PRIVATE BANKER - Verdict...BTG to sell BSI, three months after purchase approval Brazilian investment bank, BTG Pactual, is looking to sell off Swiss private bank, BSI, only three

'ONE RBC'

December 2015/January 2016 Issue 327-328 www.privatebankerinternational.com

•Rise of offshore life assurance bonds•Comments and predictions: Private banks & IT vendors

•APAC overview: industry forecasts•Preview: PBI Middle East Conference and Awards

Taking a leaf out of Royal Bank of Canada's wealth

management success story

PRIVATE BANKER

WealthInsight provides detailed data and insightful analysis on the world’s High Net Worth Individuals (HNWIs) and wealth sector. With decades of experience providing business information, WealthInsight helps organisations make informed decisions and win new business.

AAt WealthInsight’s core is our proprietary HNWI Database of the world’s wealthiest individuals. Around this database we have built a number of valuable research based products and services that make WealthInsight much more than just a rich contact list.

We work with and provide solutions for: Wealth Managers Private Banks Family Offices Technology Providers Professional Services – Consultants, Accountants, Lawyers, Real Estate Professionals Fund Managers, Asset Managers, Venture Capitalists Non-profits and Educational Institutions

For more information contact us at [email protected]: +44 (0)207 406 6553

Connect to Wealth Through Intelligence

About WealthInsight

IAB 545v2.indd 25 20/02/2015 16:55:07

December 2015/January 2016 y 1www.privatebankerinternational.com

AnAl

ysis

Editor’s LEttErPrivate Banker International

‘Tis the season to reflectContEntsnEWs

2, 16: news DIgest

3: news BrIefs

20: tech rounD-uP

21: regulatIon rounD-uP

23: PeoPle moves

AnALysis

6: wealthInsIght's 2016 PreDIctIons

22: lIquIDIty ProfIles

FEAturE

4-5: IntervIew: rBc wealth management - cover story

douglas Blakey meets wayne Bossert, vice chair of rBc wealth management, to discuss the bank’s strategic imperatives as well as leveraging rBc’s strengths and capabilities to bring the best of rBc to its clients

7: offshore lIfe assurance BonDs

offshore life assurance bonds present hnwIs with an attractive option of enabling tax deferrals resulting in compounded portfolio gains. John schaffer finds out more

18: geneva rounDtaBle - overvIew

the executive roundtable in geneva to reveal findings from the white paper Tryst with Transparency: How private banks in Switzerland and Singapore are ensuring best-of-breed service in a demanding regulatory ecosystem led to valuable insights

24: PBI mIDDle east event: PrevIew

what is in store for Private Banking: middle east conference and awards 2016?

CommEnt

8-11: comments anD forecasts: PrIvate Banks

leaders from six global private banks share their views on how the wealth management market will develop in 2016

12-13: technology forecasts:

Industry experts give their predictions about how technology will shape wealth management in the year to come

14-15: comments anD forecasts: aPac

experts comment on key themes and trends that will dominate aPac's wealth market

Country survEy

17: mexIco

a forecasted increase in mexico's hnwI numbers presents opportunities for the private banking sector to flourish further

Follow Private Banker International

Search for @BankerNewsSearch for ‘Private Banker International – Timetric Financial Services’

It is the question we always ask at the end of the year – how did the private bank-ing sector perform in the last 12 months? Looking back, 2015 was a year of nec-

essary rectifications, reviews and revisions. It was a year of accepting both mistakes and changes, and establishing ‘new best-practices’.

Some key themes from 2014 carried on in 2015, as expected. Industry consolidation continued – smaller players struggling with costs, across the globe, got scooped up by big-ger banks – some in the quest of entering dif-ficult markets and the others with the aim of expanding their client base.

Some big M&A deals took place as well – a notable one being UK-headquartered Coutts’ sale of its international wealth management business to Union Bancaire Privee (UBP), which was finalised in March. The deal boost-ed UBP’s assets under management (AuM) and client-base significantly, particularly in Asia, making it a player to watch on the global wealth management map.

Several lenders – big and small – also con-tinued to review their core geographies and opted for slimmed down footprints, operating in regions where they can truly add value and pulling out of those that had become too com-plex and/or costly.

In the last few years, regulation has been dis-rupting the way private banks have tradition-ally operated, and in 2015 banks seemed to be making their peace with the heightened trans-parency environment that regulations such as the Foreign Account Tax Compliance Act (FATCA) and the upcoming Common Report-ing Standards (CRS) demand. Most private banks renewed their operational strategies this year to work in tandem with new regula-tory obligations, balance cost efficiencies, and remain client focused.

Like regulation, technology continued to be a key area of focus and investment for pri-vate banks. In 2014, the conversations were

all about robo-advisors and their fast rise. In 2015, robo-advisors were still top-of-mind for private bankers, but it also became clear that, despite the popularity of online-only investment managers, the role of the relation-ship manager (RM) is still crucial to wealthy clients. Equipping RMs with sophisticated IT tools, and opting for the hybrid model – of marrying automated advisory capabilities with traditional wealth management – is the way forward for firms.

Technology also continued to make its importance felt in the back and middle office sections, more than ever, highlighting the need for agile, flexible, and scalable IT systems at private banks for progress.

Data, and the importance of it, became even greater in 2015. Going forward, data govern-ance will be a crucial aspect that private banks need to successfully tackle. A major concern that arose this year was around cyber threats and as private banks prepare to open up their internal systems and databases to more third-party vendors and regulators, these concerns can be expected to intensify.

The private banking sector seems to be going into 2016 optimistically, even though there were challenges along the way. For us at PBI, it was extremely interesting to witness all the happenings this year and report on them.

Our flagship event, PBI Global Wealth Sum-mit, which takes place annually in Singapore, turned 25 this year, which was a most notable milestone. The PBI Global Wealth Awards 2015 also received a record number of nomi-nations, which was humbling. Next year, it will be bigger and even better.

We thank every one of you for your con-tinued support on PBI and look forward to working together in 2016. From team PBI, we wish you a Merry Christmas and a prosperous new year!

meghna [email protected]

2 y December 2015/January 2016 www.privatebankerinternational.com

New

sdigEst Private Banker International

ProduCts & sErviCEs

Scotiabank unveils new wealth management brandCanadian lender Scotiabank has introduced its new Scotia Wealth Management brand as well as an integrated approach to serving clients' wealth management needs.

This approach will enable Scotiabank to collaborate with clients by providing advice across all stages of life to help meet their financial and life goals.

The new brand will offer a full range of client services including financial planning, investment management, private banking, insurance, business transition plan-ning, estate and trust services, and more, for clients.

Scotiabank said that this new brand is an innovative and collabo-rative approach to wealth manage-ment that focuses on a new way of thinking: Enriched Thinking.

The launch of the new brand follows extensive global research, conducted over the past two years through conversations with clients, customers, investors and relation-ship managers in key markets.

According to this research, cli-ents would like to have two-way conversations and work with their advisors in a way that will lead to collaborative decision-making.

As part of the rebrand, Hol-lisWealth and Scotia iTRADE will continue to operate under their own brand identities.

Scotiabank group head of Cana-dian banking James O'Sullivan said: "We are breaking down tradi-tional silos and taking a team-based approach to deliver an integrated wealth management offering to our clients.” <

dEALs

Commonwealth Bank forms strategic alliance with Goldman Sachs

Commonwealth Bank (CBA) has entered into a strategic alliance with Goldman Sachs to allow CommSec and CBA private bank-ing clients to access Goldman Sachs' pipeline of equity offerings.

Under the deal, the bank's cus-

tomers can now access Goldman Sachs' equity offerings, including IPOs. The deal will include ongo-ing servicing of the equity capital markets needs of Commonwealth Bank's corporate customers.

The alliance will see Goldman Sachs offering the bank's custom-ers access to its range of Austral-ian and New Zealand investment research, as well as its global mac-roeconomic and strategic research.

Additionally, CBA is planning to shut down its institutional equities team, which is part of the Group's institutional banking & markets business, on 16 Decem-ber 2015. The closure is expected to affect up to 50 staff.

Commonwealth Bank Group executive for business and pri-vate banking Adam Bennett said:

"This alliance further enhances the products and services we deliver to our customers, providing them with high-quality independent perspectives as they invest in equi-ty markets."In addition, many of our

CommSec advisors, Common-wealth Private bankers and wealth managers and our corporate bankers will have the added ben-efit of accessing research on over 3,100 stocks across five regions globally." <

ProduCts & sErviCEs

Qatar First Bank launches private banking

Qatar First Bank (QFB), a Shariah compliant institution, announced on 6 December that it is to launch a private banking service. The bank is also set to list its shares on the Qatar exchange in the first quarter of 2016.

QFB established in 2009 as an investment bank that concen-trates its focus on Shariah compli-ant banking. The potential listing would be only the second new list-ing in Qatar since 2010.

Speaking at a press conference in Doha, Ziad Makkawi, QFB CEO, said that offering a private banking service was not a move away from its difficulties in pri-vate equity, rather the bank is

"building on it".

Makkawi added, "QFB is evolving its business model from merely focusing on maximising returns for its own portfolio to a more outward client focused insti-tution."

He also said that the banking environment in the Gulf is "chal-lenging" and that investors in the region were behaving cautiously at a time of low oil prices and a liquidity crunch."The investment climate is not

going to be as hot or as bullish as when oil prices were at $100 a barrel. People are looking for a bit more certainty and are staying away from speculative kinds of investments," he said. <

m&A

BTG to sell BSI, three months after purchase approval

Brazilian investment bank, BTG Pactual, is looking to sell off Swiss private bank, BSI, only three months after it received regulatory approval for the purchase.

The troubled bank is looking to raise liquidity after its former CEO, Andre Esteves, resigned fol-lowing his arrest in relation to the ongoing Petrobras scandal.

No details have been released regarding the potential size of the deal, or of any prospective buyers.

BTG completed the purchase of BSI in September for CHF1.5bn ($1.5bn), from Italian insurer Generali. The deal increased BTG's employee base from 3,500 to 5,400, and created a group with $186.5bn of assets under management (AuM).

The bank had hired a number of heavyweight professionals in con-junction with the September deal, such as Reto Kunz as chief risk officer (veteran in risk consulting) and Yves Bonzon as CIO (banking veteran from Pictet). <

strAtEgy

BBVA gets approval to open first branch office in mainland China

Spanish lender BBVA has secured the green light from the China

Banking Regulatory Commission (CBRC) to open a branch office in Shanghai.

The new branch office is the first one to be launched by BBVA in mainland China. Since 2005, the bank has been present in the city through a representative office.

The new office will become oper-ational in February, concentrating on foreign trade, corporate finance as well as treasury products.

The branch will house 16 spe-cialists having extensive experience in the Chinese banking industry, led by May Yao.

In addition to the Shanghai branch, BBVA operates with five branches in Hong Kong, Seoul, Taipei, Singapore and Tokyo. It also has representative offices in Beijing, Mumbai and Sydney. <

m&A

Stifel completes Barclays Wealth Americas acquisition

Stifel Financial has completed the purchase of Barclays' Wealth and Investment Management, Ameri-cas franchise in the US (Barclays Wealth Americas).

Under the agreement, Stifel will be the US private wealth distribu-tion partner for a certain portion of Barclays' equities and will credit new issue securities in the US.

Stifel chairman and CEO Ron-ald Kruszewski said:"Through the combination of

the depth of Barclays' franchise and the breadth of Stifel's prod-uct offerings, we are creating a premier wealth management plat-form. We've already initiated, and are committed to making signifi-cant investments in our platform with the goal of providing our cli-ents with a superior set of products and services."

Barclays CEO of wealth and investment management Aksh-aya Bhargava said: "Barclays is pleased to have completed the transaction which brings our US investment representatives under the Stifel banner. We look forward to our continuing collaboration through our distribution agree-ment." Financial terms of the deal have not been disclosed.<


New

s

BriEFsPrivate Banker International

tEChnoLogy

Objectway: Facilitating the hybrid modelObjectway, an Italian headquartered technology vendor who provides software and services to the EMEA investment management industry, demonstrated its Conectus platform as a way to implement a hybrid model of investing - a mixture of engagement with both technology and advisors.

Speaking on 2 December at Object-way's International Customer Confer-ence in London, Michele Tanzi, cli-ent solutions director at Objectway, spoke about the importance of cli-ents' goal based investments and how they could be implemented through Conectus.

Using the Conectus software on an iPad, Tanzi demonstrated how a goals based approach could be

related to an investment strategy. He demoed a typical goal of a client by entering in a target of buying a property in London. The amount of capital that was available to invest, alongside a timescale was also sub-mitted. The software then returned a potential asset allocation, with asso-ciated risk rating, based upon this goal.

After the client input stage, the information is then sent to the advisor where a more detailed solution can be proposed - thus illustrating the process of the hybrid model.

Tanzi said that the importance of goal based investments is that it "plac-es clients at the centre" where they are far more involved in the decision making process. He also suggested

that establishing a client's goals was also beneficial to advisors, as they would be better equipped to offer more bespoke advice.

Objectway's technology propositions are clearly aimed at implementing a hybrid model as opposed to auto-mated technology solutions. He sug-gested that a hybrid model is a more beneficial strategy as opposed to robo-advisory services, suggesting that the passive management approach of robo-advisors was not true financial advice.

