www.privatebankerinternational.com Issue 358 / july 2018 PRIVATE BANKER FAMILY FORTUNES MAKING A UHNW SUCCESSION PLAN COME TOGETHER FEATURE COUNTRY FOCUS TECHNOLOGY UHNWI HNW demand for tax Blockchain tech propels Rawinder Binning on advisory services in crypto assets into bypassing private banks Australia is growing mainstream PBI July 358.indd 1 11/07/2018 14:04:34 contents this month NEWS COVER STORY 05 / EDITORIAL VIEW 08 06 / NEWS ROUND-UP • Quilter completes single strategy fund business sale • Assets in UK wealth industry approach £1trn mark • Dispute over Rothschild family name resolved • BOC Hong Kong unveils wealth business hiring plans 07 / NEWS ANALYSIS • Blockchain tech propels crypto assets into the mainstream 07 UHNW SUCCESSION Editor: Group Editorial Director: Head of Subscriptions: Ronan McCaughey Ana Gyorkos Alex Aubrey +44 (0)20 7406 6540 +44 (0)20 7406 6707 +44 (0)20 3096 2603 [email protected] [email protected] [email protected] Correspondent: Sub-editor: Director of Events: Saloni Sardana Nick Midgley Ray Giddings +44 (0)20 7406 6627 +44 (0)161 359 5829 +44 (0)20 3096 2585 [email protected] [email protected] [email protected] Contributor: Publishing Assistant: Oliver Williams Mishelle Thurai +44 (0)20 7406 6592 [email protected] Customer Services: +44 (0)20 3096 2603 or +44 (0)20 3096 2636, [email protected] Financial News Publishing, 2012. 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London office: John Carpenter House, John Carpenter Street, London, EC4Y 0AN Asia office: 1 Finlayson Green, #09-01, Singapore 049246 Tel: +65 6383 4688, Fax: +65 6383 5433 Email: [email protected] twitter: linkedin: private banker PRIVATE BANKER @bankerNews international 2 | July 2018 | Private Banker International PBI July 358.indd 2 11/07/2018 14:04:40 contents july 2018 WEALTH MANAGEMENT FINTRACKER 16 / NORTHERN TRUST Northern Trust received two US patents in June 2018. The first was for using one- directional cryptographic hashes to log biometric client data, and the second was for recording meeting minutes 17 / HSBC In June 2018, HSBC launched a concierge service for members of Jade, the bank’s invitation-only non-financial benefits programme that provides access to luxury restaurants, entertainment and travel experiences 14 18 FEATURES COUNTRY FOCUS ANALYSIS 08 / UHNW SUCCESSION 14 / AUSTRALIA 18 / GLOBALDATA Succession planning is a key concern for the The majority of wealth managers in Australia With the concept of investment back into world’s growing UHNW population. PBI are missing an opportunity to service HNW society growing in importance among the benchmarks the succession-planning strategies demand for pension and tax planning, young and wealthy, millennials are poised of major private banks, and examines according to a recent report by GlobalData to drive a philantrophic boom, according to UHNW investment attitudes and needs Financial Services. Ronan McCaughey reports GlobalData Financial Services 11 / LOMBARD ODIER 19 / WEALTHINSIGHT Wealthinsight head Oliver Williams reviews Duncan MacIntyre, UK CEO at Lombard how MFOs are responding to generational Odier, talks to Ronan McCaughey about the and technological challenges. Like other areas Swiss private bank’s new My LO platform, its of the sector, MFOs increasingly recognise broader international strategy, and how the that they must adapt in order to flourish bank’s 222-year history benefits its clients NEWS 12 / UHNWI VIEW Co-founder of UK-based peer-to-peer lender 20 / TECHNOLOGY Kuflink, Rawinder Binning tells Saloni Sardana why he stopped using private 21 / REGULATORY NEWS banking – and why his family now prefer to manage their wealth internally 12 22 / PEOPLE MOVES www.privatebankerinternational.com | 3 PBI July 358.indd 3 11/07/2018 14:04:42 HEAR ∤ NETWORK ∤ DISCOVER ∤ CELEBRATE SHAPE THE FUTURE OF PRIVATE BANKING Private Banking & Wealth Management: Switzerland 2018 12th December 2018 ∤ Marriott, Zurich Private Banking & Wealth Management: Switzerland 2018 Conference and Awards leverages the expertise across the Verdict research and publishing portfolio, including Private Banker International, Wealth Insight and Wealth Intelligence Centre. The event is an opportunity to share ideas, discover trends and network with peers across the wealth industry. Key Issues : ∤ Economic trends to 2020. Wealth ∤ How should Switzerland’s private banking management industry performance industry define itself in the age of