Eradicating profitable inefficiencies, adapting to the FinTech revolution and exploring alternative investments: PrivateBanker 2015 Highlights

Luxembourg - 27 March 2015

A gathering of the private banking industry’s major league took place on March 19 at the New Centre of Conference in Kirchberg for the 6th edition of PrivateBanker; an exclusive event dedicated to sharing good practices and industry knowledge. This year’s event focused on three key themes; CEOs Insight: how do we face costs and regulations issues?; New opportunities and strategies for a better customer experience; Unleashing the power of art and collectibles for PrivateBankers.

The future of private banking has been put into question lately, in the midst of a technological revolution, an increased pressure to respond to clients’ demands and a notable contrast between the approaches adapted when dealing with old High Net Worth clients and new High Net worth clients; Private Banks, wealth managers and family offices must adapt to these changes and tailor their value proposition.

As the president of the Luxembourg Family Office, CEO of SGG and an established personality from the Luxembourg financial industry, Serge Krancenblum is no stranger to this type of assembly. He opened stating that we are experiencing an open market with not only new clients but also a new kind of client. He noted that the future of Luxembourg depended on our ability to restructure our company culture; recruit new talents and train them to adapt to new regulations which, ultimately will benefit the financial centre of Luxembourg.

CEOs Insight: how do we face costs and regulations issues?

Hugo Weber, Publishing Director of Magazine Decideurs’ extensive industry knowledge combined with his intuitive journalistic flair added a lively dimension to the moderation of this notably technical panel which included Benoît Wtterwulghe, CEO of ABLV Bank, Robert Scharfe, CEO of Bourse de Luxembourg and Luc Verbeken, CEO of ING. The general consensus among the panellists was that EMIR and FATCA are the regulations that demand the most investment from banks. The fact that these regulations incur heavy costs was an opinion that echoed throughout this panel discussion.

However, Robert Sharfe, CEO of one of the most regulated institutions around contended this notion, claiming that regulations should not be fought against but instead used as a trigger to rethink your business for example, by offering administrative services such as FATCA reporting to investors. He expanded on this stating that private banks need to focus on their core competencies. This panel concluded with an overall agreement that MIFID2, which will focus on investor protection and market transparency would be a positive evolution aiding to eradicate longstanding profitable inefficiencies.

The second topic intended to discuss how new opportunities and strategies can improve the level and quality of service offered to clients. However in keeping with Bloomberg’s head of sales for Northern Europe, Edouard Leveque’s speech which largely covered the extent of solutions Bloomberg can offer to private bankers; the subject of digitalisation prevailed.

New opportunities and strategies for a better customer experience

A diverse panel of representatives from varied backgrounds with differing values led to a fairly conflicted debate. Baldwin Berges, a firm supporter of the technological revolution and founder of Business Development Insider moderated the panellists which included Venetia Lean, Member of the Board of Directors at Banque Havilland, Ariste Chiabotti, Managing Director of UBS, Fabrice Sauvignon, CEO of AG2R La Mondiale, Serge Krancenblum, Président of LAFO and Nicholas Hacking, Sales Director at ERI Bancaire.

Each topic reflected comparatively on new and old fashioned methods of wealth management. Venetia Lean represented a far more traditional form of private banking that tends to deal with an older generation of clients most of which are families; adopting a more personal approach with their clients by attributing more importance to fundamental values such as governance or education.

Nicholas Hacking avidly pioneered FinTech for private banking, however there was some debate as to whether it sometimes represents a barrier between the banker and their clients instead of being a helpful tool. It is an undeniable fact that the digital world is increasingly important but some banks but also their clients, are reluctant to adapt and adopt to these technological advances. Furthermore there is the underlying issue of users lacking the aptitude to maximise their use of these technologies. Although technology remained a primary focus, the panellists didn’t explore their visions of the future of banking in the face of the FinTech revolution.

In the afternoon, the focus shifted to the subject of art-finance and investment, a competence which is blossoming in Luxembourg, partly as a result of the opening of the Luxembourg Freeport; a maximum security storage facility exempt from import duty. This Freeport is the best facility in the world to date due to its ecosystem with Cargolux. As Managing Director, David Arendt’s introducing speech emphasised the total traceability guaranteed by the Freeport and outlined the additional range of services available aside from maximum security storage such as; art experts, insurance brokerage, advisors, etc.

Unleashing the power of art and collectibles for PrivateBankers

Alain Mestat, Executive Director of PassionProtect, which is housed within the Freeport joined David Arendt on stage, as the moderator of the final panel of the day along with Aude Lemogne, Director of Link Management which is also housed within the Freeport, Adriano Picinati di Torcello, Director, Art & Finance Coordinator at Deloitte, and Roman Kraussl, Art-finance, Private equity associate professor, University of Luxembourg.

The panellists broadly tackled this vast subject, outlining the many options available when investing in art and their varied outcomes. The panel emphasised that investment should not be the main driver, passion should be a key component in order to successfully develop this competence. 

The art market is primarily trend driven and although art funds are becoming popular, Aude Lemogne argued that the current fund structure does not adapt to the transient nature of art. Roman Kraussl, whose extensive research on art-finance has produced a number of evaluative indices, contended that the optimal structure has not yet been developed.

The high end market is very quick and can produce high returns although with an increased risk and volatile trends. Contrastingly in the lower priced market the risk is reduced but investors are required to hold the works for much longer periods of time, on average 10 or 15 years.

The panellists candidly agreed that Luxembourg is too small to ever become major centre for art, however there is a tangible competence to become a premier art and finance centre from a business point of view. To achieve this, addressing the lack of adequate value management is paramount, furthermore, the correlation between asset managers, private bankers and wealth management needs to be reinforced.

The conference also held six expert workshops given by Avaloq, BNP Paribas Investment Partners, La Mondiale Europartner, Gambit Financial, M&A Property Investors and Luxembourg School of Finance.

Participants took the opportunity to network, interact with clients and form new relationships during the coffee break, gourmet lunch and closing cocktail.

Event sponsors
Avaloq – BNP Paribas Investment Partners – Comarch S.A. – Ethenea – Eri Bancaire – Gambit Financial Solutions – IWI International Wealth Insurer – La Mondiale Europartner – M&A Property Investors – Petercam – Luxembourg School of Finance – Brainforge

Press partners
AMCHAM Luxembourg – AGEFI Luxembourg – ATEL– ACI Luxembourg – bobsguide – Bloomberg – Chronicle – Entreprises Magazine – Family Office Elite Magazine – Financial Bridges – Financial Places – Risk and Compliance – LG– Leaders League– LPEA – Kluwer

Event partners
Automotion– GreenWorks – HR One – IT One– Marketers – Renault

Next PrivateBanker will take place late March 2016 at the New Center of Conference, Kirchberg.

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