Tanzi also said that the traditional approach of only having personal interactions with advisors was not sufficient for the current day, where wealth management clients have a significant requirement for technol-ogy provisions. <

rEsEArCh

HSBC Private Bank: Female entrepreneurs in Hong Kong worth more than male counterpartsNew research from HSBC Private Bank indicates that 48% of entrepreneurs in Hong Kong worth more than $1m are female - with half of them being under the age of 35 - and that they are worth, on average, ($3.7m) more than their male counterparts ($3.3m).

The study is based on a survey of more than 2,800 active business owners worth more than $1m, which will form part of the HSBC Private Bank Essence of Enter-prise report that is due to be released early in 2016. The interviews were conducted in Hong Kong, Singapore, mainland China, United States, United Kingdom, Germany and France.

These figures are favourable as com-pared to the number of female entrepre-neurs in other markets - Germany seeing the lowest proportions (21%) and the United Kingdom coming in at 28%.

According to the study, there is also a greater proportion of women higher up the wealth scale - 67% of entrepreneurs in Hong Kong with a net worth of over $15m are female, compared to 33% in the West.

Apart from that, it was also found that entrepreneurs in Hong Kong display nota-bly different career trajectories as com-pared to those in the West. Many have

the tendency to start earlier and rely more heavily on support from family and friends. On average, these entrepreneurs set up their first busi-ness at the age of 27 (compared to 34 in the West). More than four in ten (44%) of those surveyed are still under the age of 35.

Entrepreneurs in Hong Kong were also found to be more focused on their ventures for the long-term than their Western counterparts. Less than a third (32% ) intend to exit - compared with those in the United Kingdom, 55% of whom expressed intention to sell their business."For Asian entrepreneurs who are proud

to have built successful empires, there is more of a focus on consolidating and growing their current enterprise," com-

mented Bernard Rennell, regional head of global private banking, Asia-Pacific and global head of family governance and fam-ily enterprise succession at HSBC Private Bank. "We often see family members in Asia reinvesting into the business to drive further growth." <


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intErviEW: rBC WEALth mAnAgEmEnt Private Banker International

Disciplined execution key to ongoing success of ‘One RBC’douglas Blakey meets wayne Bossert, vice chair of rBc wealth management, to discuss the bank’s strategic imperatives: leveraging and growing its high-performing asset management business; servicing ultra and high net worth clients in its priority markets; and leveraging rBc’s strengths and capabilities to bring the best of rBc to its clients

royal Bank of Canada’s (RBC) wealth management business unit, the coun-try’s largest wealth manager with a lead-ing share of the high net worth (HNW)

market and Canada’s largest fund company con-tinues to pick up award after award with a near monotonous regularity.

The clear message from Wayne Bossert, vice chairman of RBC Wealth Management, is that there is no danger of complacency and that chal-lenges remain to achieve the unit’s goals.

One of the world's top five largest wealth managers, RBC Wealth Management directly serves affluent, HNW and ultra high net worth (UHNW) clients globally with a full suite of banking, investment, trust and other wealth management solutions, from key operational hubs in Canada, the US, the UK, and Asia.

Douglas Blakey met with Bossert in the bank’s quiet period, just prior to RBC releasing its fiscal 2015 results: record breaking annual earnings smashing analyst forecasts by becoming the first Canadian company to top the C$10bn ($7.2bn) annual earnings.

Douglas Blakey: How is RBC continuing to deliver a consistently high performance in its wealth management business unit?

Wayne Bossert (WB): First and foremost, it is a disciplined execution through investment in our people and fostering a culture that delivers the

“One RBC” experience through collaboration and a client-first focus.

Our relationship managers identify their cli-ent’s individual needs and then use a customised, holistic team approach to preserving, building and stewarding family wealth across genera-tions. In doing this we evaluate the needs of our clients across four dimensions of capital – finan-cial capital, business capital, human capital and social capital – and seamlessly coordinate experts from across RBC to meet each need, while maintaining primary responsibility for the client relationship.

As a result, our clients have the benefit of the personalised service from their primary relation-ship manager as well as the breadth of expertise available to them from specialists across the RBC business. As a clear leader in capital markets, commercial banking, and investment manage-ment in Canada, we will continue to leverage these strengths and the expertise of our people to bring the best of RBC to our clients and deepen

relationships.

DB: How important are the last two of those four dimensions of capital – human and social?

WB: They have been growing in importance for some time and are becoming a key measure by which UHNW families choose and value their private bank. In today’s highly competitive private banking industry, financial and business capital planning are considered table stakes.

What clients really want is an integrated plan that also addresses their human and social capi-tal needs. In other words, how we can help their family manage inter-generational transition, family governance issues, stewardship of wealth, next generation education, strategic philanthro-py and foundations, and more.

DB: RBC has been making major investments in relationship management technology to help its advisors serve its private banking clients better. Can you give some recent examples?

WB: We’ve just launched a new interactive tool in Canada that improves the ability of our advisers to have a goals-based conversation

City nAtionAL At A gLAnCE

• rBc will introduce city national’s full suite of us private and commercial banking products and services to rBc clients - 340,000 rBc us wealth management households :204,000 rBc canadian cross-border clients and 88,000 rBc canadian commercial clients;

• enhancing us wealth & asset management plat-form: combined us-based client assets of c$393bn: brings rBc’s wealth management segment to over c$1.3trn in client assets globally;

• expanding distribution channels: rBc and city national wealth management products to be ser-viced by 2,100 combined advisers;

• Deposit synergies: the deal offers rBc the ability to attract additional deposits from rBc wealth man-agement and capital markets clients and utilise low cost sweep balances from rBc us wealth manage-ment as an additional competitive funding advan-tage to support future loan growth, and

• future growth initiatives: introduce city national’s private and commercial banking solutions through rBc’s us wealth management advisor and client base; leveraging rBc’s platform and financial strength to increase city national’s market pen-etration and accelerating expansion into other new high-growth markets through an expanded network.

rBC WEALth mAnAgEmEnt At A gLAnCE• c$382bn in client assets, generating over 65% of

rBc wealth management earnings on a full year basis;

• largest fund company in canada with 14.5% market share; leader in last twelve months of asset inflows;

• grew hnw market share by 400 bps to 19% in the last four years and anticipate reaching 20% market

share by 2016;• consistently driving revenue per advisor of over

c$1.2m per year, 42% above canadian industry average;

• top performing investment f irm with 79% of aum outperforming the benchmark on a three-year basis.


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intErviEW: rBC WEALth mAnAgEmEntPrivate Banker International

with their clients. myGPS allows advisers to pull and integrate relevant client data into one place, enabling them to define and prioritise goals for their clients, pursue the most appropriate opportunities, and track progress against milestones. The myGPS tool is so effective that it has already won an innovation award in the 2015 Global Private Banking awards as “Best Initiative of the Year in Relationship Management Technology.”

DB: RBC has been realigning its Wealth Management Business around the globe. What steps have you taken to deliver on this strategy?

WB: We have been refocusing our operating footprint and realigning our international wealth business over the past few years, to better serve and deepen relationships with clients from our priority markets.

We are prioritising our efforts in the regions and countries where we can add the most value to our clients and provide a high level of service for generations to come. Our wealth manage-ment international business is focused on building and growing a scalable and more focused business serving HNW and UHNW clients from our key operational hubs in Canada, the US, the UK and Asia.

DB: What about your global asset management business?

WB: Our Global Asset Management business is among the Top 50 global asset managers by AuM, has an investor asset mix of 45% Indivi- dual / 55% Institutional client assets, is the largest fund company in Canada and continually recogn- ised for its fund performance.

It has grown significantly through both Blue-Bay Asset Management and our GAM teams in London and Hong Kong and remains a key focus outside of North America. This business will be a continued focus of our global growth efforts.

Internationally, we will look to build investment management capabilities in the US and UK to strengthen our distribution network, and grow our institu-tional market share.

DB: Which client segments are you targeting and where will you serve them from?

WB: Apart from GAM, our wealth businesses will primarily serve HNW and UHNW clients from our key operational hubs in Canada, the US the British Isles and Asia because we know we succeed best when we leverage and build on the strengths of RBC’s other businesses.

DB: CEO Dave McKay has spoken of the massive importance of the bank’s investment in digital, with more than five million of the bank’s clients already actively engaged in accessing RBC products and services using online, mobile and tablet channels, a number up by more than 30% since 2012. With major additional investment being made in design-ing new products and services specifically for digital channels in the coming year, what is the wealth management unit's strategy for clients who may prefer to be self-directed and rely less on personal service and advice?

WB: Digital capabilities are increasingly critical to client experience. We recognise the demand for digital engagement, while also understanding that clients value our wealth managers as the centre point of their relationship due to their knowledge of clients, expertise, advice, and ability to offer broader RBC capabilities.

We are investing in digitally enabling wealth managers to enhance their ability to serve cli-ents, and in finding ways to improve the client experience through technology.

DB: Can you give me some details about your strategy towards millennials?

WB: Our millennial strategy is enterprise wide. We understand that the needs and conversations with this generation are not that much different from generations before but what is different is how we engage them. They want to do it their way. We support client choice,and believe that this segment, like all of our other client segments, should be able to select the advice and service model that suits them depending on their available time, interest and/or knowledge.

We are empowering them with solutions and focused on delivering a seamless, digitally-integrated, multi-channel experience. Likewise, we recognise their needs will change as they move through life stages. As an enterprise, we want to be ready to help them transition between value propositions as their needs evolve. <

City national: a “milestone acquisition” - Bossertthe us is rBc’s second home market, which is why it made the strategic decision to acquire city national and create a powerful platform for long-term growth.

wealth business is an important part of the bank’s franchise, serving 350,000 households in the us.

It is, says Bossert, a ‘milestone acquisition that significantly expands our growth platform in the us’.

with the transaction – rBc’s biggest ever acqui-sition - having closed in november, the bank’s focus is now on integrating – to bring the best of both organisations to its commercial, capital markets and wealth management clients.

ceo Dave mckay has spoken of city national client growth having been exceptional and early progress being made to launch rBc’s synergy pro-grammes.

rBc will focus around its ‘one bank, one client’ strategy, the hnw and uhnw client in the us, put-ting together its existing us wealth franchise with

the city national franchise, which serves very similar customers on the wealth side.

that organising philosophy of 'one bank, one client' is consistent with how rBc thinks about its franchise globally, particularly in canada and, argues mckay, the results will show up in the consolidated global wealth segment.

adds Bossert: “this acquisition creates a new leader in providing banking and wealth services to hnw and commercial clients in key us markets by combining our capabilities to deepen client relationships and to serve a broader client base with the aim of being the preferred provider in the us to corporate, institutional, commer-cial and hnw clients and their businesses.

“together we can offer more expertise, locations, products and services to clients in existing markets, and expand into new high growth markets. we’ve developed a phased rollout of city national private and business banking capabilities to rBc wm-us clients.”

n nEt inComE rBC WEALth mAnAgEmEnt (C$m) (2012-15)

600

700

800

900

1000

1100

1200

20122013

20142015

source: rBc

n EArnings By BusinEss sEgmEnt(%) rBC - FisCAL 2015

Capital Markets

Investor & Treasury Services

Insurance

Wealth Management

Personal & Commercial

52%

11%

7%

6%

24%

source: rBc


AnAL

ysis

WEALthinsight PrEdiCtions Private Banker International

for the past year or so, published research from WealthInsight has followed much the same theme: The rich getting richer and the tech

industry as a major source of wealth. We’ve seen Silicon Valley imitations crop-ping up all over the world, from London to Lagos. For the past decade or more, the holder of the ‘world’s richest’ title has nearly always been in tech and/or telecoms. So, when asked by The Times to predict the next ‘trillionaire’, we said that he or she (another trend has been the rise in female wealth) would probably have made their money from tech.

Looking ahead, then, to 2016, will we see more of the same millionaire making from the tech sector? In a world of uni-corns (private companies valued in excess of US$1 billion) and decacorns (the same but over $10bn), is there still room for growth, or have we seen the outer edges of a tech bubble?

In our most recent published research, WealthInsight’s US Wealth Book, we looked specifically at trends coming out of the tech sector. About a year ago, tech and telecoms outdid financial services as the largest source of wealth for HNWIs in the US.

The knock-on effects are evident, par-ticularly geographically: San Jose and San Francisco are among the five fast-est growing cities for HNWIs in the US, with the former in first place (see chart). Wealth managers and luxury companies have been flocking to these areas for a piece of the pie (even as fintech and e-commerce innovations eat away at their own industries).

However, what we also saw was a slowing in the number of HNWIs making their wealth from the tech and telecoms sector (we bracket them both as one since there is no longer much differentia-tion between them). There are currently 865,600 HNWIs who have earned their wealth from the sector in the US, which amount to 16.1% of the 5.3 million mil-lionaires currently in the US. Though in the past four years there has been an

11.1% increase in the number of HNWIs earning their wealth from this sector, it has slowed significantly since its peak of a year-on-year growth of 12.7% in 2012 to 2.7% currently.

Just as the recent tech boom has cre-ated a wave of new entrepreneurs, the curbing of their ranks is reflective of the industry’s slowing. While this is evident in the US, the causes are global. Here are the three main origins of this finding:

• Much of the subsiding in HNW growth has been caused by the industry’s maturity. It is apparent that there is less room at the top for the successful start-ups that are the key drivers of wealth

• With venture capitalism at an all-time high we are seeing less founder-owned companies at the top. Entrepreneurs are sacrific-ing equity for investment and skyrocketing valuations so that, when a tech firm does make it, there are less billionaire benefi-ciaries.