digital technology and intensifying competition? ∤ With technology playing an increasingly significant role in service delivery what ∤ What channels are working for attracting, benefit does institutional size confer? retaining and managing an increasingly diverse customer universe? ∤ What are the implications for service, delivery and product distribution in the ∤ What’s the connection between distribution age of the digital wealth manager? and profitability? How are Swiss private banks adapting to the challenge of tight ∤ How is technology enabling faster, more cost margins and higher costs? effective on-boarding, KYC and compliance reporting among wealth management ∤ What does the country need organisations? to do to stay ahead? Gold Partner: Silver Partner: Bronze Partners: Exhibitor: Supported by For more details please contact: Page 1 Vicki Greenwood on [email protected] or call +44 (0) 20 3096 2580 PBI July 358.indd 4 11/07/2018 14:04:42 editorial view making a success of succession Saloni Sardana, Correspondent or any private banker, succession planning Aside from succession planning, this month’s issue is about working with the children of their profiles the multimillionaire founder of UK-based peer- F wealthy clients to ensure a successful and to-peer lender Kuflink, to gain an insight into the world of effective intergenerational transfer of wealth. private banking through the eyes of a millionaire. This makes sense, as the UHNW community is Despite being an UHNWI, Binning chooses to manage expected to transfer about £4trn over the next decade, his wealth internally within the family, as he considers and since a lot of this wealth is self-made, this is leading private banking fees to be unnecessarily high for the to many dealing UHNW clients with succession issues for services on offer. the first time. Binning argues: “With private banking and execution But succession planning is not just about transferring only, the bank was taking a huge percentage of the trade. money. It is also about preserving and continuing each Since you can now pay approximately $16 or $20 online family’s unique culture and values. on a simple platform to get the same trade, why not just As Mark McMullen from family office Stonehage do it yourself?” Fleming points out, succession planning best practice This successful UHNWI makes an important point. begins by identifying these values. McMullen comments: With the growth of digital wealth platforms and DIY “Despite all family cultures being different, there is a investing, private banks and wealth managers need to ask common theme that rests on the belief that culture brings themselves what value they are adding? the family together to identify common values.” In today’s financial environment, savvy customers will Wealth managers should engage the next generation quickly dispense of wealth managers for an alternative by specifically devising programmes intended to capture solution. a family’s unique culture from generation to generation. Finally, this month also profiles the Australian wealth What is the point of wealth flowing in the right direction management sector. This shows that demand among with no remnant of the values unique to the family Australian HNW investors is particularly pronounced for business that created the wealth? That would amount to pension and tax planning thanks to the government’s a poor succession, where the money has continued but changes to the superannuation system, which came into the strategy ceased to exist. effect in mid-2017. < Get in touch with the editor at: [email protected] www.privatebankerinternational.com | 5 PBI July 358.indd 5 11/07/2018 14:04:43 News | Round-up round-up Quilter completes single Wealth managers also achieved £104bn BOC Hong Kong unveils wealth strategy fund business sale of assets inflows in 2017, with collective- based investments representing 40.7% of business hiring plans Quilter, previously Old Mutual Wealth, has all assets. completed the sale of its single strategy arm to James Brown, head of client services the division’s management team, led by CEO at Compeer said: “This move towards Richard Buxton, and private equity firm TA collective-based investments suggests Associates. The deal is worth £583m ($768m). further caution in investment decisions, The deal consideration includes an up-front which is to be expected in light of cash payment of £576m, and a deferred the uncertainty surrounding