PRIVATE BANKER

June 2017 Issue 345 www.privatebankerinternational.com Leaders of the pack

Who holds the winning hand in global wealth management?

• The blockchain’s use in wealth management • Interview: HSBC Canada • Overview: PBI London Conference & Awards 2017 • Country survey: South Africa

PBI 345.indd 1 10/07/2017 10:31:55 Intelligent Environments, the international provider of digital  nancial services solutions in association with Retail Banker International, Cards International, Electronic Payments International, Private Banker International, and Motor Finance publications

Join thousands of  nancial services professionals who have joined The Digital Banking Club to understand the future of mobile and online  nancial services

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PBI 345.indd 2 10/07/2017 10:31:56 TDBC Adverts - 2017.indd 1 21/12/2016 09:52:29 Private Banker International EDITOR’S LETTER

CONTENTS

NEWS A love song for June... and Intelligent Environments, 2: NEWS DIGEST hybrid models 3: NEWS ANALYSIS the international provider 15: PBI LONDON AWARDS 2017 of digital  nancial services 16: TECHNOLOGY ROUND-UP he month of June is always a busy one banking and investment services. 17: REGULATION ROUND-UP for us at Private Banker International. The platform has one fee and one trans- It is the month for two of our most action charge, and would be free from com- 18: PBI GREATER CHINA AWARDS solutions in association with awaited annual awards - one in Hong mon charges including exit fees, reinvesting 19: PEOPLE MOVES T dividends and probate valuations. It has no Kong and the other in London (find out more Retail Banker International, 20: PBI GLOBAL AWARDS about the winners on pages 15 and 18). minimum investment amount. Of course this is also the month for the PBI Swiss private banking giant, UBS launched ANALYSIS London conference - the all-day event that SmartWealth earlier in 2017 via which peo- Cards International, Electronic takes place on the same day as the London ple with investable assets of GBP15,000 can 8: PEAK DIGITAL IN WEALTH MANAGEMENT awards - and is packed with debate and dis- become customers. Even though usage fees Payments International, Private The prevailing theme at the recent annual cussions (more about that from pages 11 to are high, this is a drastic departure from their PBI London Conference and Awards was, yet 14). This year, the London conference and $1m in investable assets entry point so far. again, technology. However, other fields awards took place on the day of the UK In early April, Coutts launched Coutts Banker International, and have found that digital’s reach may be finite, writes WealthInsight’s Oliver Williams general elections, adding to the day’s drama Invest, an online investment platform, that Motor Finance publications (more about that on page 3). allows access to a suite of five passive risk- COUNTRY SURVEY What I love about the awards - going rated portfolios. The service enables clients through all the shortlisted nominations - as to invest with an initial lump sum, starting 10: SOUTH AFRICA well as the day of the conference itself is to as low as £500. South Africa is set to experience a strong hear from key industry participants about the Charles Schwab in the US has its new rise in demand for professional wealth most interesting and innovative products and hybrid offering, Schwab Intelligent Advisory, management. However, pension and financial planning services will be the most services that they have launched in the last 12 combining advice from financial advisers popular. Vania Goncalves finds out more months, the changes they have gone through with online advice to target mass affluent Join thousands of  nancial and the challenges they have conquered. investors. The service requires minimum FEATURE While the award nominations themselves investment of $25,000, and offers clients a services professionals who provide these insights on paper, the confer- customised financial plan and ongoing live 4,5: BLOCKCHAIN ence gives way to conversations around these advice from certified financial planners, as Given its potential to both disrupt and key developments that are both enriching well as an automated portfolio at a low cost. enhance processes and systems, there is have joined The Digital undoubtedly growing interest among wealth and educational. These platforms are steps in the right managers in using blockchain. Industry This year, the one aspect that emerged direction. With competition between banks to understand experts talk to Robin Arnfield about where as a clear point of focus at the conference getting tougher and profit margins being Banking Club the attraction and potential use cases lie and among the award winners in Asia and squeezed, private banks need to evolve 6,7: TOP 25 PRIVATE WEALTH MANAGERS Europe was the importance of ‘hybrid’ busi- according to market and client demands to the future of mobile and online The world’s 25 largest private wealth ness models. The conversations seem to have gain more wallet share. managers grew their AuM by 5.5% in 2016, strongly shifted from ‘how can we stop fin- Ultimately, hybrid models are about com- according to new research by Private Banker tech firms from eating our lunch’ to ‘how can bining the best of both worlds, giving clients  nancial services International and GlobalData. PBI can now reveal who the top global players are, and we collaborate to offer something new, easy more choice and enriching those valued rela- looks at what they are doing right and cost-effective for the clients’. tionships. And from what all the PBI events We have seen this in practice as well. It has in June have highlighted, hybrid models are 9: INTERVIEW: HSBC CANADA been a year since UK-headquartered Barclays certainly feeling the love from private banks, Canada’s private wealth management market launched a new integrated online direct fintech firms and customers alike. is a major opportunity, and HSBC is aiming to Meghna Mukerjee double its Canadian private client business. investing platform combining its online [email protected] Robin Arnfield speaks to Nader Guirguis, Join The Club! Membership bene ts CEO, HSBC Private Wealth Services (Canada) 11-14: PBI LONDON CONFERENCE 2017 www.thedigitalbankingclub.com The fourth annual Private Banker 10% discount for new subscribers/purchasers on: International London Conference 2017 on 8 June brought together professionals and Annual subscription to Private Banker International experts from the private banking and wealth @TheDBclub management industry to discuss key issues and themes that are influencing, shaping, World Market Intelligence’s archive of over 250 and impacting the sector. Vania Goncalves Follow Private Banker International reports back with an overview of the day Membership is free Private Banking research reports Delegate places for the Private Banker International Or Search for ‘Private Banker International Search for @BankerNews – Timetric Financial Services’ For more information please email: Conference being held on the 8th June in London [email protected] Subscription to WealthInsight Intelligence database www.privatebankerinternational.com June 2017 y 1

PBI 345.indd 1 10/07/2017 10:31:57 TDBC Adverts - 2017.indd 1 21/12/2016 09:52:29 Private Banker International NEWS DIGEST