• The venture capital investments that have fuelled these staggering valuations are drying up for high

valued (unicorn) companies that are struggling to prove profitable business plans. These companies and their owners are therefore shedding money as valuations are realised. This is particularly prevalent in emerging countries where private funding has with-ered in the face of slowing econ-omies and turbulent currencies.

Whether a bubble or not, it would appear that a slowing in tech as a source of wealth is on the cards for 2016. But those looking over the precipice are not only the shareholding entrepreneurs. With few asset classes performing as well as tech start-ups in recent years, there has been pronounced interest from finan-cial firms of all stripes. This means that the wealthy financiers – the venture capitalists and alternative investors – are often more exposed than those in the thick of it.

Diversification is therefore crucial to financial planning in 2016. Financial advisors must take a pragmatic view to tech. Overexposure to illiquid compa-nies with spiralling valuations proved fatal to some during the dot com bub-ble in 2000 – those lessons could be well learnt.<

WealthInsight’s 2016 predictions: A bad year for unicornsthe tech sector has given rise to several millionaires in last decade. will we see more of the same millionaire making from the tech sector in 2016 or have we seen the outer edges of a tech bubble? oliver Williams, head, wealthInsight gives his views

n us City hnW groWth, 2010–2015 (%)

0

2

4

6

8

10

12

Dallas

Houston

San Diego

Boston

Los Angeles

Chicago

San Francis

co

New York City

Phoenix

San Jose

source: wealthInsight


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ProduCts & sErviCEs: oFFshorE BondsPrivate Banker International

Wrapping treasures offshorePrivate banks and hnwIs are continually on the look out for ways to lift tax burdens, especially in a low yield environment where gains are already modest. offshore life assurance bonds present an attractive option, enabling tax to be deferred and allowing portfolio gains to be compounded. John schaffer finds out more about these bonds that are growing in popularity

tax-efficiency has always been an important area of focus for private banks and clients. However, tax avoidance has come under a harsh

spotlight for private banks and their wealthy clients in the last couple of years, leading to hefty fines and reputational issues for several lenders.

In an increasingly demanding regulatory environment where aggressive tax strategies are being continually scrutinised, private banks are looking to insurance companies to issue off-shore bonds as they provide a transparent tax efficient solution for their clients’ portfolios.

Offshore life assurance bonds are particularly relevant in high tax jurisdictions such as the UK. Their primary use is to act as a tax “wrap-per”, allowing assets to be housed within a life assurance policy.

The European offshore bond market is pri-marily centred on the Isle of Man, Ireland and Luxembourg where many insurance companies have offshore units.

The most significant benefit of an offshore bond is tax deferral. Housing a client’s assets within this investment wrapper means that no tax is to be paid annually – taking away the burden of yearly capital gains and income tax charges. A private client can also withdraw an income from the assets, when encased in the bond, with an allowance of 5% of the original investment per year.

However, tax does have to be paid eventually, at the point when the benefit is taken out of the insurance policy. Steve Lawless, global head of banking distribution at Old Mutual Wealth, says that tax deferral is also beneficial for banks:

“The bank with the underlying assets can man-age the money purely in terms of buying exactly what they want, when they want, without wor-rying about timing and tax payments.”

In terms of assets that can be wrapped within an offshore bond, there are limi-tations depending on where the client is domiciled. In the UK, wealthy individuals are restricted to wrapping collective investments such as mutual funds. Although most countries allow for collective investments to be wrapped within an offshore bond, there are some juris-dictions that will allow clients to have direct holdings such as equities or corporate bonds.

Luxembourg Insurer, Lombard Internation-al, differentiates itself by offering its clients the ability to structure “unquoted assets” within its offshore bonds service. The insurer employs a team of 15 specialists for on-boarding and maintaining non-traditional assets.

Jurgen Vanhoenacker, marketing and wealth structuring at Lombard International, tells PBI:“Some countries allow for non-traditional

assets like private equity funds to be structured within an offshore bond. Apart from these home country restrictions, we need to respect the Luxembourg investment rules as well. Depending on the size of the client, the latter allows greater flexibility as long as the assets are securitised and transferable. “It is impor-tant to highlight that many countries require a full discretionary management of the port-folio and do not allow any investment influ-ence from the policy holder. The UK is a clear example of this.”

Lombard’s use of structuring non-traditional assets is the exception rather than the rule. In most non-Luxembourg offshore bonds, clients will be restricted to collective investments.

Dion Lindskog, head of life and pensions products at Royal Bank of Canada (RBC), says that although RBC advises on using the instrument for the majority of its private bank-ing clients, he suggests they shouldn’t put all of their assets within the bond. “Typically we rec-ommend that clients hold some assets person-ally to use their tax allowances. For example, in the UK there's a capital gains tax allowance of £11,100, and there’s a new £5,000 a year dividend allowance coming into play next year. Clients would need to hold assets personally to take advantage of these allowances,” he says.

The restrictions on the type of assets that can be held mean that offshore bonds may be a less efficient solution for UHNWIs, with a larger proportion of direct investments. Michael Leahy, international wealth direc-tor at Prudential, says that although there are some cases of ultra wealthy individuals using offshore bonds, the majority are within the £1-20m space.

Where the UK has offshore structures pre-dominately based in the Isle of Man and Ire-land, Luxembourg’s focus is more centred on cross-border HNWIs.

Offshore bond structures based in Luxem-bourg tend to be more expensive in terms of fees; however they can be advantageous if the policy holder wishes to liquidate their assets in a juris-diction with a lower tax liability. The demand is certainly present; Lombard International, one of the larger providers in Luxembourg, has $75bn in assets under administration. Leahy, Pruden-tial, suggests that insurers in both Ireland and Luxembourg will write EUR15bn in offshore life assurance policies in 2015.

The costs of placing assets within an offshore bond, however, have become competitive in recent years as more insurers enter the market.

From the insurers’ perspective, the commer-cial benefits are beginning to weaken. Leahy tells PBI that as the provision has become “more commoditised in recent years”, Prudential is stepping back from offering “vanilla” offshore bond solutions due to the price of the insur-ance wrapper being driven down significantly.

“We’ve stepped back, as a commercial decision, and we focus more on the bespoke end of the market where we can add more value.”Passing on wealth to the next generation is one of the key concerns for HNWIs, and offshore bonds are an attractive option for wealth succes-sion. Leahy says that offshore bonds can have advantages in jurisdictions where there are forced heirship regulations, including France and the Middle East, where Shariah law restricts the passing of assets. According to Lindskog, another advantage is where multiple lives can be assured on the life insurance policy: “It’s what’s known as a last survivor basis – so you could have six lives assured and the plan continues until the last of those six people die, giving control over when the policy is surrendered.” Lindskog adds that the policy is normally split up into segments. This can be useful, for example, when parents want to help their children with university costs, segments can be given to the child. The segments can then be encashed by the child using their tax allowances meaning that there is often little or no tax to pay.

Despite there being varied opinions around the commercial benefits of offshore bonds from the insurers’ perspective, their popularity among HNW clients seems to be on the rise. This pre-sents opportunities to further develop and cus-tomise these products. <


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View from the topIt has been a year of high-profile m&a deals, cost-income ratio conundrums, greater demands from regulators, and increased transparency. we hear from leaders at global private banks about where they think the wealth management market currently stands, and what their expectations are of 2016. Do they have any expert advice? read on

thrEE CritiCAL shiFts FundAmEntALLy shAPing thE WEALth mAnAgEmEnt LAndsCAPE: BArCLAys W&im

Akshaya Bhargava, CEo, Wealth and investment management, Barclays We live in rapidly changing times, and the wealth management busi-ness is no exception. Three critical shifts are occurring which are fundamentally shaping the way we will do business and the services we will provide as wealth managers in the future.

The first of these shifts is about the changing nature of wealth: the speed at which wealth creation is accelerating and the increasing mobility of the wealthy. More first generation wealth exists today than ever before - it is now possible to create a billion pound com-pany in three to four years when it used to take three to four genera-tions. Today’s high-net-worth individuals are also more mobile than ever before, with nearly half (43%) of the 2,000 wealthy individuals Barclays Wealth and Investment Management recently surveyed hav-ing lived in more than one country.

The wealthy are increasingly mobile geographically and move between countries in order to fulfil their international career aspira-tions, seize financial opportunities and ensure a better quality edu-cation for their children. The offspring of the current generation of wealthy individuals are even more likely to lead international lives, with most of those we surveyed expecting their children to live in more countries than they have lived.

Secondly, the regulatory environment in which we operate is becoming more rigorous and stringent. Wealth managers need to be sophisticated and have sufficient scale in order to provide a robust control framework that makes sense for a complex matrix of client profiles, geographical markets and product offerings.

Regulators increasingly require a heightened level of transparency of charges, transactions and product features, both for themselves and for clients through regulation like Markets in Financial Instru-ments Directive 2, Retail Distribution Review and Packaged Retail

Investment & Insurance Products regimes. We support their aims, but regulatory initiatives like these will demand significant investment in systems and much more industry collaboration than we have seen before.

The third, and perhaps most important shift, is technology, which is driving fundamental change across many industries – and financial services is no exception. Clients expect instant, direct, on demand and transparent access to their bank account and investments at a time of their choosing.

We think that the personal service offered by bankers can be enor-mously enhanced with technology and, while technology shouldn’t be an end in itself, it does have the potential to create a level of client engagement that has not been seen in our industry so far.

AdAPt or risk Losing thE nExt gEnErAtion oF hnWis: rBC WEALth mAnAgEmEnt

tim houghton, head of Client Experience and Channel strategy, rBC Wealth managementThe fact that young high net worth individuals (HNWIs) are vital to the future of wealth management is evi-dent. Within the US alone, an esti-mated $36trn of wealth is expected to be transferred from estates to heirs between 2007 to 2061 , in what has been described as the greatest wealth transfer in US history. This is only part of the story, of course. Increas-ingly, young HNWIs are entrepre-neurs, with plenty of hard-earned liquid assets and a list of distinctive wealth management needs.

But what makes young HNWIs tick, how will this influx of young wealth shape the wealth management landscape, and are wealth man-agers ready for the complexities of engaging with today’s younger generation?

Young HNWIs –those under the age of 45 – are already driving wealth management firms to adapt. They have grown up in the digi-tal age and expect to be able to access and manage their money online. It won’t be long before the majority of the clients that wealth manag-ers service are digital natives and for some this is already the case.

Wealth managers have not been oblivious to this evolution and have responded by improving digital and online service offerings. This is doubly important in the face of the growing proliferation of automated advisory services. Differentiating against the backdrop of the rise in digital wealth management services – most of whom provide simple services which only address a small percentage of the needs of HNWIs – is a real opportunity for wealth managers who


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wish to retain and grow their client base and remain relevant to their clients.

Indeed, whilst most wealth managers are clearly taking steps to introduce digital services to take into account an increasingly mobile client base, we must not underestimate how much young HNWIs value professional advice. Despite their use of online services, the 2015 World Wealth Report from Capgemini and RBC Wealth Man-agement revealed that young HNWIs actually have a higher prefer-ence – and need – for support and professional advice from their wealth manager than older HNWIs.

They also have less brand loyalty, showing a higher propensity to leave their wealth manager if their advice needs are not met. This is particularly the case for the first generation of young HNWIs, whose attitude to wealth management and exposure to advice is less likely to have been passed through generations.

There is also evidence to suggest that some wealth managers are not sufficiently aligning their services with their young clients’ biggest financial concerns. The World Wealth Report showed that wealth managers today are overestimating the degree to which they under-stand the needs of younger HNWIs, with a 15 percentage point gap between how well young HNWIs believe they are understood by their wealth manager and the perception of the wealth managers themselves.

According to the report, the primary concerns of young HNWIs revolve around health and financial planning, fears around assets lasting through their lifetime, being able to afford their preferred lifestyle in retirement, and rising education costs. Regrettably, some wealth managers underestimated the importance of these issues to younger clients by up to 23%.

This points to a shift in the way wealth managers will seek to nur-ture their client relationships in the future. Beyond what is being done at an individual firm level, joint industry initiatives have also been launched to improve the understanding of the needs of young HNWIs.

Whilst the points of access with the new generation of HNWIs have undoubtedly changed, there is no replacement for a skilled wealth manager who can provide holistic advice on a client’s unique cir-cumstances.

The most successful wealth management firms of the future will be those who can differentiate themselves to appeal to the new genera-tion of HNWIs both online and in person. These firms will empower their wealth managers, invest in training and education, and support full financial planning based on the comprehensive needs of their clients, whatever their age.

oF ChAngEs And oPPortunitiEs: ABn Amro Jeroen rijpkema, CEo of ABn Amro Private Banking internationalIn private banking, client behaviour is rapidly chang-ing. Our clients do business with us more and more, 24/7, via various channels. For instance, ABN AMRO’s Mobile Banking App in the Netherlands - which was only invented five years ago - is now used 53 million times a month! This offers great opportunities. We can be in

touch with our clients all the time and through different channels. Digital banking will continue to develop and grow in the coming years. Leveraging and integrating the multiple interactions via vari-ous channels into personalised service offerings will be a major chal-lenge. At the same time, it offers great opportunities for clients as well as for private banks.

Added valueIn the changing digital and regulatory environment, a key question for many private banks will be: how to remain meaningful to clients in a sustainable way. MiFIDII will require many private banks to adjust their current operating models, to distinguish their investment services more explicitly and to create total transparency of costs.

