From private banking to wealth management
More than 370 professionals from within the private banking sector attended to PrivateBanker 5th edition that took place at the Le Royal hotel in the city centre last Thursday, February 6th. The topic of the day Private banking is dead: now what? From private banking to wealth management has raised several discussions throughout the three panels.
Roger H. Hartmann, Chief Executive Officer and Director of the Espírito Santo Financial Group and Chairman of the ICMA Private Banking Working Group has opened the day and launched the first panel discussion around Juggling with regulations and tax. He highlighted the core role banks played towards their client and the importance to create trust between the two. There is a mistrust atmosphere and it would be critical for the sector to fix this lack of trust.
Juggling with regulations and tax “Of course, there are still clients thinking they can escape to Dubaï, Maurices but it will be temporary” says Roger H. Hartmann. This sentence illustrates the animated debate that has opened the day composed of panel discussions, workshops and privileged moments of networking.
Moderated by Serge Krancenblum, CEO, SGG Group and President LAFO; together with Adrian Leuenberger, Member of the management Board, Head of Private Banking International and Investment Management, Bil and Ivan Schouker, CEO, TD Direct International and Roger H. Hartmann; the first topic Juggling with regulations and tax to be addressed has been the occasion to know more about exchange of information and transparency issues as well as potential axis of development for the private banks.
Although the private banking sector remains confident for the future, all panellists agreed on the fact that banks have a key role to play in assisting their clients. Indeed, the ongoing financial turmoil forced governments to pursue tax dodgers, which made several clients concerned about the situation. Banks should help them to look at a more suitable environment and encourage them to go towards transparency as soon as possible.
According to Adrian Leuenberger, offshore banks are the future and it has nothing to do with tax. An opinion shared by Roger H. Hartmann who highlighted during the debate that we “are not prisoner of a jurisdiction. People are sticky. Why don’t they move to other places? This could be a smart way to address their tax issues? If they are not tax compliant, they can change”. When Serge Krancenblum asked to Adrian Leuenberger if he advises his clients to opt for other jurisdictions, he answered that the process towards more transparency had been implemented very early in his company. However what he has observed is the importance for client to preserve discretion. They do not like the fact that government may have access to their account and once again, according to him, it is the role of the banks to help their clients having faith in the regulators.
Nevertheless, the process towards more transparency has already begun. In Luxembourg, for instance, the new law regulating Family Office contains a special paragraph about full transparency. For Adrian Leuenberger, it is very important to be transparent with the client because he cares about performance. “Being more transparent about the environment is a guarantee that good things happening”, he said. The discussion ended around anti-money laundering that has impacted the industry and new opportunities that can be taken under consideration for the private banking sector. About the last point, Roger H. Hartmann gave the audience an interesting perspective. Indeed, for him, Africa is the continent that represents great opportunities in general and at a later stage for private banking. He thinks that Africa is like Asia in 1975. For the moment, the continent does not benefit from the availability of a private banking environment, except South Africa. He glimpses an opportunity, just as in the South East of Asia in the 80s, to see an explosion of the market, but it will only work if the compliance/know your customer framework is properly addressed and robust enough.
Crisis as an asset
The second panel of the day Crisis as an asset has enhanced the first discussion being more focused on challenges and the contribution of the private banking sector to the country. In this frame, Benjamin Collette, Partner, Deloitte Advisory & Consulting and moderator of the second debate of the day, has presented figures of one of 2013 Deloitte Tax & Consulting’ survey. It reveals that in spite of the crisis, the contribution of the private banking sector seems to be extremely stable. Among figures presented: 35% of Luxembourg GDP comes from the Financial Sector (directly and indirectly), 17% of the people working in Luxembourg are in Financial Services and the contribution of the financial sector in the Luxembourg economy has decreased by 10% following the financial downturn. We also learn that the employment generated by private banks represents 16% of the financial sector’s employment.
Together with Christian Borner, Head Investment Products & Services, UBS Luxembourg S.A; Luc Leclere, Head of Key Clients & Head of Internal Family Offices, BNP Paribas Wealth Management; Ivan Schouker, CEO TD Direct International and Fabrice Sauvignon, CEO, La Mondiale Europartner; he made an overview of the private banking sector and the place it occupies in Luxembourg.
For Ivan Schouker “we are going through a transition and Luxembourg is a fantastic place to be based in”. A view shared by Fabrice Sauvignon: “Private bankers enjoy the friendly environment offered by the country in terms of safety, security provided by the government, stability and also skills.” Luxembourg represents a key platform for the Eurozone and is appreciated both for its international dimension and its safety. From Luc Leclere’s point of view, people are attracted by the international dimension because they look for expertise, specific topics they cannot find in their own countries. “We are in front of clients with high expectations due to or should I say thanks to tax transparency which brings extra competition. We have experiences here in Luxembourg and we have to carry on working on it.” Christian Borner also feels like there is a general trend making clients more critical and demanding; asking for more transparency. In this context, the advisory process, according to him, should become more sophisticated and aware of clients desires.