Schroders launches US-focused “Our pioneering work in the European are very pleased to announce this establish- wealth management business investment-grade space means that we bring ment in Brittany, which marks our desire to significant knowledge and experience to our strengthen the proximity with our customers Schroders has unveiled a new London-based fund management,” Pacquement said. and the acceleration of our growth in France wealth management business that will target by an investment effort in the region.” high net worth US clients living in the UK Breakaway UBS team launches and North America. The new unit, Schroders independent advisory business Indosuez in talks to buy CIC’s Wealth Management (US), will sit alongside the private banking activities fund manager’s UK wealth management arm, Indosuez Wealth Management, the private Cazenove Capital. banking unit of French banking group Crédit Schroders said the new business will focus Agricole, has started exclusive negotiations on internationally minded US investors, and to acquire the Singapore and Hong Kong pri- will help it to cater more effectively to US expa- vate banking operations of Crédit Industriel triates living in the UK. A third-party custodian et Commercial (CIC). will offer banking and custody services. Indosuez said the deal aligns with its plan The team at Schroders’ new operation will to speed up growth in key markets, as part of be led by Martin Heale, who will take the new A team of advisors has broken away from its Shaping Indosuez 2020 project. role in August 2017. Heale joins from RBC, UBS to launch an independent financial advi- Indosuez CEO Paul de Leusse said: where he was MD in the Americas private sory firm and joined the Dynasty Financial “Together we would strengthen our geo - wealth team. His other previous roles include Partners network. graphical footprint and our commercial head of private wealth management at Klein- The new business, Procyon Partners, is based offering whilst maintaining the highest com- wort Benson, and UK team head at Barclays in Connecticut and employs 10 staff. It was pliance standards. Private Bank. launched by Phil Fiore, Jeff Farrar, Lou Gloria, “Our financial knowledge of Asia, our Mary-Anne Daly will be CEO of the new Tom Gahan and Chris Foster, who were previ- efficient logistic platform and the strength business, in addition to her responsibilities as ously partners at the FDG Group at UBS. The of a large group enable us to provide tailor- CEO at Cazenove Capital. team formerly oversaw over $8bn in institu- made solutions to families and entrepreneurs “We have a long experience of managing US tional assets and over $400m in private assets whose needs are becoming increasingly clients resident in the UK, and are fully famil- on a non-discretionary and discretionary basis. sophisticated.” iar with their complex investment and report- Procyon will now operate under two Regis- The deal is expected to complete by the ing requirements. The recruitment of such an tered Investment Advisors – one for investment end of 2017, subject to regulatory approvals. experienced individual as Martin reinforces consulting practice and the other for personal Indosuez expects the deal to have a negative our commitment to serving US clients, includ- wealth management group. effect below two basis points on the common ing those living in the US,” Daly noted. “As a team with vast experience in partnering equity tier-one ratio of Crédit Agricole SA with institutions and high net worth families, and Crédit Agricole Group. Wells Fargo launches new we are pleased to launch Procyon Partners. investment-grade credit fund “We are positioning our new wealth manage- REYL Group forms partnership Wells Fargo Asset Management has ment firm for future growth, and have formed to move into art lending announced the launch of a new UCITS- our firm to better align our services with the Swiss financial services group REYL Group compliant investment-grade credit fund for ever-evolving needs of our clients,” Fiore noted. has joined with art advisory business Link institutional and retail investors. Dynasty will offer analytics and operational Management to launch Griffin Art Partners, The Luxembourg-domiciled EUR Invest- support for the business. a Luxembourg-based securitisation platform ment Grade Credit Fund is a sub-fund of the focused on art lending. Wells Fargo (Lux) Worldwide Fund, and will Bordier & Cie opens new offices Griffin will offer one-to-three-year loans have over €100m ($114m) in assets at launch. in coastal Brittany against artwork for a minimum amount It will combine fundamental credit Swiss private bank Bordier & Cie has of €1m; in exchange, borrowers will be research and top-down allocation decisions expanded its presence in France by opening required to store the artwork with a third- to help investors gain access to European new offices in Brest and Rennes. party depository or a free port. investment-grade credit, and will target high- The launch of the new offices on France’s Artwork covered by the platform may er returns than those provided by the govern- west coast is part of Bordier & Cie (France)’s range from old masters to contemporary art, ment bond market. strategy to provide personalised asset man- and will need to comply with strict eligibility As well as Luxembourg, it will also be agement, and legal and tax advice to clients. criteria, REYL said. available in France, Spain, Switzerland, Aus- The bank has hired Bernard Bergot from The platform will be available in jurisdic- tria, Finland, Sweden, Norway, the Nether- Luxembourg private bank KBL Richelieu to tions including Switzerland, Luxembourg lands, Germany, Ireland, Italy and the UK. lead its Brest office. He will also be responsi- and the UK. REYL Private Office (Luxem- The fund will be managed by Henrietta ble for the wider Brittany region. Bergot pre- bourg) will be responsible for managing the Pacquement and Alex Temple of ECM Asset viously also worked at CIC Banque Privée platform, and will also serve as bondholder Management, which will act as sub-adviser and Crédit Agricole in Finistère. representative. to the fund. The Rennes office will be led by Philippe Link Management director Aymeric Thu- “We see extensive opportunities in the cur- Le Guernevé, who is also joining the firm ault said: “Griffin Art Partners endeavours rent climate of European credit markets, and from KBL Richelieu. He will also become to become one of the leading independent art believe ECM’s seasoned team is well posi- deputy director of the Brittany region. lenders in Europe by offering a competitive tioned to generate risk-adjusted returns for Commenting on the move, Bordier & Cie and flexible non-recourse financing solution our investors. (France) MD Christophe Burtin, said: “We for art professionals and collectors.”<

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PBI 345.indd 2 10/07/2017 10:32:00 Private Banker International ANALYSIS NEWS

Come what May? Wealth managers react to “unexpected” outcome of UK election The UK general election result announced on the morning of 9 June 2017 leading to a hung government has been deemed market unfriendly, as the sterling has weakened and volatility is hitting the financial markets. Wealth managers give PBI their initial reactions

he UK general election results leading pension funds due to current legislation; any tions, between North and South and between to a hung parliament are not as the change to this could put pressure on linkers. the urban and rural areas.” markets expected. The Conservative We prefer Japanese and European linkers. Caroline Simmons, deputy head UK party secured 318 seats, while the “We like European equities — without a investment office at UBS Wealth Manage- T specific bias to the UK market — and we pre- Labour party got 261 in the 8 June gen - ment added: “Given the lack of clarity on eral elections. Prime Minister Theresa May fer European and Japanese equities to the US, domestic policy and the impact on the Brexit is forming a government with the help of as we expect the boost from reflation poli- negotiations, we expect sterling to remain Northern Ireland’s Democratic Unionist cies could have more upside in these markets, soft. This should remain supportive of the Party (DUM) despite many in the Labour where valuations are more appealing.” equity market, under a Conservative minor- and Conservative camps calling for her res- Jason Hollands, managing director of ity outcome. ignation. investment management group Tilney, said “However, should the market focus on con- This ‘Tory defeat’ has brought more uncer- that this result is “a market unfriendly out- cerns that a Conservative minority won’t last tainty to the British political sphere causing come”. Hollands said: “Large FTSE 100 and that we may end up with a Labour-led the pound to suffer by 2%, initially, against companies are of course highly sensitive to parliament, then the currency related boost the euro (EUR) and the dollar (USD). movements in the exchange rate because in will be offset by concerns over the potential Several players in the wealth management aggregate over 70% of their earnings are for increased corporate tax rates and nation- industry agree that there are unpredictable derived outside of the UK. Therefore, the alisations of certain industries.” times ahead. Bill Street, head of investment reaction from the FTSE 100 may largely In contrast, Christoph Riniker, head of for EMEA at State Street Global Advisors – reflect this rather than a direct verdict on the equity strategy research at Swiss private part of asset manager State Street Corpora- policy implications or the read across to the banking group Julius Baer, thinks that this tion, said: “While sterling weakened in the outlook for the domestic economy. outcome could have a positive impact on final weeks of the election campaign, mar- “Investors will be scratching their heads to international stocks. kets still expected a Conservative majority, game out whether the central scenario of a “The election results do not exactly reflect thus this initial sterling weakness is no sur- fragile, minority Conservative government the expectations encouraged by the polls. It prise and is likely to continue as international makes a “hard” or “soft” Brexit more likely. is fair to say that the political uncertainty in investors demand a higher risk premium. “The key space to watch for market reac- the UK is rising again and thus might have “Sterling is already substantially under- tion will be the more domestically orientated implications for financial investments. The valued against the USD and EUR, reflecting companies which are typically found within pound could weaken again, which in theory future uncertainties. Such under-valuations in the FTSE 250 and smaller end of the mar- should have a positive impact on internation- do tend to correct over long time horizons ket. These bore the brunt of negative reac- ally-oriented UK stocks. While a clear major- and it is possible the election result will lead tion in the initial aftermath of the Brexit ref- ity in parliament would have had signalling to a softer Brexit. However, any move higher erendum and there could be renewed anxiety effects, the upcoming hung parliament does is likely to be delayed until there is certainty.” though this may be tempered by the reduced less so. We stick to our neutral stance for the Street expects the initial risk-off market threat of corporation tax rises implied.” time being and reiterate our preference for reaction will drive gilt yields sharply lower. Overall, geopolitical risk could weigh on the internationally oriented FTSE 100 over “Over the short term, we believe that this financial assets, triggering volatility, says the domestic FTSE 250.” move will continue as political uncertainty Defend. “The recent escalation of terror- Nigel Green, founder and CEO of finan- reigns supreme. However, the emergence of ist attacks means that voters’ reactions and cial consultancy firm deVere Group, believes a Labour-led coalition could trigger a bear- politicians’ actions are less predictable. We that this result will unleash mayhem across ish environment for gilt yields. As the market seek to manage potential spikes in volatility global financial markets, but sees some prices in campaign promises of fiscal stimu- with hedging strategies and assets perceived opportunities ahead. lus and a softer-Brexit, we believe that gilt as safe-haven, such as gold.” “Volatility can bring considerable opportu- yields could be on course for a sustained Mark Phelps, AB global concentrated nities and investors should avoid knee jerk upward move over the medium term.” growth portfolio manager, added: “It seems reactions at this time.” Green adds, however, Monica Defend, head of global asset allo- likely that the bond and equity markets will that UK election result is a “hammer blow” cation research at investment firm Pioneer see greater volatility, but outside of the politi- for a hard Brexit. “The financial markets Investments, said that they “do not consider cal establishment, the result will probably be had almost already priced-in a hard Brexit sterling to be attractive”. seen as confusing, but not necessarily chang- and will now have to quickly reassess their “We consider the inflation linked bond ing a great deal. position. As this adjustment takes place we market to be too dear, as it strongly benefits “What is clear is that UK is divided, not can expect the uncertainty in the markets not from the demand of local defined benefit only over Brexit but also between the genera- only to continue but to intensify.” <