In view of these developments - digitally enabled investment solu-tions as well as the steady growth of passive alternatives - the need for real value addition will become even more prominent. One way of turning this into opportunities will be clear client segmentation and well defined investment propositions. Socially responsible investment strategies, applying ESG criteria, are becoming increasingly impor-tant components of these propositions, especially in Northern Euro-pean countries.

Another trend we can expect to continue is the ongoing growth of discretionary portfolio management, with more and more clients entrusting the management of (part of) their wealth to professionals, and choosing clear investment strategies.

Client due diligenceFor very good reasons, the requirements we ourselves, regulators and society at large, apply to knowing our customers, understanding their source of wealth and funds, their legal structures, their transactions and our own documentation of all this knowledge, have a profound impact on our industry. It requires serious investments in system capabilities, and training of staff - all tailored to select the right clients and countries, of which one can manage the associated integrity risks.

In this respect, the current trend of many private banks evaluating and refocussing their cross border services will continue. The ongoing attention of regulators and the public at large, around these sensitive topics, will continue as well.

FocusGiven the aforementioned trends and the associated and required investments, the earnings model of various private banking opera-tions will remain under pressure, especially if markets are not buoy-ant. This will continue to drive the pursuit for critical mass and on-going consolidation in the industry, i.e. the review of smaller, low growth operations.

At ABN AMRO we focus on a selective number of markets, pri-marily domestic, where we can leverage and grow our critical mass. In those markets we want to be the leading private bank, pursuing a multi-brand strategy in order to preserve local authenticity.

so only change?Whilst it is tempting to think about new developments only, many things do remain as important as always and the basics of private banking remain as relevant as ever.

Clients continue to value solidity, stability and reliability. Banks need to take care of the trust that is invested in them. Bankers should not over-reach. We can only be successful through the success of our clients. An adequate return on investments, wealth preservation, wealth transfer to the next generation, philanthropy - all these ele-ments remain as relevant as ever. Capital requirements and regulatory pressures have increased, which has had an effect on clients as well. We have to deal with it to the best of our capabilities.


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Private banks need to not only know who their clients are, but also have to prove that they really do know their customers. That under-lining requirement won't change, despite all relevant trends.

WhAt to ExPECt in 2016: PiCtEt WEALth mAnAgEmEnt

P i e r r e - A l a i n Wa v r e – E qu i t y Pa r t n e r, h e a d o f P i c te t i nve s t m e n t office, Chairman of the investment Committee of Pictet Wealth management

1. Focus on Fintech will sharpenEveryone is aware that the financial sector faces a techno-logical revolution, especially in how we interact with clients. For example, robo-advisors are offering algorithm-driven automated investment services

and typically charging lower fees than a financial advisor. The blockchain protocol is likely to disintermediate most processes in financial services. Busi-ness models are now becoming increasingly technology-driven, and these trends have the potential to have a big impact on margins. After a slow start, Fintech began to take off in Switzerland in 2015, and players in the wealth management sector will sharpen their focus on this area in 2016.

However, it is not yet clear how the rise of Fintech will play out for the wealth management industry, specifically how far these new technologies will find favour with clients in this space.

On the one hand, harnessing ‘big data’ will improve our understanding of clients’ behaviours and needs, and will make wealth managers better able to personalise and customise their offering. (One impact of this will be to increase the impact of the ‘emotional bias’ of investors, making behavioural finance even more important.) On the other hand, will ultra-high-net-worth individuals really be willing to entrust their wealth to an algorithm? The situ-ation looks similar to the tech boom in the 1990s in some respects—prob-ably there will be significant changes for the industry, but less revolutionary than initially envisaged.

2. Private equity will continue its risePrivate equity is set to be the best-performing asset class in 2015, and on our forecasts will also offer the strongest returns on a nominal annual average basis over the next ten years, at 13%. In a world of low returns, interest in private equity has understandably risen—even though the higher returns offered by private equity need to be weighed against its lack of liquidity (with a full investment cycle typi-cally 7-8 years). Wealth management institutions need to be prepared for private equity to continue to grow in importance in 2016 and beyond, which means cultivating strong partnerships with private-equity firms—as Pictet has been doing over the course of 25 years.

3. Fear of volatility will persistPeople are still in a 2008-09 mindset, worrying that equities will crash—and this is likely to remain a feature of 2016. Even though, looking at it on a ten year basis, the impact of 2008-09 on returns actually was not that dramatic: in fact, US equities returned 10.9% annually on aver-age in 2005-14, compared with 8.9% on average historically (since

1871). Yet many investors have low tolerance for volatility—and this will become more of an issue in 2016 as volatility increases, because of desynchronised central bank policies. The problem is that returns on traditional ‘risk-free’ assets are poor. The reason a 60/40 portfolio was able to deliver double-digit returns for much of the past 30 years was that long-term interest rates were steadily falling. As rates normalise, we expect 10-year US Treasuries to return only 1.6% annually on average over the next decade, which means returns of 6.9% on a 60/40 portfolio (split between the S&P500 and US Treasuries). Investors need to realise that in a world of low returns, there is no free lunch. If you want to boost returns, you have to take on more risk—or, more precisely, to accept more volatility, which does not actually mean risk.

kEy trEnds: LLoyds BAnk PrivAtE BAnking

markus stadlmann-Chief investment officer of Lloyds Bank Private BankingThe wealth management industry in the UK continues its theme of con-stant change with more potential M&A activity being discussed in the press and the explosion of fintech companies seeking to help provide a competitive advantage. Clearly the macro factors such as the economic cycle and volatile market performance are going to impact on the indus-try as they do every year but in addition there are key trends we should keep a close eye on.

The rise of the ‘disruptive’ Robo Adviser and the extent to which these new players will threaten the traditional wealth management and private banking models is widely published. Robo Advice is viewed by many as a solution to the advice gap which has become visible post-RDR. How-ever with clients becoming increasingly more ‘tech-savvy’ it should not be ruled out that Robo Advice could impact more affluent businesses too.

Headwinds to development include the fact that Compeer research consistently shows that face to face service remains important for clients and recently the three European Services Authorities expressed concern at the differences in rules on this advice and calls for further analysis of the risks of Robo Advice. This regulatory uncertainty and client prefer-ence to meet with an adviser where advice is needed are signs that the Robo Advice solution is likely to take time to develop.

But the opportunity is huge – according to PwC’s report Asset Man-agement 2020: A Brave New World between 2010 and 2020, more than one billion more middle-class consumers will emerge globally, represent-ing the largest single decade increase in customers in history. This increas-ing affluence will fuel the need for financial products for a young and growing constituency who it is generally assumed will be more ‘tech


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savvy’ and open to solutions such as Robo advice. Digital strategies are expensive to develop but essential, be they Robo Advice or execution-only solutions.

According to a recent study from EY, the global fintech industry is booming and London is at the heart of this growth which can only be good news for the private banking industry as we see the digital develop-ments becoming more main stream.

Investment in our industry and adoption of innovative technology is essential to keep up with our clients’ expectations as to how we should look after them. Successful businesses will look outside the industry as a barometer of what good service looks like.

MiFID II looms large on all investment firms’ radars. Key elements of the new rules are investor protection and transparency which are broadly welcome, but the work required to meet the requirements in a client friendly way is significant. According to the Wisdom Council’s July 2015 survey of UK investors, 75% welcome European legislation that offered investors complete transparency on all fees and charges but respondents also reminded us they value service and performance equally if not higher.

The attitude to value for money, how to measure it and compare it across different providers is still a pretty vague subject – but over time as Generation Next become the largest segment this will be a more central issue in provider selection and loyalty.

The FCA already has a focus on ensuring customers in the UK receive value for money and are placed in a position where they are informed and able to shop around.

This is a regulatory trend that will continue to develop through MiFID II, PRIIPs and other initiatives, although the challenge will be how to provide this information in a way that all customers are able to engage with and fully understand.

Finally, the latest Compeer Survey highlights the most sought after services that remain on the podium are investment advice, financial plan-ning and banking services. Being able to bring the best of these together secures a client’s relationship and yet there are still few who cover all three well. Building trust with clients by demonstrating value for money and integrity is not a new concept – we’ve just got to keep finding new ways to do it.

sEvEn FAmiLy oFFiCE thEmEs For 2016: northErn trust

david W. Fox, President of the global Family & Private investment offices group at northern trustEvery year, Northern Trust gathers its Global Family and Private Investment Office cli-ents for a series of closed door forums and advisor roundta-bles that offer a unique view into trends emerging among the world’s wealthiest fami-lies and the family offices that serve them. As we reflect back on what we learned at our 2015 events and look forward to 2016, there are sever-al themes that are top of mind for our family office clients.

operational AlphaFamily offices are working to create “operational alpha” in their

enterprise by conducting business more efficiently while reduc-ing costs, especially through increased automation of processes, consolidation of providers and data aggregation. More frequently, we are seeing family offices conducting formal business process reviews with providers to streamline processes and procedures between parties.

next gen EngagementThere is an increased desire for next-gen education and peer-to-peer networking groups for both future generation family members and their family office staff. Providing financial information "on the fly" for family members is key while still being mindful around confiden-tiality and security.

diversification through hedge FundsClients are seeking true sources of diversification, typically through hedge funds, as they prepare for a lower return environ-ment. With the return projections for conventional fixed income too low for many ultra-sufficient investors, hedge funds can pro-vide significant and important diversification benefits to family office portfolios.

risk management & security Cyber threats and fraud are two of the major risks to family and pri-vate investment offices. Offices are evaluating their risks, performing gap analysis and implementing new internal and external controls to mitigate risk. There is an increased focus on security in all respects: technology, personal and travel – Family offices are conducting holis-tic security reviews.

succession Planning & governance Succession planning for family leadership, office staff and trustees with stewardship will continue to be an area of heightened focus. Structured governance programs with multiple committees are being reconsidered, but need consistent evaluation and often reorganiza-tion to include future generations.

Environmental, social & governance investing (Esg)Families are looking for ESG tilted options that do not trade risk or return, especially as the next generation becomes more involved in the investment decision making process. Impact investing through direct investments or co-investing is gaining interest, but there is difficulty in sourcing these types of invest-ment opportunities.

direct investingInvestors with expertise or trusted contacts in a particular area are increasingly making investments directly in private companies. Strategy is in part driven by the muted investment returns environ-ment, so family office clients are seeking uncorrelated sources of returns.

Looking forward to 2016, the regulatory environment will con-tinue to pose challenges for family offices and the financial industry as a whole. We also expect “low and slow” monetary policy, with a shallow trajectory of future rate increases and ongoing headwinds from the impact of global demand levels and global income inequality.

As globalisation continues, the UHNW population and the family offices, advisors and institutions that support them will continue to experience opportunities and challenges as they navigate through the constantly evolving global marketplace.


Technology tangents the 'whatever will be, will be' approach does not work when it comes wealth managers optimising technology. Private banks need to have long-term views around how they will maximise It offerings – be it in the regulatory arena, for customer engagement and satisfaction, operational efficiency, or risk mitigation. looking ahead at 2016, online investment managers and specialist It vendors give their views

Wealth management: where tech innovation adds value

If wealth managers want to retain clients and their top relationship managers they need to embrace digitisation and IT modernisation, writes Pierre Bouquieaux, product director wealth management at Temenos

Wealth management is behind the digital curve. Retail banks know that the ability to analyse customer data allows them accurately to target products and improve service, sales and profits. While wealth managers are getting there, the sector is still behind retail banks in digital planning and implementation. Given the structural changes to the market, this is not good enough. It is costing clients, staff and profits.

Over the last few years, the market has been going through some important structural changes. The merger of onshore and offshore private banking, as a result of the elimination of bank secrecy and tax heaven statuses, together with the transfer of wealth to generations X and Y, have opened the market and are forcing wealth institutions to offer new services in order to compete with new business players like mass affluent or retail banks.

There’s also been a lot of talk of the disrupters in wealth management – the fintechs offering new services. These include mobile banking and new portfolio management services via, for example, robo-advisor soft-ware. But should this be considered an opportunity or a threat? It fun-damentally depends on how fast traditional wealth managers will be able to digitize their platform to provide attractive and competitive services.

Wealth managers have two key advantages over fintechs. Firstly, although regulation is still seen as a considerable challenge by wealth institutions (according to 23% of respondents of the 2015 Temenos sur-vey*), their ability and experience to cope with it provide them with a significant advantage over fintechs. Secondly, it’s the relationship they already have with their customers and the amount of data they hold on them. This has been built up over many years, sometimes generations, and is a highly valuable resource.

A customer-centric model supported by a strong digital offer will allow them to leverage this data and provide a better service. The data will have whole histories of transactions, preferences, risk analysis, accept-able levels of returns and more, and can be used by the relationship manager to offer the most tailored and appropriate service.

The fintechs will struggle to have this resource, which is probably why according to Temenos’ survey 28% of wealth managers still con-sider their traditional competition as the main threat. Customer loyalty is also seen as the most important priority and retaining experienced relationship managers to liaise with them also ranks highly for 26% of the respondents. That is because loyalty is a two-way street. When relationship managers change jobs they take with them on average a third of their clients and they often move when a rival can offer better products to their clients.