Benjamin Collette focused on the possibility to see a new wave of clients emerging so would a need to adapt and turn to new technologies to easily answer the demand for changes. Ivan Schoucker reacted, saying that we evolve in a much more self-defined segmentation and as a consequence, we should have the tools, business technologies to ensure services. He noted that, in his company, they do have a classic segmentation but they were moving towards a much more dynamic client base segmentation. “The data we collect allow to have what we call an Amazon approach; so basically, a client with a certain risk profile associated with data we collect, make the system able to present options of investments.” Technology remains a key issue within the sector. As raised by Luc Leclere, the real question is “how clients will consume the banks of tomorrow” and his fellow to agree that new technologies are essential. “What is your view of private banking in Luxembourg?” is the last question asked by the moderator to the four panellists and the different answers were quite optimistic. Luxembourg is a country with a strong position, ready for evolution and which benefits from good skilled people and good initiatives from the government. The final advice would be to maintain the reputation of the financial place and to strengthen the market and its expertise as well as carry on attracting other kind of businesses.
Talent Management: the new battlefield
The last debate of the day was composed of Claude Bacceli, Global Head of Financial Intermediaries Managing Director, Société Générale Bank & Trust; Jhon Mortensen, CEO, Nordea Bank as well as Roger H. Hartmann, Luc Leclere, Adrian Leuenberger and Serge Krancenblum (moderator) around the main topic Talent Management: the new battlefield.
This last debate dealt with skills needed in this new environment, addressing the war of talents and challenges faced by private bankers.
Private bankers must be polyvalent and have knowledge in taxation, regulations and accept to have the support of experts. Above all, they need to have a truly sense and focus on the clients. A reasoning underlined by Claude Bacceli for whom private bankers needs to generate a new mindset, be more like entrepreneurs, following clients and phases of growth. “It is all about customers’ satisfaction at the end. If customers are satisfied, the team is satisfied and it offers more business opportunities” added Luc Leclere. The difference between the role of the “old private banker” and what is expected from the new one is the way direction choses to manage transition. There is an obligation of management but also a social one. “The company has to be built together” summarizes up Luc Leclere. On the other hand, Jhon Mortensen emphasized the need to be coachy and to interact with people while Adrian Leuenberger talks about meritocracy which is not enough used.
Regarding recruitment, it is mainly based on new graduates from universities but also from competitors where the experience dominates. For Roger H. Hartmann, mobility talent is one of the main aspects to take under consideration now. The debate achieved on a quite interesting question stemming by the audience: “What is the recruitment rate in the private banking sector in Luxembourg?” Among the positive answers from each panellist revealing the creation of a lot of new commerce; Roger Hartmann said: at first, we were five employees at the Espirito Santo Group in Luxembourg, we are thirty today.”
Between panel discussions, workshops sessions were proposed and each attendee had the choice between topics ranging from "private banking" to life insurance through the regulatory aspects of the sector. Among the different companies and deep expertise offered, three of them have recorded a high rate of participation: Solutions for an easy future! presented by Anne Poirrier-Hamon, Head of Product strategy, BNP Paribas Investment Partners; Private Wealth Insurance and cross-borders scenarios by Francesco Bruno, Head of Business Development and Wealth Management, ING Life and Automatic exchange of information: secrecy vs. transparency developed by Me Donald Venkatapen, Avocat à la Cour and Me Cédric Schirrer, Avocat à la Cour, Wagener & Associés.
This event also gave many opportunities to meet and interact in a more informal way during networking sessions, where they discovered Cornercard and The Luxembourg Freeport booths while enjoying a coffee break or the closing cocktail.
AG2R La Mondiale – Amundi – Avaloq – BNP Paribas Investment Partners – CornèrCard – Crédit Agricole Private Banking Services – Deloitte – Ethenea – Fondation de Luxembourg – Gambit Financial Solutions – ING Life – The Luxembourg Freeport – Oddo Services – ORTEC Finance – Raise Partner – Skagen Funds – Sopra Banking Software – vwd group – Wagener & Associés
Agefi – Banking & Finance – Banque & Finance – bobsguide – CFO World – Chronicle.lu – Entreprises Magazine – Financial Bridges – Financial Places – GreenWorks – HR One – IT One – Marketers – PAM Insight
Rms.lu – Renault
FundsEvent – 3 April 2014