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PBI 345.indd 3 10/07/2017 10:32:00 Private Banker International FEATURE BLOCKCHAIN

Is blockchain set to make an ‘immutable’ mark in wealth management? Given the blockchain’s potential to both disrupt and enhance processes and systems, there is undoubtedly growing interest among wealth management firms in using the blockchain to improve customer experience and cut inefficiencies. Industry experts talk toRobin Arnfield about where blockchain’s attraction and potential use-cases lie

entral market infrastructure providers needs, Northern Trust’s blockchain imple- analysing opportunities the blockchain could have demonstrated that blockchain mentation will serve additional private equi- bring to their business, including bitcoin inte- models and technology work. Now ty clients over time. Northern Trust will con- gration, shared know your customer (KYC) wealth managers and private banks trol who is permissioned and for what access. duties, and pension funds. C The use of broadcast channels will distribute Arushi Srivastava, senior director, Digital are getting more interested in engaging with the blockchain. ledger information to the nodes that are per- and Cloud Services at NTT Data says: “We Wealth managers and private banks are missioned to receive it. have US wealth management clients who are increasingly keen on identifying the best use- “This planned solution will replace manual trying out initial use cases for blockchain in cases for blockchain, according to industry processes, not a system, but will modify how asset management.” experts. the private equity life cycle occurs for the Annabel Spring, group executive, wealth Javier Paz, senior analyst at Aite Group, various participants, while adding yet-to-be- management at the Commonwealth Bank of says:“Several of Aite Group’s wealth man- disclosed extensibility benefits.” Australia (CBA), told the 2017 APAC Block- agement clients are interested in learning Steve Webb, PwC’s Partner for Banking chain Conference in Sydney that the block- more about the blockchain, without dis - and Capital Markets Consulting, says several chain’s potential is “enormous” and CBA is closing names. They are looking at the blockchain initiatives have been announced “experimenting with it every day”. blockchain purely for efficiency reasons around fund management distribution plat- “We’re looking at where the manual pro- rather than for strategic opportunities. For forms. “For example, BNP Paribas Securities cesses are, where multiple hand-offs are, and them, the blockchain is for practical imple- Services has teamed with Axa Investment where the siloed data that requires reconcili- mentations to reduce their overheads, and Managers to develop a blockchain-based ations, exists. We are testing the benefits of end users would never know they are using fund distribution platform to improve infor- making immutable transactions transparent; blockchain behind the scenes.” mation flow between fund buyers and sellers.” of digitally connecting and automating trans- Some interesting initiatives have already The global funds transaction network actions between counterparties; of creating emerged, one being Northern Trust’s devel- Calastone announced, in mid-June, the suc- a single source of truth to alleviate the pain opment with IBM of blockchain, or distrib- cessful completion of the first phase of its dis- of inter-organisation processes and counter- uted ledger technology, for the private equity tributed market infrastructure proof-of-con- party risk. market. The technology is initially being cept to test the feasibility of using blockchain “We’re exploring how this could play out in used to manage the administration of a pri- to develop a common global marketplace for terms of removing inefficiencies and risk for vate equity fund run by Swiss asset-manage- the trading and settlement of mutual funds. all participants in the global wealth manage- ment business Unigestion. In April 2017, Broadridge Financial Solu- ment marketplace.” Paz, who has authored several in-depth tions, JP Morgan, Northern Trust and Banco reports about various aspects of blockchain Santander completed a blockchain pilot to KYC and identity management in wealth management, wrote in a blog: enhance global proxy vote transparency and According to Brian Lincoln, IBM’s Wealth “Northern Trust carries out administrative analytics. “The blockchain helps solve the Management Solutions Lead, there is huge functions for multiple private equity funds. difficulty of people participating in proxy interest in being able to improve the whole These have unique life-cycles, complicated voting,” says Paz. process around KYC and identity verifica- structures, and documents and ‘artifacts’ In the US, John Hancock Financial’s tion, “as these can be painful for HNWIs and exchanged by parties using unique rules Laboratory of Forward Thinking is testing UHNWIs”. and permissions. The manual nature of this the blockchain for on-boarding new wealth Keith Bear, VP, Global Financial Markets administrative work imposes time delays and management clients with ConsenSys and at IBM, agrees, saying: “We have been see- a variety of costs to all parties… Blockapps. ing activity in KYC blockchain implemen- “While custom-built to serve Unigestion’s A growing number of private banks are tations in the sell-side, and there’s potential

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PBI 345.indd 4 10/07/2017 10:32:05 Private Banker International BLOCKCHAIN FEATURE

n n TOP FIVE USE CASES FOR THE BLOCKCHAIN IN WEALTH MANAGEMENT WHICH MILESTONES MUST BLOCKCHAIN PASS BEFORE BROAD ADOPTION WOULD BE POSSIBLE AT YOUR ORGANISATION? 1 Shared reference data sources Technology standards 70% 2 Regulatory reporting Technology standards 30% 3 Collateral asset tracking across sources and uses Interoperability with legacy systems 60% Successful proof of concept 30% 4 Automatic execution of margin calls at central counterparties Demonstrated ability to handle volume, resiliency, etc. 80% Security 50% 5 Legacy infrastructure integration and decommissioning