Given the above priorities and perceived threats, it means wealth man-agers must address the needs of these advisers. Firms need to give these advisers the best tools so that they can offer the best service with up to 27% of wealth managers in the survey agreeing that IT modernisation (equally in core and mobile systems) is a key investment priority, shifting significantly from previous years’ views.

Just as digital is helping retail banks improve services, revenues and profits, it will help wealth managers too. The longer they wait, the more they risk losing in terms of staff, clients, revenues and profits – to disrupt-ers of course, but more likely to their existing rivals. It’s catch-up time.*Shifting Sands: Banking in the Digital Era (Temenos, 2015)

nitty-gritty back end innovation, growth and the gender imbalance

Nick Hungerford, CEO and co-founder of Nutmeg, gives his fintech outlook for 2016

The year 2015 has been a boom year in UK financial technology. 2016 will be better still. If I had to characterise the industry’s development in the last twelve months I would say it had succeeded in grabbing head-lines, achieving real growth, and engaging customers. If there’s been a problem, perhaps it is that the back-end – the underlying technology – has been neglected in favour of the consumer-end.

So in the next 12 months, I predict more work on the nitty-gritty: the best FinTech innovations in 2016 will be in back-end technology, or B2B. I expect to see more software and tools that help existing firms do their core business better – to manage secure payments records (Tradle), compliance obligations (Behavox), corporate finance (Origin), and so on. The government, aware of this need, is developing an API standard for banking, so FinTechs can create bank comparison tools for customers.

At the same time, I also expect the sector as a whole to keep growing. I predict more investments by incumbents, like Schroders’ 2014 invest-ment in Nutmeg. I expect to see fast growth in developing markets – wit-ness the growth of WeChat in Asia, of Yandex in Russia. Here in the UK, I believe mobile-only banking will finally take off (Mondo, Atom Bank)

– eight new banks were authourised in the UK during the last five years, compared to just one in the five preceding years. And I foresee rapid growth in some specific niches – for instance, PropertyPartner will track the upward fortunes of the heated property market.

I also expect to see exits, with companies sold or looking to raise cash through IPOs. This will result in the first deployment of proceeds as generation one entrepreneurs invest in and start new businesses.

It can’t all be rosy, however. There will be some failures. I expect Schwab to give up on its fee-free model of managing investments in the US. Bitcoin will remain on the margins, crippled by (among other prob-lems) volatility and, ironically, a massive trust problem. At Nutmeg we do see a future for the distributed ledger, however, and I predict 2016 will bring a welcome pivot from over-excited speculation at FinTech confer-ences to the unglamorous business of actual implementation.

In spite of failures, I think we’ll see further flourishing in the network of organisations supporting FinTech’s growth. InnovateFinance will recruit its 200th member. I think we’ll see more innovation at the FCA (see the recent Sandbox, the Innovation Hub, and various welcome con-sultations). I hope to see more supportive policy work from the CMA, and a programme of proper reform of financial advice from the FCA and Treasury’s Financial Advice Market Review.

Finally, following Eileen Burbidge and Harriet Baldwin’s appoint-ments during 2015 to FinTech-related roles in HM Treasury, I expect


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to see more women taking prominent roles in the industry. I hope to see firms engaging more actively with female customers, to correct today’s gender imbalance across the FinTech customer base. Women have to make international payments, women have to put their money some-where – but, today, far fewer women than men are using FinTech prod-ucts. We recognise, however, one welcome fact: the number of journalists writing about FinTech seems to be balanced in favour of women!

From FAtCA to Basel – the impact of regulation will continue to be significant

Ed Royan, COO EMEA, AxiomSL comments on the regulatory requirements that private banks will have to keep up with in 2016, as well as the technology provisions that need to be put in place to remain compliant

From anti-tax evasion measures to liquidity metrics, the private bank-ing industry has been kept busy with a range of new regulatory require-ments over the past year. With no let-up in sight, many firms are now carefully assessing the technology they will need to stay ahead in 2016.

Arguably the most significant regulatory milestone for private banks this year was the beginning of reporting under the Foreign Account Tax Compliance Act (FATCA). This US anti-tax evasion regulation requires financial firms around the world to identify and report on accounts held by US taxpayers and citizens. In 2015, firms were only obliged to report on accounts opened between July and December 2014. As a result, many of them used short-term, tactical solutions to do their reporting.

However, in 2016, the scope of reportable accounts will be expanded significantly and banks are therefore looking to technology to automate their compliance.

The US is not the only country toughening its stance on tax evasion. In 2016, banks in Crown Dependencies and Overseas Territories, such as the Cayman Islands, will need to begin reporting to the UK authori-ties on accounts held by UK taxpayers. Meanwhile, banks around the world will need to start collecting the data that will be required for the Common Reporting Standard (CRS). Often referred to as ‘FATCA on steroids’, this regulatory initiative will involve more than 100 countries exchanging data about offshore accountholders from 2017.

Aside from tax, liquidity has been one of the key areas of change in recent months. As part of Basel lll, banks have had to adopt two com-plex new metrics: the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR). In 2016, those in the European Union (EU) will also need to begin calculating and reporting the results of the Additional Liquidity Monitoring Metrics (ALMM).

In order to run the calculations mandated by the LCR, NSFR and ALMM, and produce an accurate picture of their liquidity, banks need to aggregate granular data from the different systems in which it is main-tained. The large volumes of data involved mean the banks cannot do the calculations manually and are instead migrating to technology solutions.

As part of the Basel reforms, in 2016 private banks will also need to prepare to use a number of new calculations that have been developed to ensure they have enough capital to mitigate different types of risk.

So far the Standardized Approach for Measuring Counterparty Credit Risk Exposures (SA-CCR) has garnered the most attention. However, this is just one of a long list of calculations, which banks will need to plan for strategically because many of them are interdependent.

Traditionally, many banks have chosen to use separate IT systems to manage individual regulatory calculation and reporting requirements. However, with so many new regulations being rolled out, this model is becoming increasingly complicated, expensive and impractical. As a result, a growing number of banks are now looking to use a single flex-ible platform to manage all of the different regulatory calculation and reporting requirements. This trend is going to continue in 2016.

Regulatory change is one of the key themes in the private banking industry today and technology’s role in helping banks to manage the new requirements is increasing every year.

the ever growing importance of technology in wealth management

Technological innovation has become essential to ensure that the wealth management industry serves the future needs and demands of the customer, market, and regulatory landscape, writes Thibaut Jacquet-Lagreze, head of marketing and sales HQ at Avaloq

As we head into 2016 the wealth management and private banking industry is facing a dramatic change. More demanding clients, digital transformation, regulatory changes, internationalisation and growing competition are increasing the overall costs of operations and hitting profit margins. As a result of such challenges, traditional business models are being forced to transform. This presents three distinct challenges for wealth managers.

The first being costs versus profitability and how to strike the right balance. Wealth managers face increasing pressure to demonstrate they are providing value for money to their clients. Their service offering has to stay relevant in a market where fintechs such as robo-advisors are now aggressively targeting affluent and tech-savvy investors, with new investment management services at a very low-price. Wealth managers therefore need to improve their efficiency and level of service in order to increase profitability and competitiveness.

The second challenge sees wealth managers continuing to navigate their way through the increasing costs and complexity of financial regu-lations. Global and local regulatory changes make international growth highly challenging. Utilising technology to comply with new and chang-ing regulations in a cost-effective way has become more critical.

The third challenge is digital transformation and the gauntlet it lays down for wealth managers. The cornerstone of this is to meet client expectations in digital channels. Clients want transparency on their investments' risk and performance and expect informative, continuous interactions from wealth managers no matter what channel is being used. Adapting the digital channels to an appropriate level of service is also imperative and for wealth managers this means tailoring the right level of information and self-service depending on the type of services offered

- managed accounts, advisory or execution-only.Although in the coming years wealth managers will move towards

greater communication through digital channels, this will not replace face to face meetings or phone calls as human interaction will remain a fundamental part of the relationship between wealth managers and HNW clients. Looking further ahead, as technology continues to devel-op, wealth managers will get the opportunity to further increase their cli-ent experience with the use of artificial intelligence. There could be inter-esting applications in the fields of risk and performance optimisation, behavioural finance or wealth planning. However, this is a topic that is still currently being widely debated and undoubtedly will continue throughout the coming years.

In the meantime, wealth managers have already started to leverage market data available. For example, they have started implementing innovative portfolio construction engines to optimise the risk/return of client investments. So, as big data becomes increasingly relevant and small data remains equally important to support client relationships, it has never been more vital for wealth managers to take advantage of smart technology to add further value to their proposition. One thing is clear - the wealth management industry should continue to change at a rapid pace. As a result, technological innovation has become more essential to ensure the industry continues to serve the future needs and demands of the customer, market and regulatory landscape.


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tExPErt CommEnts And ForECAsts: APAC Private Banker International

APAC overview: Through the looking glass a flourishing and diverse region providing ample opportunities for wealth managers to capture big shares of wallets, asia Pacific is still the golden spot that private banks are flocking to. however, the region also presents its unique share of challenges. Industry experts look back on the year gone by, and give their views on the themes and trends that will shape aPac's wealth market in the year to come

A rECAP oF PrivAtE BAnking in AsiA in 2015: Ey

Jan Bellens, Asia-Pacific Banking & Capital markets Leader, Ey, and Jeroen Buwalda, Asia-Pacific Wealth & Asset management Advisory Leader, EyAsia continues to forge ahead as the bat-tleground for private banks, with statistics indicating that at 4.7 million individuals holding $15.8trn, it superseded North America as the geography with the larg-est pool of HNWIs in 2014. The region is creating wealth at an astonishing pace, with more funds coming into the orbit of professional managers as HNWIs diversify from liquid assets like cash or real estate into equities, fixed income and alternative investments.

The growth was most phenomenal in China, with a 17.5% rise in nouveau riche residents to 0.89 million in a corresponding wealth expansion of 19.3% to $4.5bn in 2014*. While full-year data for 2015 has not been released, preliminary findings indi-cated that exponential growth in the emerg-ing nations of China, India, Indonesia and Thailand will have propelled Asia's HNWI population and wealth value to the highest globally by end-2015.

trends and implications: 2015Even as private bankers battle for a big-ger slice of the burgeoning Asian pie, real-izing the exciting potential of the region's wealth hubs remained challenging. Success stories mask a tough reality, particularly for players with less than $20bn in AuM

-- the tipping point below which asset bases struggle to generate sufficient revenue to be profitable. Such institutions had to con-tend with higher operating cost-to-income ratios (CIRs) in the 80s-90s (as compared with tier-one players with CIRs in the low 60s), and 2015 saw those with sub-scale operations withdrawing, downsizing or otherwise attempting to scale with M&As and partnerships.

Increased operating expenses in 2015 were typically a result of the need for tech-

nology enablement to support the build-out of digital capabilities and big data analyt-ics and to facilitate control and compliance, the lack of trained talent (a very real issue in emerging Asia, where relationship manag-ers with financial expertise and investment acumen are prized assets), and increasing regulations.

Regulators, for instance, continued to focus on know-your-customer, anti-mon-ey laundering, client onboarding and tax transparency, and this entailed significant changes to internal systems, corporate gov-ernance, control frameworks, processes and procedures that escalated GRC expenses for the year.

Traditionally, Asian private banking cli-ents -- the self-made entrepreneurs and first generation HNWIs -- have favoured trans-actional capital markets products. How-ever, as intergenerational wealth transfers increase, product mix is moving to longer-term wealth protection and succession plan-ning solutions.

Therefore, faced with higher cost-to-serve yet increasingly sophisticated and price-sen-sitive customers, top private banks rightly focused on client service models in 2015. This necessitated building more targeted cli-ent engagement models, further expanding from traditional transactional services to the higher-margin strategic advisory space

to support evolving investment behavior, and spending on advanced analytics to enable deeper segmentation, multichannel integration, and better lead generation to expand share of wallet. The drive to raise efficiencies saw progressive institutions investing in technologies (such as leveraging digital technology like robo-advisors for automated advisory) and enhancing the overall productivity and competency of client-facing advisors.

What Lies AheadThe future of private client management is resplendent in Asia, but private bankers with a toehold in the industry cannot afford to sit on their laurels. New players and the entry of FinTechs, an evolving landscape and increasingly demanding clientele mean that skills and tactics need to be continu-ously refined.

EY believes that the successful wealth managers of tomorrow are the ones who can articulate strategies that adequately emphasise their investment expertise and technological innovation, understand and cater to clients' investment objectives and financial goals, attract and retain skilled talent, and swiftly respond to Asia's com-petitive environment to engender profit-able growth.*Capgemini


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Private Banker International

stEAdy ExPAnsion And inCrEAsing soPhistiCAtion oF thE APAC industry: hsBCBernard rennell, regional head of global Private Banking, Asia-Pacific, global head of Family governance and Family Enterprise succession, hsBC Private BankThere is no crystal ball to see into the future. However, we do see a number of trends unfolding which will continue to gain momentum next year and beyond. Many clients are becoming more sophisticated and are looking for equally sophisticated solu-tions, and an investment philosophy that matches their own. They are looking for advice over and above just execution.

Sophisticated wealthy families increasingly realise the benefits of diversification through thoughtful asset allocations and are eager for more tailored solutions from their private bank. At HSBC Private Bank, we believe in viewing clients' wealth holistically and offer-ing a range of services to suit their increasing-ly complex needs, from investment advisory services to intergenerational wealth transfer.

