culture figure rather than a pointy-headed quant analyst.
Hendry says he draws direct inspiration from hedge fund managers from yesteryear, making money on the far fringes of the market, rather than today’s hedge fund professionals wedded to the big bastions of the financial industry.
“I have always identified with the spirit of the hedge funds of the 1970s. They were always these fascinating people who you wanted to hang out with, but always regretted not giving them more money,” Hendry said.
“But you couldn’t quite give them a lot of your money because they were too interesting, too edgy -- that’s why you call it alternative,” he said.
A charismatic figure, his astrologer thinks he will be the prophet of the next century, but then, says Hendry, that is because his astrologer is mad.
Simply recruiting from colleges does not even remotely assure any business of the quality of the canditates. Grades certainly mean nothing when it comes to personal character, work ethic, morals, etc. Most people have college degrees these days. It’s not like it was 30-40 years ago, where the degreed were a cut above. It’s now just a glorified high school diploma, but we all need one for some reason.