Source: Arushi Srivastava, Senior Director, Digital and Cloud Services NTT Data Source: 2016 EY Blockchain Capital Markets Roundtable

for wealth managers and private bankers to access the data directly. Likewise, block - The blockchain is a technology that we are implement the blockchain for KYC and iden- chain-based smart contracts could serve as looking at very closely.” tity management.” a starting point for new types of products, Will Trout, Celent’s head of wealth man- such as ETF-like baskets of stocks built off Assets agenda agement research, says there is a lot happen- smart contracts. But this is at least a decade With the blockchain creating the ‘Internet ing in terms of blockchain-based identity away,” he adds. of Value’, Meyer says the increasing develop- verification. The UK’s Everledger, for exam- ment of digital assets across most industries ple, is using blockchain to register diamonds. Attraction of blockchain can be expected. “We see proof-of-owner- “This process can be quickly extended to The central market infrastructure providers, ship blockchain systems being created for human beings with biometrics registered on for instance the exchanges, the Central Secu- assets such as diamonds, real-estate, and the blockchain, but it needs to be accepted by rities Depositories, and the Depository Trust cars,” he says. the various bank blockchain consortia, such & Clearing Corp., have taken the first moves “As the blockchain evolved from bitcoin, as R3, as an acceptable verification method,” with the blockchain in financial services. A regulators have been hesitant to support the he notes. key reason for this is that the blockchain is a blockchain. But they have now understood Client-onboarding – a notoriously cumber- way to do things at lower cost, for example that the blockchain brings the transparency some area for private banks – could benefit in credit default swaps, or to facilitate new they require, in particular for OTC transac- from the blockchain. Philippe Meyer, manag- business models. tions. We expect that regulators will become ing director of private banking software firm Steve Krieger, Pictet Group’s project direc- core stakeholders in the development of dis- Avaloq’s Edinburgh-based R&D centre, says: tor, says blockchain’s promise of faster, cost- tributed ledger technologies going forward.” “On-boarding clients is increasingly expen- efficient transactions with a reduced risk of As has already been demonstrated by sive and most customers have multiple banks errors attracts private banks’ attention. Northern Trust and IBM’s initiative, to name to reduce their counterparty risk. Sharing the “For us, fund distribution and OTC securi- one, private equity also “lends itself very well on-boarding KYC data between banks could ties transactions provide attractive use-cases. to the blockchain”, says Lincoln. help limit costs. The biggest advantage the While still at an explanatory stage, we’re par- “There is a lot of complexity in private blockchain brings is eliminating the need for ticipating in consortia to develop joint proto- equity with a lot of entities involved, and reconciliation. As everyone shares the same types for fund distribution, and have started it’s an inefficient process with a poor user information, there is no need any more to to experiment on small internal prototypes in experience. From a risk/audit perspective, reconcile the different transaction databases.” the OTC space to get first-hand experience. there tends to be regulatory concerns about Blockchain provides immutability, which “Agreeing on common standards for dif- whether the institution is selling to accred- is interesting for proof-of-ownership or for ferent institutions involved in the ecosystem ited investors. KYC data, says Meyer. takes time, and there is little clarity on many “It also needs to demonstrate it has robust However, the challenge is to bring all business cases related to the blockchain. We processes that ensure all the necessary docu- the participants onto the same architec - expect that clear business cases will emerge ments were on file in advance of the client ture. “The blockchain makes full sense when in the near future on specific use-cases, which subscribing to the private equity and that it shared among a number of participants, will accelerate developments,” he says. provided the appropriate disclosures. These aligning them onto the same infrastructure Chris Owen, vice president, blockchain concerns are addressed by the blockchain,” will be challenging,” he adds. at Canada’s TD Bank Group, says part of says Lincoln. Lincoln says that, for regulatory reasons, blockchain’s appeal is its ability to settle There is no doubt that now is the time to using the blockchain for KYC/identity verifi- transactions in seconds or minutes automati- think about the blockchain’s place in wealth cation internally within a bank is much easier cally via computers. “It is a potentially more management. “Firms also realise that, if they than across multiple banks. “For example, secure settlement process than what is used are looking to invest in their core systems when an existing retail banking client has today among financial institutions, where now, they should be factoring in the block- an opportunity to upgrade to private bank- clearing houses and other third-parties vali- chain,” adds Lincoln. ing, the blockchain could be used to leverage date accounts and identities over a few days.” Private banks and wealth managers information that has already been captured However, there are still tough challenges are certainly not ignoring this technology, and streamline the on-boarding process.” to work through, including technological, though many have been taking the ‘wait and Longer term, Trout sees huge opportuni- business and political aspects, says Owen. watch’ approach so far.” However, as CBA’s ties for end clients for blockchain-based self- “As it pertains specifically to TD’s Wealth Spring said at the conference in Sydney: “It service analytics and reporting data ‘on the business, we’re currently conducting a review is in wealth management where we can really fly’. “Since they would not rely on intermedi- of those processes that would be most posi- make transformational change by simplify- aries to provide these functions, they would tively impacted using blockchain technology. ing the complexity.” <

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PBI 345.indd 5 10/07/2017 10:32:06 Private Banker International FEATURE TOP 25 PRIVATE WEALTH MANAGERS

Aces high: The world’s top 25 private wealth managers ranked

The world’s 25 largest private wealth managers grew their AuM by 5.5% in 2016, as compared to a growth rate of 2.9% in the previous year, according to new research by GlobalData and Private Banker International. PBI reveals who these top global players are, and delves into what they are doing right

t a time when profit margins are Citi Private Bank ($389bn) slipped one Andrew Haslip, GlobalData’s finan - being squeezed and private banks position, landing in seventh place while cial head of content for Asia-Pacific, said: are struggling with a low-interest- Goldman Sachs ($413bn) jumped up by one “Despite a smaller footprint on the mainland, rate environment, the results from rank to sixth. China Merchants Bank’s focus on helping A Bartosz Golba, GlobalData’s head of con- the Global Private Wealth Managers AuM affluent Chinese internationalise their wealth Ranking reveal that there is still reason to be tent for wealth management, predicts that the has fuelled its growth. optimistic. two US giants might switch places next year. “The 2017 expansion of its private bank The research project undertaken by “While Bank of America’s AuM decreased for in Singapore still needs to be seen through GlobalData Financial Services and Private the second consecutive year, Morgan Stanley the lens of its mainland strategy, giving its Banker International reveals that assets recorded double-digit growth,” he says. Chinese clients more options in Asia’s private under management (AuM) for the world’s “Growth was even faster in the division wealth management capital.” 25 largest private wealth managers grew by catering for high net worth (HNW) individu- Other Chinese banks such as Bank of 5.5% in 2016, in comparison to a growth als at Goldman Sachs, which overtook Citi China (BOC) demonstrated strong perfor- rate of 2.9% in 2015. Private Bank.” mance by solidifying it’s place in the top 20 The 2016 Global Private Wealth Managers , taking 19th position ($143.99bn in AuM), AuM Ranking revealed some usual winners Big winners and losers with a three-place jump. alongside some unexpected movers. Swiss Some banks made notable jumps upwards RBC Wealth Management experienced a private banking giant UBS continued to head through the ranking. strong move up through the ranks – five-plac- up the list, with AuM exceeding $2trn. China Merchants Bank missed out on the es – to reach 21st position with $139.92bn in There was no movement among the first top 10, with an AuM of $238.96bn at the AuM at the end of 2016. five positions on the list from last year’s end of 2016, but landed in 11th place. This On the other hand, although the industry ranking, with US-headquartered Bank of is move up three places in the ranking from registered an overall growth in 2016, some America Merrill Lynch ($886.15bn) and the previous year’s list. players saw their asset books shrink remark- Morgan Stanley ($877bn) taking second and With an exemplary focused growth strat- ably, with HSBC Private Bank and Deutsche third position respectively. egy, China Merchants Bank lead the Chinese Bank Wealth Management not even present Credit Suisse ($719bn) and JP Morgan Pri- market, even though it ranked well behind in the top 10 ranking. vate Bank ($435bn) also stood firm in their the top five in the domestic retail banking Deutsche Bank Wealth Management fourth and fifth positions. market, according to the research. slipped four places, reaching 13th place in