There is also a new wave of wealth being generated through rapid economic growth in parts of Asia. Specifically, we see increasing wealth and demand for private banking ser-vices from the Pearl River Delta region and ASEAN. If the ASEAN region were a nation, it would have the world’s seventh-largest economy. In fact, the Asian Development Bank forecasts the region will grow 4.6% in 2015 and 5.1% in 2016.

Similarly, the Pearl River Delta (PRD), the region in southern China that neighbours Hong Kong, is responsible for more than a quarter of the country's trade volume and 10 per cent of its GDP (Statistics Bureau of Guangdong Province). The PRD continues

a period of growth and wealth creation that matches Hong Kong’s development since the early 1990s.

Robust growth in both of these regions translates to significant wealth creation not only from existing businesses, but also from rising entrepreneurs who are building their legacies. In a recent HSBC Private Bank study, we found that many entrepreneurs in Asia tend to start their businesses earlier in life. The average age for these entrepreneurs to set up their first business was 29, com-pared to 34 in the West. They also tend to be focused on their businesses for the long-term. For example, in Mainland China, less than a quarter (24%) of entrepreneurs sur-veyed intend to exit compared with those in the UK where over half (55%) intend to sell their business.

Asia-Pacific continues to be a strong growth area for private banking, and we expect to see steady expansion and increasing sophistication of the industry as increasingly wealthy clients seek both investment management and preser-vation solutions. We are an international bank that is truly at home in this dynamic region, ready to support our clients.

morE disCiPLinE And inCrEAsEd CoLLABorAtions: EFg BAnk

kong Eng huat - Chief Executive officer for singapore Branch and southeast Asia, EFg BankThe world economy is expected to continue to grow slowly with heightened geo politi-cal risks. Interest rates, although expected to be increased in the USA, will still be low and divergent across the world. In this envi-ronment, clients will still want to enhance yields but on a conservative and defensive basis.

Clients will not be keen to take aggressive speculative positions. Hence private banks will accelerate the move away from transac-tions and product sales to asset allocation and long term investments. Managed solu-tions including discretionary and advisory portfolios will be the focus. In line with the managed solutions approach, banks will strengthen their investment leadership to ensure that they are providing clients with the right asset allocation models and advise.

Private banks will have to renew their efforts to refresh clients on the relevance of their Trust structures in the environment of common reporting standards and auto-

matic exchange of information (AEOI). The banks will also have to help clients under-stand the implications of AEOI on their existing wealth structures and their wealth transfer strategies to the next generation.

In line with the implementation of the AEOI, countries are offering tax amnesties to their citizens. This means that there may be more repatriation of funds back to the home countries. Offshore banking is still the core business for most private banks and they will have to find ways to retain the offshore funds and also consider going onshore in markets with huge client bases. Offshore funds that are kept offshore on deposits with low yields and not part of a global investment and business strategy are

more likely to be brought back home.Private banks will focus relentlessly on

profits. Banks who have difficulty growing revenues will continue to implement cost containment exercises. Private banking is a service business and the bulk of the cost is bankers' compensation. Hence bankers productivity and performance management will be key to ensure profitability. Although banks will continue to recruit senior bank-ers, they will also exit non performing bank-ers more aggressively, resulting in marginal growth.

Finally, private banks will be more disci-plined in terms of targeting and servicing cli-ent and market segments. They will also be more open to collaborate with other finan-cial services companies to access and lever-age expertise for their clients. For example, pure play private banks like EFG Bank will retain an open architecture platform to source best in class products and work with or refer business to other financial services companies where it makes sense.

The year 2016 will be another challeng-ing year but there are opportunities to grow the business. Like the fire monkey which is the Chinese zodiac sign for the lunar new year in 2016, we all need to be strong and determined and be excellent in setting direc-tion and meeting them.

ExPErt CommEnts And ForECAsts: APAC


New

sdigEst Private Banker International

m&A

Julius Baer to buy Commerzbank Luxembourg business for EUR68m

Julius Baer has signed an agree-ment to purchase Commerzbank International SA Luxembourg (Cisal), a fully-licensed private bank, which has about EUR3bn ($3.26bn) in AUM for approxi-mately EUR68m.

As per the terms of the deal, Julius Baer will pay approxi-mately EUR68m to Commer-zbank, of which EUR25m is assumed to be regulatory capital.

The agreement, which would be accretive to adjusted earnings after closing, will expand Julius Baer's position in the Luxem-bourg financial centre.

Julius Baer said in a statement that total restructuring and inte-gration costs are expected to amount to EUR20m.

Subject to approval by the regulatory authorities, the deal is scheduled to take place in the summer of 2016.

Upon completion of the deal, Julius Baer's Luxembourg-based business will manage total assets of around CHF5bn ($5bn) on a pro forma basis.

Julius Baer CEO Boris Col-lardi said: "The acquisition of a fully-licensed bank in Luxem-bourg as well as the Temenos-based booking centre and the related IT expertise, provide us with important strategic flexibil-ity for our European businesses."It strengthens the implementa-

tion of our global banking plat-form project by aligning Europe with our Swiss and Asian plat-form strategy, thus reducing the execution risk."

Julius Baer region head North-ern, Central and Eastern Europe, Gian Rossi said: "We are pleased to add significant scale to our local franchise in the important international financial centre of Luxembourg and look forward to leveraging the business oppor-tunities provided by the full bank licence."

ProduCts & sErviCEs

DBS Private Bank introduces PE Access to clients

DBS Private Bank has launched PE Access - a programme through which the bank introduces direct investment deals to its ultra-high-net-worth clients.

PE Access caters to clients worth S$50m ($35.4m) and above who have a higher risk appetite, seek alternative forms of investment and prefer to have direct access to the businesses in which they invest.

The programme allows DBS Pri-vate Bank to flag relevant invest-ment deals to interested clients, who can then perform their own due diligence and proceed to invest directly in the business."Our Asian customers are gener-

ating wealth in the areas that they do well in and know best. They want to put their money where their mouth is," says DBS head of consumer banking and wealth management Tan Su Shan, add-ing that clients in the region tend to invest in businesses within their own sectors.

The introduction of PE Access - which has a minimum deal size of S$5m - is hoped to spur the growth of private equity and venture capi-tal deals in Asia. According to DBS, it is also the first to be introduced in Singapore by a local bank.

m&A

Banque Syz completes RBC Swiss subsidiary merger

Swiss private bank Banque SYZ has completed its merger with RBC Suisse, the Swiss subsidiary of Royal Bank of Canada, renamed Banque SYZ Suisse SA.

The integration, which has been entirely financed with Banque SYZ's own capital, comes five months after the acquisition of the Swiss subsidi-ary of Royal Bank of Canada.

With this merger, the AuM of the wealth management business of SYZ Group has doubled to nearly CHF22bn ($22bn) and the total assets managed by the Group have

reached CHF40bn, making it one of the top 20 largest private banks in Switzerland.

The deal, which was entirely funded with internal resources, will enable SYZ Group to expand its reach to new markets.

In addition, the merger will allow Banque SYZ to develop in regions including Latin America and Africa.

The integration has created econ-omies of scale due to the increase in assets under management and the profitability of investments required to meet new demands imposed by regulatory controls.

SYZ Group CEO Eric Syz said: "The merger has enabled us to become a top 20 banking institution. I'm convinced that this strengthen-ing will be beneficial to our clients and help our company meet the new challenges facing the Swiss financial market."

ProduCts & sErviCEs

Intesa Sanpaolo opens private banking branch in London

Italian lender Intesa Sanpaolo has expanded its presence in UK by opening a new private banking branch in London.

The London branch will be headed by Stefano Ferraiolo and project manager Giuseppe Bonini.

The new office will provide a range of services including adviso-ry and customised portfolio man-agement, insurance and wealth management products, asset man-agement, financing solutions and banking products.

The bank is planning to hire a team of approximately 15 profes-sionals in 2016.

dEALs

FPA signs advice referral partnership with ING Direct

The Financial Planning Association of Australia (FPA) has partnered with ING Direct to launch a pilot national advice referral program, which will connect ING Direct Liv-ing Super customers with FPA Pro-

fessional Practices across Australia.The nine-month pilot, which is

slated to commence in January 2016, will be available to ING Direct Liv-ing Super customers who have asked for comprehensive financial advice.

Under the deal, the cost of the first FPA adviser consultation will be at no cost for Living Super customers.

The pilot referral program will have only a limited number of plac-es for FPA Professional Practices, based on geographic requirements.

ING Direct national partnership manager for residential and wealth, Tim Hewson, said the partnership is launching at a time when retire-ment planning is increasingly on the radar for all Australians.

ProduCts & sErviCEs

Chubb to launch additional risk management services for art collectors

Chubb Personal Insurance has unveiled four new complimentary risk management services for art collectors.

The new services include disaster planning consultation, renovation consultation, household staff train-ing and post-auction review.

Chubb said that its fine art spe-cialists will create customised plans to help clients prepare and respond to disasters, including basic salvage measures they can take.

Prior to and during renovation, clients will be instructed on how to protect works from vibration, dust and debris, among other hazards.

The company added that as part of the service, fine art specialists will impart training to household employees on the proper protection of collections, including securing items in high-traffic areas, main-taining environmental controls, cleaning techniques and caring for outdoor sculptures.

Fine art specialists will also per-form semi-annual assessments to determine whether insured works are valued in line with recent auc-tion prices for the artists and similar works, the company said in a state-ment. The new services are being added to a suite of other services. <


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Country survEy: mExiCoPrivate Banker International

Foreign banks dominate in Mexicolarge foreign private banking players dominate mexico’s private banking market, catering to a relatively small population of hnwIs. a recent report from Wealthinsight forecasts that there will be an increase in hnwI numbers, presenting an opportunity for the wealth management sector to flourish further

mexico’s GDP was worth $1.283tr in 2014, representing 2.07% of the world economy. However, despite the size of the economy, the wealthy popu-

lation in the region is modest. The high net worth individual (HNWI) pop-

ulation in Mexico rose by 2% in 2014, reaching approximately 148,000 and holding $751bn in wealth. This follows a 0.9% population rise in 2013.

According to WealthInsight, though, the Mexican HNWI population is set to grow 11.8% by 2019, reaching 170,500. Their wealth is forecast to grow by 29.9%, reaching $1.02tr.

Even though the wealth in the region seems to be on the rise, as does the wealthy popu-lation, the wealth inequality is staggering. Mexico is home to the world’s second richest man, telecommunications tycoon Carlos Slim, who is worth an estimated $77bn by Forbes. According to Oxfam, however, the country’s four richest individuals are worth as much as the 20 million poorest. The wealthy population in the region represent a minute 0.1% of the total population, which stood at 124m in 2014.

Private banking landscapeMexico’s domestic bank credit is currently at around 16% of GDP – much lower than other emerging economies. In 2004, foreign bank participation accounted for 82% of total banking assets in Mexico, turning the Mexi-can banking sector to an oligopolistic market. A Federal Competition Commission has been formed (Cofece by its Spanish acronym) in order to encourage competition in the bank-ing sector.

The country’s wealth management industry is currently dominated by foreign private banks. With ample exposure to international markets, foreign banks are in a better position to pro-vide more sophisticated and diverse investment options to the Mexican wealthy in comparison to their local counterparts.

source of wealthAccording to the WealthInsight report, FMCG accounted for the primary source of wealth for 15.3% of local HNWIs in 2014. Basic Mate-rials was the second-largest source of wealth, with 12.6% in the same year, followed by finan-cial services and construction and engineering with 11.6% and 10.6% respectively, and media with 8.9%.

Asset allocationReal estate was the largest asset class for Mexican HNWIs in 2014, accounting for 45.2% of total HNWI assets. This was followed by business interests with 17.1%, equities with 15%, fixed-income with 11.9%, cash and deposits with 5.9% and alternatives with 5%.

Mexican residential property prices rose by 4.9% in 2014 and have been showing an annual rise of 4–5% since 2005. In recent times, the Mex-ican real estate market has been dominated by the demand of resort communities. Ever since the tequila crisis in 1994 – when due to the spike in interest rates there were large scale bank defaults

– the Mexican property market had shown con-tinuous recovery.

Aside from real estate - equities, alternatives and business interests grew during the review peri-od, at 42%, 33% and 31% respectively between 2010 and 2014.

Alternative assets held by Mexican HNWIs

increased marginally during the review period, going from 4.8% of total HNWI assets in 2010 to 5.0% in 2014. HNWI allocations to commodities decreased marginally from 0.9% of total HNWI assets in 2010 to 0.8% over the same period.

WealthInsight expects allocations in commodi-ties to decline over the forecast period to reach 0.7% of total HNWI assets by 2019, as global liquidity tightens due to a forecast near-term drop in demand for raw materials from China. This is expected to cause global commodity prices to flatten.