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PBI 345.indd 6 10/07/2017 10:32:08 Private Banker International TOP 25 PRIVATE WEALTH MANAGERS FEATURE

n 2016 GLOBAL PRIVATE WEALTH MANAGERS AUM RANKING Methodology Rank Competitor AUM ($bn) 2015–16 rank change • The ranking captures the AuM of private 1 UBS 2,069.41 = banking and wealth management operations of the world’s leading competitors. The data was 2 Bank of America Merrill Lynch 886.15 = collected from competitors’ publicly available 3 Morgan Stanley 877 = materials, such as annual reports and financial 4 Credit Suisse 719.05 = statements, or from contacts in relevant organizations. 5 JP Morgan 435 = 6 Goldman Sachs 413 1 • The definition of AuM differs between wealth managers. To ensure figures are comparable, 7 Citi Private Bank 389.7 -1 the data underwent a standardisation process, 8 BNP Paribas 361.98 = with the aim of capturing assets held with a 9 Julius Baer 323.77 1 provider for investment purposes by private clients, under the beneficial ownership of the 10 Northern Trust 248.4 2 client. 11 China Merchants Bank 238.96 3 • Figures exclude assets held only in custody, as 12 Wells Fargo 231 1 well as pure asset management operations. 13 Deutsche Bank Wealth Management 227.29 -4 Where no detailed breakdown of AuM was 14 HSBC Private Bank 222 -3 provided by a competitor, a model was used to estimate the most accurate data. 15 Santander 192.2 1 16 Pictet 180.5 1 • The AuM data was collected in competitors’ reporting currencies. Where this is not US 17 ABN Amro 178.34 -2 dollars, data was converted using the 2016 end- 18 ICBC 174.23 = year exchange rate. 19 Bank of China 143.99 3 • Rankings and data from the previous years are 20 Crédit Agricole 143.84 -1 available from GlobalData and Private Banker 21 RBC Wealth Management 139.92 5 International. 22 J Safra Sarasin 131.55 -2 • GlobalData’s Wealth Management Competitor 23 Bank of Montreal 126.2 1 Analytics is an interactive tool that benchmarks the AuM and financial performance of 33 24 Société Générale 122.06 -3 leading global wealth managers. It is available 25 Lombard Odier 116.74 -2 to subscribers to GlobalData’s Financial Services Source: GlobalData’s Wealth Management Competitor Analytics Intelligence Center.

the most recent ranking. The business has Asia-headquartered private banks have been 2016 and will see more in 2017, is where we been through numerous changes in the last consistently making international inroads by expect new top international wealth manag- couple of years. A fundamental restruc - launching new offices in Europe and taking ers to emerge. ture of its business units and management inorganic growth routes. “Banks such as DBS Private Bank and that took place in October 2015 came into Meghna Mukerjee, editor of Private OCBC’s Bank of Singapore, which have been effect in January 2016, leading to the bank’s Banker International, said: “The Asia-Pacif- bulking up significantly through acquisitions, wealth management division currently sitting ic region, which saw much M&A activity in are the ones to watch in the future.” < within the Private, Wealth and Commercial Clients division. There continue to be profitability issues at group level at Deutsche Bank, weaken- ing the wealth business. In September 2016 Deutsche Bank and Raymond James also finalised the sale of the former’s US private client services unit, which employs roughly 200 advisors managing $50bn in client assets. HSBC Private Bank also saw its global position slide, ranking at 14th position with AuM of $222bn at the end of 2016.

All eyes on Asia More Asian private banks, with an increas- ing international focus, are expected to join the top ranks of global private wealth man- agers in the coming years. Even though many of them did not make it through to the global top 25 this year, these

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PBI 345.indd 7 10/07/2017 10:32:11 Private Banker International

ANALYSIS ANALYSIS TECHNOLOGY

When will private banking reach peak digital?

At the recent annual PBI London Conference and Awards, the prevailing theme was, once again, the threat and opportunity posed by technology to private banking. However, other fields have found that the extent to which digital can replace human interaction may be finite, writes WealthInsight’sOliver Williams he rise of digital technology in private If the publishing industry is a case study advice and proper planning dispensed for- banking has now clearly manifested for digital reversal, in which consumers fall mally and face-to-face, not dissimilar to the itself as either a front-office tool, for back to old technology as the novelty of the average private banking client. clients to micro-manage their portfo- new passes, the music industry is a window This approach to marketing and book - T into a world beyond technology. ing holidays is contrary to the data-first lios via the internet, or a back-office tool for tasks involving data. At the turn of the millennium, digital con- approach preached by marketers – not just Many speakers at the PBI London Confer- demned vinyls, cassettes and CDs to the inte- at private banking conferences, but to all ence and Awards 2017, however, addressed riors of East London bars as any profit in industries. Segmentation is the word of the not the current threats and opportunities, their sales collapsed. day: Armed with the right data, companies but ones that have not yet materialised. Now overwhelmed with musical choice can automate everything from marketing to Many of the talks borrowed metaphors online, consumers are instead clamouring for product design. from successful tech companies (“the Uber- the intimacy and closeness lost in pre-record- However, one bank making a stand against moment for private banking” was heard one ed music, but found in live performances. this standardisation is Investec Private Bank too many times), while others took passages Fans do not just want to listen to music, but with its #MoreThanData campaign. In a from Harari on human-bionics and some they want to experience it. series of videos, Investec asks clients to went on to mention flying cars, predicting Live is the new digital, as concerts and read their own demographic and education an age where private banking as we know it festivals flourish in every corner of the coun- data-profile before assessing whether it is will be redundant. try, appealing to all age groups. This is post- correct. In every instance it is not, leading While automation changes the face of digital – a world that can never be replaced to Investec’s moral of the story that “it is private banking on a daily basis, this article with a virtual reality headset or Facebook impossible for cold data to tell us who they examines the possibility of a ‘peak digital’ live video feed. really are.” moment in private banking. While private bankers might struggle to Head of Investec’s private bank in South Already evident in other industries, the take a leaf out of Michael Eavis’s book, they Africa, Deon Katz, says: “We take the time to ideal of peak-digital presupposes a limit to can certainly learn from the marketing of get to know our clients personally and pro- digital disruption, where technological inno- such experiences. Like bookstores before fessionally and form long-term relationships vation is severed not by science but consum- them, travel agencies were once abandoning with them. This enables us to personalise our er demand. Private banking is an industry the high street in droves as their customers products and services, and ultimately ensures which, more than most, is shaped by con - turned to the internet for their holidays. an extraordinary client experience.” sumer or customer demand. Will it too see Travel agencies are now making something Whether or not an over-reliance on data the dawn of peak digital? of a comeback: Kuoni is growing its number will lead to private banking’s peak digital The first rumours of a peak digital moment of high street stores from two in 2008 to 66 moment, it would appear that some elements came two years ago from within the pub - this year, Abercrombie and Kent opened its of the current trend of digital disruption are lishing industry. Forever forewarned about first storefront in Harrods in 2009, and Scott here to stay. e-readers – Kindles and the like – publishers Dunn now welcomes visitors into its Putney Just as online content complements the were astonished when, in 2015, digital book Bridge office in London. offline in the spheres of books, music and sales fell from £563m ($728m) to £554m in Staffed with experienced advisors, these travel, digital platforms and applications are the preceding year, as physical book sales travel agencies are meeting a tide in demand required to accompany traditional private rose from £2.74bn to £2.76bn for the UK. for humanity in holidays. As Kuoni notes: banking services. Following these figures were a string of “[Customers] are coming into a store to speak Fintech and technology companies will no announcements from the high street: Ama- to someone who can give them real insight doubt continue to steal market share from zon has opened its first bricks-and-mortar and help guide them to the right holiday.” private banks. But convincing ourselves that bookshop, and traditional chains Water- As these are all high-end travel agencies, all future threats will come from technol - stones and Foyle’s have both returned to it would seem that the affluent traveller is ogy will serve only to distract us from the profit after years in the red. increasingly prepared to pay for expert real threats. <

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PBI 345.indd 8 10/07/2017 10:32:17 Private Banker International HSBC CANADA FEATURE

HSBC aims to double its private banking business in Canada

Canada’s private wealth management market is a major opportunity, and HSBC is looking to double its Canadian private client business in the coming years. Robin Arnfieldspeaks to Nader Guirguis, CEO, HSBC Private Wealth Services (Canada)

gold-standard reputation, socioeco- agement (AuM) of $427.9bn. In Canada, al, Calgary, Toronto and three in Vancouver,” nomic stability and liberal immigra- HSBC held C$16.36bn ($12.35bn) in AuM, says Guirguis. tion policy have led to a significant according to the bank amount of international wealth mak- HSBC Canada’s retail banking and wealth Tripod model A management businesses benefited from AuM ing its way into Canada. The country is also HSBC serves private clients in Canada experiencing a boom in its domestic wealthy growth in the quarter to 31 March 2017. through its Tripod model. Each private cli- numbers, giving private banks ample oppor- Guirguis notes: “HSBC Canada is investing ent has an RM who offers the full suite of tunities to prosper. heavily to double its private client base in the products and services such as bank accounts, The estimated 137,460 high net worth next three to four years, and double the size of cash management, and more complex lending (HNW) Canadians with assets of at least $1m our Canadian private banking business.” products. The RM is supported by an invest- in 2016 are expected to grow to 171,150 by ment counsellor who specialises in providing 2020, according to GlobalData. Private client thresholds discretionary investment services along with The estimates are based on liquid wealth To qualify for HSBC Canada private client estate planning and business succession plan- – cash deposits, bonds, equities and mutual status, minimum investable assets of C$1m ning, and a wealth planner who makes recom- funds – held onshore in Canada. HNW assets are needed. HSBC Canada offers Premier mendations to the client, says Guirguis. are also expected to grow from $490.19bn in Banking services to customers with total rela- Underlying this model, clients have a dedi- 2016 to $613.06bn in 2020. tionship balances of at least C$100,000. cated portfolio manager at HSBC Global Understandably, global banks find Canada “Over 75% of our private clients in Canada Asset Management (Canada) that handles the an attractive private banking hub. For HSBC, are current or retired business owners,” Guir- day-to-day running of their investments. Canada is “one of the jewels in the crown”, guis says. “The rest are professionals and Canada’s largest cities are experiencing according to Nader Guirguis, CEO of HSBC senior executives of large corporations. Our significant real-estate market growth, due to Private Wealth Services (Canada). commercial banking clients are the main con- Canada’s low-interest rate environment. “We “The country is attractive to us, as it’s a low- duit for our private client base, and we make help our clients with their real-estate invest- risk environment with a stable economy that sure our clients’ transitions between our com- ments, for example through mortgage prod- is attracting wealth and quality immigrants mercial banking and private client businesses ucts. We are seeing many clients diversity their from around the world.” are seamless.” holdings into real estate,” says Guirguis. Guirguis has over 25 years experience in the While including clients from resource-based HSBC differentiates itself using its global Canadian banking industry. In his current role, industries such as oil, gas and mining, HSBC investment and wealth management exper- he leads HSBC’s HNW/UHNW investment Canada’s private banking customers are diver- tise, according to Guirguis. “We have HSBC counsellors and wealth planners. Over the last sified across all industry sectors. “Of course, global asset management offices in over 30 year, HSBC has expanded its investments in there are regional variations – for example in countries, and our analysts are geographically its Canadian retail banking and especially its provinces such as Alberta there are a lot of close to the companies in which we invest our wealth management businesses, says Guirguis. clients in oil and gas,” Guirguis says. clients’ funds. We do our own research, and “There is huge interest in growing our Cana- HSBC services private clients across Cana- have our own direct connections to the man- dian franchise in wealth and private banking da, but has four main private wealth manage- agement of these companies,” Guirguis notes. by using HSBC’s global expertise to serve ment hubs – in Vancouver, Calgary, Toronto HSBC Premier and private banking clients Canadian clients. We are leveraging the fact and Montreal. enjoy linked bank accounts globally, enabling that we are the largest foreign-owned bank in “We service all the surrounding regions from them to move money in real time between Canada, and that we have a global network of these hubs, and we will be opening more ded- HSBC accounts in different countries. HSBC wealth management analysts,” he says. icated HNW offices. “Our private client rela- Canada also attracts international customers Since 1981, HSBC Canada has expanded tionship managers [RMs] also meet clients in who may be new immigrants to Canada, or by acquiring institutions such as Lloyds Bank many of our branches across Canada. We go who want to invest in Canada. Canada, an asset management firm, a trust to the client, rather than the client coming to “HSBC Canada is a natural conduit for company, Republic National Bank of New us,” explains Guirguis. clients who want to diversify their interna- York (Canada), and Barclays Bank Canada. HSBC Canada recently launched Jade by tional investments into the Canadian market In 2012, HSBC sold its Canadian full- HSBC Premier, an invitation-only lifestyle and or establish a foothold here. We regularly get service retail brokerage business to National banking offering for the HNW space. “Jade referrals from other HSBC subsidiaries. Bank of Canada, but retains the HSBC Invest- comprises a dedicated team of experts who “We also cater for the Canadian family Direct Canadian online brokerage. cater for HNW clients plus dedicated prod- office market, and they are coming to us to As of 31 March 2017, HSBC Global Asset ucts and services for this segment. leverage our global investment management Management globally held assets under man- “We will be opening Jade centres in Montre- expertise,” says Guirguis. <

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PBI 345.indd 9 10/07/2017 10:32:20 Private Banker International SURVEY COUNTRY SOUTH AFRICA