Mexican HNWIs’ liquid assets were valued at $246.0bn as of 2014, representing 32.8% of the total wealth holdings. <

n mExiCAn hnWis - distriBution By industry (2014)

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n mExiCAn hnWis - AssEt ALLoCAtions (%) 2010-2019 (ForECAst)

Asset Class 2010 2014 2019

total alternatives 4.80% 5.00% 5.30%

total real estate 44.30% 45.20% 42.70%

total cash 7.30% 5.90% 5.30%

total fixed-Income 13.20% 11.90% 11.40%

total equities 13.60% 15% 19.00%

Business Interests 16.70% 17.10% 16.30%


n LEAding mExiCAn PrivAtE BAnks (2014)

BAnk Aum

Domestic

Banamex Private Banking $65.5 bn

Banorte Private Banking $46.3 bn

corporativo gBm, saB de cv $9.2 bn

FoReiGN

BBva Bancomer Private Banking n/a

Banco santander (mexico) sa n/a

Banco credit suisse $1.5 tr

grupo scotiabank $80.0 bn

grupo financiero hsBc $32.8 bn



Feat

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gEnEvA roundtABLE: ovErviEW Private Banker International

Geneva roundtable: Putting the best ideas forward the executive roundtable in geneva to reveal findings from the white paper Tryst with Transparency: How private banks in Switzerland and Singapore are ensuring best-of-breed service in a demanding regulatory ecosystem led to enlightening discussions, potent questions and valuable insights. meghna mukerjee provides an overview of the event

the exclusive executive roundtable, hosted at the Mandarin Oriental in Geneva, Switzerland, was aimed at select representatives from Switzer-

land’s banking industry. The afternoon was dedicated to revealing key findings from the whitepaper Tryst with Transparency: How private banks in Switzerland and Singa-pore are ensuring best-of-breed service in a demanding regulatory ecosystem as well as encouraging discussions and debates around the themes that the whitepaper tackles.

Written by Private Banker International and sponsored by DTCC, the whitepaper high-lights how both Switzerland and Singapore are ensuring client centricity in an era of increased transparency and regulatory pressures, as well as establishing future best-practices. The pres-entation of the key findings was carried out by Meghna Mukerjee, editor of Private Banker International."Switzerland and Singapore are arguably two

of the world’s most important wealth hubs, and they personify two distinctive financial markets. "While Switzerland is the world's largest des-

tination for cross-border wealth management with centuries of traditional private banking experience, Singapore represents a fast-grow-ing and consistently flourishing wealth hub, supported by the rapid rise in regional wealth, the number of wealthy individuals, and global popularity.“Despite facing their unique industry dynam-

ics, our research found that C-level executives at private banks in both Switzerland and Sin-gapore are grappling with the same concerns,” said Mukerjee.

The whitepaper presentation was carried out in two sections. The first half discussed two key themes from the whitepaper – 'Suc-cessfully coping with a multitude of regulatory demands' and 'Ensuring client centricity while meeting reporting obligations'.

After revealing insights from these two segments, the topics were opened up to the executives around the table for further dis-cussions and scrutiny, which led to insightful observations.

The conversation started with the topic of cross border wealth management.

“The banking industry in Swit-zerland has made its peace with the fact that there will be more transpar-ency, but details a r o u n d c r o s s border weal th m a n a g e m e n t are stifling small banks. The big global banks can rationalise book-ing centres and cli-ent segments, and find ways around offering profitable and effective cross border wealth management services, but many small banks in Switzerland have to abide by several rules across different countries and they don’t have a physical pres-ence in all these countries. “These small banks don’t know how to do

cross border banking anymore and most of private banking will remain cross border. These small banks don’t have ways to set up operations in more countries or service clients belonging to different nationalities, having different residences. Additionally, they have restrictions around the products they can offer. That is a considerable issue,” said an executive.

The topic of outsourcing was also widely discussed by the executives as a function that is gaining popularity among tier 1 private banks as opposed to being an offering that is only pre-ferred by tier 2/tier 3 banks.

An important point mentioned was that due to the increased move towards transparency, outsourcing is getting a boost among private banks. Historically, a primary hindrance to outsourcing was the several layers around client confidentiality that banks needed to adhere to, said one executive.

According to the participants of the round-table discussion, despite recent reputational issues, Switzerland remains the premier hub of private banking. Its wealth of expertise and quality of service set the country apart from all the other financial centres across the world.

These conversations were followed by a cof-

fee and networking session. Going back to the key highlights from the whitepaper, thereafter, the second half of the event discussed three crucial topics explored in the research: 'Impor-tance of efficient data management in an era of transparency', 'Riding the KYC and AML wave in stormy regulatory times', and 'The value of promoting a culture of innovation'.

Talking about the amount of data that private banks need to collect, refresh and report regularly due to recent rise in regula-tory demands, the advent of banks working together in a collaborative environment was considered. This approach would particularly be useful for the commodity-type, reference data that private banks need for their KYC and reporting functions.

An executive also pointed out that the tech-nology department at private banks - particu-larly the data management units - are not aligned with the business side, and there needs to be more interaction between these units so that IT strategy and operational strategy can develop together.

The topic of innovation in private banking was also touched upon. Everyone agreed that innovative thinking needs to become part of the DNA of the private banks for them to remain relevant and forward thinking. This was completely in line with the findings of the research as well. The engaging after-noon ended with a networking and drinks reception. <


Feat

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gEnEvA roundtABLE: ovErviEWPrivate Banker International


New

stEChnoLogy Private Banker International

Let’s talk technology: monthly update

Vontobel launches new decision making tool to buy structured productsSwiss asset and wealth manager Vontobel has rolled deritrade SmartGuide, a customisable decision making tool to buy structured products by utilising smart-and crowd data, for its relationship managers and asset managers in Europe and Asia Pacific.

With the launch of the new platform, Vontobel Financial Products makes user activity and market data accessible to deri-trade users.

The wealth manager said that the new tool will enable custom-ers to compare products against a wider context of alternative options, significantly increasing their confidence in the decision making process.

The foundation for this new service is the user and market activity data from Vontobel's multi Issuer platform, deritrade MIP, which is custom built for yield enhancement products.

deritrade SmartGuide com-bines the large user and market activity data with deritrade tech-nology and algorithms, process-ing it into valuable information for relationship-and asset man-agers.

Markus Pfister, head of engi-neering, responsible for technol-ogy at Vontobel Financial Prod-ucts, said: "With deritrade Smart-Guide we combine our state-of-the-art technology with our inno-vation power. It's a very challeng-ing but also extremely interesting project. This service confirms the impressive scalability of our IT architecture."

Gerhard Meier, head deritrade MIP with responsibility for the distribution of the platform, said:

"With deritrade SmartGuide we offer our customers an extremely efficient tool and empower client advisors in their most important duty-finding within seconds, out of the huge universe of possibili-ties, the best investment product for each and every client."

Raiffeisen acquires 10% of Avaloq’s sharesSwiss banking group, Raiffeisen, is acquiring 10% of Avaloq group's shares. The move comes as Avaloq, a banking technology company, looks to expand its number of shareholders.

Raiffeisen has been a partner of Avaloq since 2007. The two com-panies are involved in a joint ven-ture named Arizon, which was founded in January 2015. The venture sees the Avaloq Banking Suite being implemented in all Raiffeisen banks across Switzer-land. The latest share purchase further solidifies the relationship between the two companies.

Swiss headquartered Avaloq is increasing its shareholder base to develop its capital base. Until recently, the company was owned by employees and management. Avaloq looks to accelerate the implementation of its growth plans. Francisco Fernandez, CEO of Avaloq, commented: "The strengthening of our successful partnership with Raiffeisen is a win-win situation for both com-panies. It will enable the Avaloq group to further accelerate its growth, while we continue to foster our agility. In addition, we will be able to speed up our inno-vation in developing sustainable solutions in sectors such as Digi-tal Banking and Managed Bank-ing Services."

Bluebay Asset Management goes live with SimCorp Dimension

London-based fixed income spe-cialist Bluebay Asset Manage-ment has implemented SimCorp Dimension to support its middle and back office operations across the entire investment book.

Bluebay will use SimCorp Dimension to manage its diverse range of asset classes, focused on fixed income and currencies, in a single system.

The platform will also allow Bluebay to support increasing volumes of trades across a num-

ber of core functions, including derivatives clearing, investment book of record (IBOR), fund valuation, investment accounting, collateral management, and data management.

With approximately $58bn assets under management, Blue-Bay required a single system that enabled a high degree of automa-tion and scalability.

BlueBay COO Luc Leclercq said: "SimCorp Dimension gives us strong operational function-ality and scalability. It is closely integrated with our main busi-ness applications and as such pro-vides a fully integrated solution."It also provides the simplic-

ity and flexibility required by a dynamic business like ours and enables us to have a timely and accurate overview of our posi-tions and exposures across our investment activities."

Barclays opens Rise innovation hub in South Africa

Barclays Africa has launched a physical and virtual global start-up community, Rise, in Cape Town, South Africa, to support fintech innovation. The bank already has Rise sites in London, Man-chester, and New York. It has also announced plans to open a Rise hub in Tel Aviv.

The Cape Town site will offer co-working facilities, events space, and a bespoke setting for various initiatives including the Barclays Accelerator programme.

The bank announced its plans to open a Rise hub in Cape Town in October 2015.

FIS wraps up SunGard acquisition

FIS, a provider of banking and payments technology solutions, has completed the acquisition of financial software firm SunGard.The cash and stock deal, agreed to in August 2015, valued SunGard at $9.1bn, including the assump-tion of SunGard debt.

The combined entity will operate

with a workforce of over 55,000, offering technology solutions and services covering retail and insti-tutional (or wholesale) banking, payments, risk management, asset solutions and insurance.

The combined company will have $9.3bn in revenue on a pro-forma basis. As part of the deal, FIS will repay SunGard's existing debt excluding SunGard's senior notes.

Commenting on the deal, FIS president and CEO Gary Norcross said: "This acquisition creates one of the broadest sets of technology assets and market expertise in the industry, and allows FIS to present new opportunities to our existing client base as well as to financial services markets that we have not historically served."

JHC unveils new wealth management software

JHC Systems, a provider of wealth management solutions, has launched a new software plat-form to enable wealth managers to offer better investment services and manage more clients.

Called NEON, the new applica-tion will enhance wealth managers' productivity by combining client management and investment management in a single solution, all driven by advanced workflow tools. The platform will also alert wealth managers to potential issues and opportunities, allowing them to be proactive and make bet-ter informed decisions on behalf of investors, the company claims.

JHC head of product Peter Mur-phy said: "NEON's mission is to enable investment professionals to work smarter and achieve more. We have achieved this by putting the wealth manager at the heart of our design, resulting in an incred-ibly powerful yet highly intuitive application."Strong investment performance

is a key differentiator for our cli-ents, and with NEON we are introducing a suite of investment analysis tools to help maximise investor returns whilst managing risk and ensuring alignment to mandate." <


New

s

rEguLAtionPrivate Banker International

the latest in regulation

a monthly round-up of the big regulatory announcements that impacted the private banking and wealth management industry across the globe

rBs to pay Eur23.8m to settle tax-evasion allegations in germanyroyal Bank of scotland (rBs) has agreed to pay eur23.8m ($25.9m) to german prosecutors, to settle allegations that the swiss operations of its private banking arm, coutts, helped some clients dodge taxes.

the investigation, which was revealed in february 2015, followed the leak of details of 100,000 accounts at hsBc's swiss banking business. the probe covered a 10-year period until 2014.

german prosecutors investigated current and former employees of the private bank's Zurich and geneva offices.

It is believed that the settlement involves immunity for any current for former staff.

edinburgh-based rBs agreed to sell coutts International to union Bancaire Privée uBP sa (uBP) in march 2015 as part of its strategy to shrink global operations to focus mainly on consumer and commercial banking in its home market.

British wealth managers still failing clients, says FCABritish wealth managers and private banks have made progress in demonstrating the suitability of their clients' portfolios, however, some firms need to make substantial improvements in client information practices as well as ensuring the portfolios they manage truly reflect the needs and risk appetite of their customers, the financial conduct authority (fca) in its thematic review has found.

the review, which covered 150 customer files from 15 firms, found that 23% of the firms indicted a high risk of the client having received unsuitable advice and a further 37% of the files showed that the wealth manager's advice was

'unclear'.overall a third of firms covered in the review

fell substantially short of expected standards.Britain's financial regulator said that it is

considering enforcement action against five firms whose investment portfolios are so out of line with client needs. the regulator added that these five firms may be required to undertake significant remediation programmes to raise standards.

fca found that many firms are still unable to demonstrate suitability due to a lack of up-to-date customer information, poor risk profiling or failure to record customers' financial positions.

In one case, it found no indication that one file had been updated "between the customer taking up the service in october 2010 and our

requesting the file, 4.5 years later". also some companies were found to be exploiting elderly customers.

swiss banks Cornèr Banca, Bank Coop reach deal with us to settle tax evasion caseswiss banks cornèr Banca and Bank coop have reached resolutions with the us Department of Justice (DoJ) over the tax evasion cases under the department's swiss bank programme.

cornèr Banca will pay $5.06m and Bank coop will pay $3.2m in penalties to the us to avoid prosecution over allegations accusing them of helping americans evade taxes.

as per the terms of the non-prosecution agreements, the banks have agreed to cooperate in any related criminal or civil proceedings and demonstrate implementation of controls to prevent misconduct.

the DoJ said that cornèr maintained and serviced 898 us related accounts with over $351m in assets since 1 august 2008.

Based in lugano, switzerland, cornèr offers a full range of traditional banking services and also specializes in private banking, payment cards and securities trading.

cornèr maintained correspondent accounts at a us bank to facilitate certain transactions for its clients and also the bank's relationship managers travelled to the us at least 10 times to visit existing cornèr clients between 2001 and 2008.

the bank also allowed its us clients to enter into hold-mail agreements in order to hide assets and income from the Irs. It also provided its us clients with the option to request numbered accounts, including code-name accounts.

Bank coop offered a variety of traditional swiss banking services including hold mail, numbered accounts and travel cash cards to help us clients in hiding their assets.