An evolving market in turbulent times

South Africa is set to experience a strong rise in demand for professional wealth management over the next two years. However, with 68.5% of the country’s HNW population aged above 50, pension and financial planning services will be the most popular. Vania Goncalves finds out more from a recent GlobalData report he South African wealth market is account for 65.6% of the South African Advisers should promote their professional influenced largely by the country’s HNW expatriate population. knowledge and experience to attract clients. political, economic and financial tur- Unsurprisingly, demand for pension Building new advisory models with the moil. President Jacob Zuma has been planning services will continue to increase. help of integrated digital services will prove T According to the report, demand for finan- to be advantageous, as demand for auto - widely criticised in recent months, not only for failing to uphold the constitution when cial planning services is – and will also con- mated investment services is also set to rise he ignored a state order to repay government tinue to be – strong, with 74.2% of wealth among cost-conscious consumers. funds used to restore his private home, but managers believing that the need for such Growth in demand for digital platforms also for firing finance minister Pravin Gor- services will rise in the next two years. will help clients manage a small proportion dhan in March 2017. There are several reasons behind the rise in of wealth at a lower cost, as 26.4% of wealth As a consequence of Gordhan’s dismissal, overall demand for professional wealth man- managers believe that self-directing clients the rand fell by around 2%, and ratings agement services in South Africa. invest a proportion of wealth independently agency Standard & Poor’s cut South Africa’s Lack of expertise is the main reason because they want to avoid management fees. credit rating to junk, citing “heightened (34.7%) for South African HNWIs to have This suggests that wealth managers will political and institutional uncertainties”. assets professionally managed, according to have to find alternative services to accommo- Despite this, the country’s financial mar- the report. As most come from the manu - date the needs of this digitally aware popula- ket is the most developed in the continent, facturing, property and real estate sectors, tion, and a transparent cost structure is vital providing easy access to financial products these HNWIs tend to be less familiar with to avoid losing clients to execution-only pro- when compared to neighbouring countries, the financial services sector. These HNWIs viders, even though they account for a small according to GlobalData Financial Services’ also want to gain access to a range of more percentage of the HNW portfolio. latest country report. sophisticated investments (23.3%), which Property investments are expected to However, the country’s wealth manage- further drives the demand for professional remain an important part of the typical ment market is far from mature, according wealth management services. HNW portfolio, according to GlobalDa- to the Wealth in South Africa: HNW Inves- Investors who lack financial market ta’s 2016 Global Wealth Managers Survey. tors 2017 report published in May. knowledge gain from choosing discretionary Although only 11.5% of South African It is an evolving market, though, and mandates, as they require less management HNW portfolios are allocated to this asset presents significant opportunities to wealth from the client. The South African wealth class, GlobalData believes it will experience managers as a large proportion of high net market is dominated by discretionary asset a strong rise over the next 12 months. worth (HNW) wealth remains unmanaged. management services (52.8%). Despite this, Nominal house price growth is predicted Around 21.5% of HNW investors, accord- around 70% of the industry participants to slow as foreign investors’ confidence has ing to the report, do not have their assets interviewed for the GlobalData report pre- been hurt by the country’s political and eco- managed by a wealth manager – double the dict increased demand for advisory mandates. nomic situation, leaving room for future global average – creating an opportunity for price-appreciation opportunities. n financial advisors to target this segment. EARNED INCOME IS THE MAIN SOURCE OF In addition, with rental income being the WEALTH FOR SOUTH AFRICA’S HNW INVESTORS The South African HNW population is main driver of property investments and dominated by men aged 51 years or above. % 50 interest rates at their highest in six years, Approximately 43% of HNW investors have Global South Africa more people will be forced to rent, therefore accumulated their wealth through earned increasing rental income opportunities. 40 income, in comparison to 23.3% of family Equities will continue to account for the business owners and 21.8% of first-genera- largest segment of the HNW portfolio, with 30 tion entrepreneurs. 46.7% of HNW investors’ assets allocated to With an aging HNW population, 99.1% of this class, in comparison to 37.8% globally, wealth managers experience strong demand 20 according to the GlobalData report. for pension planning services. The pension According to a study by Credit Suisse and offered by the South African government is 10 the London Business School, South Africa far from satisfactory for the HNW popula- has the best-performing equity market – pro- tion, and most individuals seek alternative 0 viding a 7.2% average return over a century. ways to prepare for their retirement. Other However, the market is also subject to Inheritane ownership Earned income Moreover, the country’s wealth market First-generationFamily business significant instability, with the JSE Index experiences high demand for pension plan- entrepreneurship returning 8% in 2014, -1% in 2015, and 3% ning advice among UK expatriates, who Source: GlobalData’s 2016 Global Wealth Managers Survey in 2016. <

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PBI 345.indd 10 10/07/2017 10:32:22 Private Banker International PBI LONDON CONFERENCE 2017 FEATURE

London’s future as a key wealth hub in a post-Brexit world: Conference report

The fourth Private Banker International London Conference 2017 on 8 June brought together professionals and experts from the private banking and wealth management industry to discuss key issues and themes that are influencing, shaping, and impacting the sector.Vania Goncalves provides an overview of the day he fourth Private Banker International The conference began with an opening key- Fernandez added that it is crucial to have a London Conference 2017 took place note speech by Paul Kearney of Kleinwort “deep understanding” of customer behaviour. at the Waldorf Astoria on 8 June. Hambros. Considering the attitudes of millennials, he The four sessions at the all-day con- Kearney said he is a “survivor of the said that according to a recent study, 71% T of millennials would rather go to the dentist ference were dotted with speakers from some consolidation” in the industry, recalling of the world’s biggest private banks and Kleinwort Benson’s acquisition by Société than listen to the banker. technology vendors, including Credit Suisse, Générale Private Banking. Fernandez suggested that AI is on the rise Kleinwort Hambros, UBS, Avaloq and App- On the evolving private banking landscape, and “will outperform tasks done by invest- way – just to mention a few. Kearney said: “We appear to be on the brink ment officers and portfolio managers today”, Diverse themes were explored throughout of a new dawn, the realisation of AI,” adding and added that banks will not be able to the day, with speakers and panellists discuss- that familiar jargon is being supplanted by solve all the problems in-house. ing, among other topics, the key opportuni- “daily active users, activation lengths, virality, “If we don’t collaborate, if we don’t open ties and challenges in the industry, the grow- [and] red traffic potential, as we are rushing up, we cannot be fast enough,” he added. ing demand for digitalisation, the influence headlong to become more digital”. Dena Brumpton of Barclays Wealth & of artificial intelligence (AI), the evolving Kearney also highlighted the need to “pay Investment Management delivered the ses- needs and behaviours of wealthy clients, and careful attention” to what “our digital strat- sion’s third presentation. the future of London as a key wealth hub. egy is”, and that not all innovation is good She spoke about the importance of keep- innovation. “The challenge of choosing the ing up with the evolving needs of clients, say- 1: The evolving private banking landscape and London’s status in 2017 right strategy seems to me to hinge on two ing the next generation of wealthy clients will dilemmas, both the direction of the innova- demand an immediate, transparent, techno- Panel members and speakers: tion and the speed.” logically friendly and unique service and that • Paul Kearney, MD, Kleinwort Hambros The second presentation came from achieving those four goals is going to be chal- Avaloq’s Francisco Fernandez, who spoke lenging. She added: “Young or old, the buy- • Francisco Fernandez, founder and CEO, about the power of disruption and the rise of ing behaviour of our client base is changing.” Avaloq AI. He said Avaloq is “promoting disruption Clients are now interested in the impact • Dena Brumpton, CEO, Barclays Wealth and as any other player in the financial industry” of their investment decisions, said Brump- Investment Management, (speaker only) and that disruption cannot be stopped.“I ton, suggesting that the industry will have to think we can do something against disrup- address this in the future. • Claudio de Sanctis, head of private tion – what I call self-disruption,” he added Brumpton also said: “The biggest disrup- banking Europe, Credit Suisse On the innovation point, Fernandez sug- tion for us as an industry is going to come Moderator: gested that many fintech ideas might be ille- from data availability and APIs.” gal at the beginning, but they will become The fourth presentation came from Clau- • Meghna Mukerjee, editor, Private Banker legal later on, as regulators “don’t want to dio de Sanctis of Credit Suisse, who spoke International kill innovation”. about the needs of the next generation.