Ato cracks down on tax evasion using private school fee recordsaustralian taxation office (ato) has ramped up its focus on offshore tax evasion by visiting seven adviser firms linked to offshore arrangements and contacting over 100 parents who paid their children's fees from an overseas bank account.

the ato said the move forms part of a new wave of action to combat offshore evasion which had involved the ato obtaining more than 5,000 client names from wealth management firms and compiling a list of 100 advisers and promoters operating globally that have a direct link with people who may have evaded taxes.

the agency ato obtained information from about 60 private schools and matched it against

tax returns filed by parents.the ato added that it will now share the

information with the nine key overseas tax administrations. some of these offshore advisers are located in Jersey, switzerland, guernsey, British virgin Islands.

the moves by the ato come about as a result of data projected from Project Do It, which provides reduced taxes and penalties for people to voluntarily disclosure offshore income and assets.

isle of man signs tax information exchange agreement with spainthe Isle of man has signed a tax information exchange agreement (tIea) with the kingdom of spain in london.

the agreement is part of the Isle of man government's commitment to meet international standards in tax co-operation and transparency.

the pact was signed by José manuel gutiérrez Delgado, financial counsellor of the embassy of spain to the uk, and eddie teare mhk, the Isle of man's treasury minister.

the tIea extends to the information held by banks, other financial institutions and any person acting as a representative or trustee and also includes information about the legal owner and effective beneficiary of companies.

the agreement allows for the exchange of information for tax purposes upon request between the two countries. this deal represents significant progress in terms of tax fraud prevention tools and will combat international tax fraud.

guernsey Finance to open hong kong office in 2016guernsey finance is set to open a representative office in hong kong in the first quarter of 2016.

guernsey finance's china representative wendy weng, who is based in shanghai, will use the office as a base to conduct further promotional activities on the wider southeast asia market.

the hong kong office will be used by the guernsey financial services commission (gfsc) to provide regulatory advice to those in the region.

the new office is centrally located at three Pacific Place in admiralty and will add to guernsey finance's china office, which opened in 2008.

guernsey finance ceo Dominic wheatley said: "the hong kong office is an exciting development

not only for guernsey finance, but also the Island's financial services sector which has a growing interest in the region.” <


Profile:Full name: mr. andrew n. liveris

known As: andrew liveris

gender: male

Age: 61

date of Birth / year: 05 may 1954

Citizenship: nationality | australia;

Domicile | united states of america

home town: michigan

Languages: english

andrew n. liveris is president, chairman

and chief executive officer (ceo) of

the Dow chemical company, a global

specialty chemical, advanced materials,

agrosciences and plastics company based

in midland, michigan. he also serves

as director of International Business

machines corp. since 2010.

mr liveris is a director of the special

olympics, is chairman of the u.s. Business

council, vice chair of the Business

roundtable, and a member of the u.s.

President's export council. he is a member

of the u.s. china Business council, the

u.s.-India ceo forum, the Peterson

Institute for International economics and

the american australian association. he is

a founder and chairman of the Board of the

hellenic Initiative and serves on the board

of trustees for the herbert h. and grace

a. Dow foundation, and the united states

council for International Business.

Born in 1954, mr liveris attended Brisbane

state high school. he holds a bachelor’s

degree in chemical engineering from the

university of queensland. he is a chartered

engineer and a fellow of the Institute of

chemical engineers. mr liveris resides in

midland, michigan with his wife Paula and

three children.

Liquidity Event11-Dec-2015 (announced date) the Dow

chemical company and DuPont entered

into a definitive agreement to merge their

businesses.

AnAL

ysis

Liquidity ProFiLEs: LivEris/hArris Private Banker International

Liquidity profilesPBI has teamed up with sister company wealthInsight to provide monthly liquidity events and related profiles that have piqued its analysts' interest. this month we profile: andrew n. liveris and Parker harris

Andrew n. Liveris

The Dow Chemical Company, a diversi-fied chemical company, and E. I. du Pont de Nemours and Company (DuPont), a chemical and life sciences company, entered into a definitive agreement to merge their businesses. The merged entity will operate under the name, DowDuPont.

DowDuPont w i l l b e dua l headquartered in Michigan and Dela-ware, the US. Andrew N. Liveris will be executive chairman and Edward D. Breen will be CEO of DowDuPont. DowDuPont is expected to have a mar-ket capitalisation of approximately $130,000m (MM).

Under the terms of the transac-tion, shareholders of Dow Chemical will receive a fixed exchange ratio of 1 share of DowDuPont for each Dow Chemical share; and the shareholders of DuPont will receive a fixed exchange ratio of 1.282 shares of DowDuPont for each DuPont share. Dow Chemi-cal and DuPont shareholders will each own approximately 50% of the com-bined company, on a fully diluted basis, excluding preferred shares.

The transaction is expected to deliver approximately $3,000 MM in cost synergies, with 100% of the run-rate cost synergies achieved within the first 24 months following the closing of the transaction. Additional upside of approximately $1,000 MM is expect-ed from growth synergies.

Parker harrisHarris Parker, Co-Founder of Salesforce Com Inc,

the US based company operating in the technology sector, has sold 3,771 shares, representing a 0.0006% stake in the company.

The shares were sold at a price of $79.85 each for gross proceeds of $0.3m.

Profile:

Full name: mr. Parker harris

known As: Parker harris

gender: male

Age: 56

year of Birth: 1959

Citizenship: usa

home town: san francisco

Languages: english

Parker harris co-founded

salesforce.com, Inc. he served

as its executive vice president

of technology from December

7, 2004 to february 2013. he

was a co-founder of left coast

software, a Java consulting

firm and served as its vice

president (vP) from october

1996 to february 1999.

Born in 1959, harris resides

at san francisco, california,

united states of america.

harris received a Bachelor of

arts from middlebury college.

Liquidity Event:

27-nov-2015 (announced

date) harris Parker,

co-founder of salesforce com

Inc, has sold 3,771 shares,

representing a 0.0006% stake

in the company


PEoPLE movEsPrivate Banker International nEW

s

n PEoPLE movEs

name moved from moved to old position new position

singapore Didier von Daeniken Barclays standard chartered head of private banking, asia Pacific, middle east and africa global head of private banking

uk charles cohen sanlam Private Investments canaccord genuity head of private clients senior investment director, investment team

uk andy thompson Intrinsic old mutual wealth director of Intrinsic ceo of Intrinsic financial services

uk martin clubbs scottish widows old mutual wealth strategic relationships manager pensions specialist

uk gaius Jones ashcourt rowan financial Planning

rathbones Investment management

ceo head of financial planning

uk David nowakowski roubini global economics

Baring asset management senior director of research director of research, fixed income team

uk mike kleyn Diamond lightsource synchrotron schroders scientific software developer advanced Beta team

uk Duncan shand Blackrock schroders senior roles in the global markets strategies group advanced Beta team

uk Belinda Burgess northern trust northern trust head of nordics head of channel Islands

switzerland mathilde lemoine hsBc france edmond de rothschild head of economic research and market strategy group chief economist

switzerland matthew kates nomura Investment Bank union Bancaire Privee european equities executive director director and senior analyst

switzerland françois savary reyl & cie Prime Partners s.a chief strategist and head of asset services cIo

luxembourg rachel hamen state street Bank kBl european Private Bankers cfo, continental europe cfo

usa Julia o'Donell m&t Bank wilmington trust commercial branch manager private banker

usa scott sumner state street wealth managent fiduciary trust head of relationship management vice president and head of custody

usa Jeff cave merrill lynch eventide funds director, uhnw wealth management specialist head of distribution

usa r. thomas manning Boston Private wealth Putnam Investment management cIo ceo and president

uae lyad quttaineh credit suisse emirates Investment Bank head of middle east team head of private banking

Brazil andre esteves Btg Pactual n/a ceo and chairman n/a

singapore Didier von Daeniken Barclays standard chartered head of private banking, asia Pacific, middle east and africa

global head of private banking & wealth management

singapore wendy lim Bny mellon manulife asset management

ceo, managing director of business development - aPac chief executive for singapore

malaysia mohamed rafe bin mohamed haneef hsBc cImB group ceo of hsBc amanah malaysia Bhd ceo and executive director of cImB Islamic

Bank

hong kong ravi sriskandarajah Bmo financial Bmo financial managing director, australia managing director and head of global asset management (asia Pacific)

hong kong king lun au Bank of china hong kong

eastspring Investments ceo ceo for hong kong

uk Dmitri rozanov efg Private Bank efg Private Bankmanaging director, private banking eastern europe and russia as well as global market coordinator for cee, russia

managing director for private banking and member of the management committee, responsible for central and eastern europe

uk David allen amP capital sarasin & Partners co-head of asset management global head of equities

People movesthis month the departure of the global head of private banking at standard chartered, michael Benz, was announced, to be replaced by Didier von Daeniken, head of private banking, asia Pacific, middle east and africa. here are all the people moves that recently made news


FEAt

urE

PBi middLE EAst ConFErEnCE And AWArds 2016 Private Banker International

Editor: meghna mukerjee Email: [email protected]

Correspondent: John schaffertel: +44 (0)20 7406 6703Email: [email protected]

Contributor: Douglas BlakeyEmail: [email protected]

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group Publisher: ameet Phadnis tel: +44 (0)207 406 6561 Email: [email protected]

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PRIVATE BANKERPrivate Banking: Middle East Conference and Awards 2016 – Preview following the continued success of Private Banker International’s (PBI) global event, PBI wealth summit and awards, as well as PBI london, PBI is launching a new conference and awards event that is dedicated to the middle east

the Gulf Cooperation Council (GCC) is a region that is associated with vast sums of wealth. A captive market for the wealth

management industry, the region has expe-rienced a steady rise in the high net worth (HNW) and ultra high net worth (UHNW) population. According to PBI’s sister data-base WealthInsight, Saudi Arabia had a HNW population of 49,168 in 2014 and the UAE had the greatest population of HNWIs in the region at 50,595.

The GCC has been the most consistent emerging market, recording growth of 16% or more each year since 2010 and doubling total private wealth to $2.2tr for an over-all CAGR of 17.5%, according to a report from Strategy& (GCC Private Banking Study 2015).

The Private Banking: Middle East Confer-ence and Awards is due to take place on 14 March 2016 in Dubai, which has a large con-centration of both international and domes-tic private banks in the region.

The conference will bring together pri-vate banks, family offices, independent wealth managers and intermediaries in active discussions about the key issues facing the wealth management industry in the Mid-dle East.

The conference will ask important ques-tions about the future of private banking in the face of a dramatically changing land-scape. The themes of the day will revolve around regulatory updates, next generation clients, consumer behaviour, latest technol-ogy trends and the rise of private banking innovations. Exclusive research and case studies will also be discussed at the confer-ence.

Meghna Mukerjee, Editor of PBI, says:"Having a conference focusing on the

wealth management sector in the Middle East comes as a natural progression for PBI as wealth in this region is growing at a fast rate. "Private banks – both local and global –

are offering interesting, edgy, and tailored products and services in the GCC region.

The market on the whole has very distinctive characteristics that merit dedicated discussions."

The day conference will be followed by an Awards ceremony and gala dinner, which has been created to recognise the best-in-class institutions and individuals making the big-gest impact within the industry. "The Awards function will be a great

opportunity for the industry partici-pants in the region to come together and celebrate achievements, network, and potentially hone their own institu-tion’s strategy as well as competitive positioning," added Mukerjee.

Nominations are now open for the Private Banking: Middle East Awards.

Award Categories for Private Banking: Middle East Awards 2016:

• Best Private Bank in the Middle East for Digital Initiatives

• Best Innovation in Digital Initiatives – Front office

• Best Innovation in Digital Initiatives – Middle and back office

• Best Private Bank in the Middle East for Mass Affluent Customers

• Best Private Bank in the Middle East for Next Generation Clients

• Best Private Bank in the Middle East for Ultra High Net Worth Clients

• Best Private Bank in the Middle East for Islamic Finance

• Best Private Bank in the Middle East 2016 – local

• Best Private Bank in the Middle East 2016 – foreign For more information contact: [email protected]

Multichannel digital solutions for nancial services providers

To nd out more about us please visit:

www.intelligentenvironments.com

Intelligent Environments is an international provider of innovative mobile and online solutions for nancial services providers. Our mission is to enable our clients to always stay close to their own customers.

We do this through Interact®, our single software platform, which enables secure customer acquisition, engagement, transactions and servicing across any mobile and online channel and device. Today these are predominantly focused on smartphones, PCs and tablets. However Interact® will support other devices, if and when they become mainstream.

We provide a more viable option to internally developed technology, enabling our clients with a fast route to market whilst providing the expertise to manage the complexity of multiple channels, devices and operating systems. Interact® is a continuously evolving technology that ensures our clients keep pace with the fast moving digital landscape.

We are immensely proud of our achievements, in relation to our innovation, our thought leadership, our industrywide recognition, our demonstrable product differentiation, the diversity of our client base, and the calibre of our partners.

For many years we have been the digital heart of a diverse range of nancial services providers including Atom Bank, Generali Wealth Management, HRG, Ikano Retail Finance, Lloyds Banking Group and Think Money Group.

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Documents

PRIVATE BANKER - Verdict...BTG to sell BSI, three months after purchase approval Brazilian investment bank, BTG Pactual, is looking to sell off Swiss private bank, BSI, only three