❙❙Paul Kearney, Kleinwort Hambros , ❙❙Dena Brumpton, Barclays W&IM ❙❙Claudio de Sanctis,, Credit Suisse

www.privatebankerinternational.com June 2017 y 11

PBI 345.indd 11 10/07/2017 10:32:30 Private Banker International FEATURE PBI LONDON CONFERENCE 2017

❙❙Session one panel discussion ❙❙Francisco Fernandez, Avaloq De Sanctis explained that by listening to The first panel discussion, chaired by PBI Commenting on the challenges and advan- what his own children would expect from editor Meghna Mukerjee, drilled deeper into tages of networks, De Sanctis said: “The their “ideal private bank”, it is obvious that the topics discussed during the presentations. advantage is survival; the disadvantage is the the next generation is different. On the dynamics of the Kleinwort Ham- loss of control.” He added: “In the next 20-30 years, there bros merger, Kearney said he was nervous During the audience Q&A session, a ques- is going to be $41trn of wealth moving from about the two organisations coming together. tion posed to the panel was: “In this chang- one generation to another.” However, he added: “The cultures of the two ing environment, how do you know whether He added that he was shocked to find out firms were remarkably similar, and we were you are up with the curve, ahead of the curve that the “92% of young adults who inherit quick in bringing the two teams together to or behind the curve as an organisation?” money from their parents, change bank.” the same location.” De Sanctis said: “The problem with digi- De Sanctis went on to talk about the The conversation touched upon the cur- talisation and disruption is that disruption importance of orchestrating relevant net- rent challenges private banks are facing. Fer- happens so fast. By the time you are getting works for the next generation of clients, and nandez said: “The hurdles are often within the feedback you are behind the curve and it also discussed the Young Investor Organisa- the organisations, because they love what may be too late to correct it. tion (YIO) community that Credit Suisse cre- they have and try to protect their existing “So, in that sense I do fear that we are all a ated 10 years ago. assets. I say this is not good enough.” bit behind, and we just need to do our best to remain competitive.” Fernandez added: “If you ask me, I always feel behind the curve; that is why we are probably ahead”.

2: Servicing today’s clients – identifying their needs and preferences Panel members and speakers: • Richard Parkin, head of pensions policy, Fidelity International • René Hürlimann, head of sales, EMEA, Appway • Thomas Schaer, digital innovations lead, Appway (speaker only) • Hugo Borges, regional market head of Africa and Europe, Standard Chartered ❙❙Thomas Schaer, Appway ❙❙Hugo Borges, Standard Chartered Private Bank Private Bank • Edward Thomas, new business manager, Oxfam (panel only) Moderator: • Oliver Williams, head and co-founder, WealthInsight

Richard Parkin of Fidelity International opened the second session, talking about pension drawdown and clients’ goals. Parkin said one of the big mistakes in the UK is to talk about income drawdown as a single product. He added that Fidelity cat- egorises people who use drawdown by goals: ❙❙Session two panel discussion those who want to take their money out of

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PBI 345.indd 12 10/07/2017 10:32:42 Private Banker International PBI LONDON CONFERENCE 2017 FEATURE

their pension savings as “quickly as they Asked whether regulation is driving The third session’s opening presentation came can”, those who are focused on leaving the demand for digital solutions, Hürlimann from Citi Private Bank’s Simon Kingsnorth, pension for the next generation, and those said: “If you just look for compliance who spoke about technology trends and the who want to turn it into an income. through digitalisation, the user experience need for personalisation in the industry. Clients are now interested in doing all will not be great.” Kingsnorth explained that the private those things from a single account, said Par- During the audience Q&A, a question banking industry “has not been brilliant” in kin. “That presents a number of challenges: posed to the panel was: “How do we adjust innovating and keeping up with the pace of First, having multiple goals to be met from a our traditional pension way of thinking to technology, which “has never been faster single account; second, each of those goals emerging markets, such Nigeria and Ghana?” than it is now”. have different risk-return profiles.” Parkin said: “The products may be differ- He added that a lot of banks “struggle to Parkin also said that current retirement ent, the regulatory environment may be dif- get their data into good shape”. “Getting the goals are not just income-based. He added: ferent, but I think the principles themselves right people on the right strategy in place “The retirement goals themselves need to be are pretty universal. It is about trying to tai- for data is essential for your personalisation managed actively, not to reflect risk, but to lor those principles.” strategy,” he said. really help people drive more value out of The session’s second speaker, Dorsum’s their invested retirement savings. This risk of 3: Broadening out from the traditional Sándor Szabó, spoke about how AI can help leaving money on the table, I think, is a much private banking premise in client acquisition. Szabó said advisors bigger concern than the risk of running out.” Panel members and speakers: should be able to reach clients when they are The session’s second presentation came • Simon Kingsnorth, global head of digital not “physically closer” to them. from René Hürlimann and Thomas Schaer marketing, Citi Private Bank He explained how private banks can from Appway, who spoke about automation acquire new clients through Dorsum’s chat- and customer experience. Schaer said user • Sándor Szabó, key account manager, bot – how friendly conversations can take Dorsum expectations are a main driver for automa- place and advisors can “step into the conver- tion, and that there are three key areas that • Ali Sadr, chair, Pilatus Bank sation, or modify the questions being asked need attention: convenience, rapidity and or the entire procedure if needed”. • Nick Middleton, co-head, UBS personalisation. SmartWealth He also spoke about how a virtual advice He also said private banks have to be able solution can help in “deepening or keeping to provide “modern communications chan- • Andrew Reid Thomas, head of sales, the client relationships alive”, for instance by nels”, like chatbots. “It is not about getting Europe, InvestCloud (panel only) receiving investment advice on their mobiles. rid of the client advisor through work auto- Moderator: The third presentation came from Ali Sadr mation; it is about facilitating the daily busi- of Pilatus Bank, who said the “Uber moment” ness, the daily job of the client advisor.” • Bartosz Golba, head of wealth of banking will come from “lowering the management, GlobalData Appway ended the presentation with a live thresholds that private banks still hold”, so demonstration showing that functions such as updating an address could be done via a chatbot without going into a physical branch. The session’s final speaker was Standard Chartered Private Bank’s Hugo Borges, who spoke about maintaining strong client rela- tionships from an African perspective. Borges mentioned the importance of building relationships at an early stage, and reviewing and adapting the coverage market. Borges also explained that brand is instru- mental in attracting and retaining ultra-high net worth (UHNW) assets. “Finally it is about the management of reputation and operating risks because this is a key compo- nent of value management,” he said. Session two’s panel discussion was chaired ❙❙Simon Kingsnorth, Citi Private Bank ❙❙Nick Middleton, UBS by Oliver Williams, head and co-founder of WealthInsight. Edward Thomas from Oxfam joined the discussion, and said that the next generation views ethical investments, phi- lanthropy and being socially responsible as a “much higher priority”. Borges added that among UHNWs in Afri- ca, the new generation of clients, educated in some of the world’s best universities, have a different way of approaching ethical invest- ments, and that private banks might have to “start looking at that area as an asset class in its own right”. ❙❙Session three panel discussion

www.privatebankerinternational.com June 2017 y 13

PBI 345.indd 13 10/07/2017 10:32:52 Private Banker International FEATURE PBI LONDON CONFERENCE 2017

they can serve mass affluent clients who con- 4: Private banking in the UK and Joining the panel were James Fleming of trol “the highest amount of wealth” and are Europe – what should we expect? Arbuthnot Latham & Co., Jonathan Davis “left alone”. Panel members and speakers: of Avaloq, Mouhammed Choukeir of Klein- He added that if private banks can bring wort Hambros, and Alexandra Altinger of together “high touch with high tech”, that • John Saunders, MD of US and Europe, Sandaire Investment Office. Coutts International would lead to the Uber moment of banking. Choukeir focused on how London is a The final speaker of session three was • James Flemming, vice-chair, Arbuthnot global powerhouse in the financial industry. Nick Middleton of UBS, who spoke about Latham & Co. (panel only) “The reason that London has that number the opportunities that robo-advisors can pre- one status is perhaps partly because it is part • Jonathan Davis, UK MD, Avaloq (panel sent to traditional wealth managers. Middle- of the EU, but a lot of the clients that we only) ton said the industry has to think about the speak to bank through London for other rea- way clients want to engage: “We can’t be in • Mouhammed Choukeir, chief investment sons – the human capital, the infrastructure, a position where we have to catch up. We officer, Kleinwort Hambros (panel only) the rule of law, [and the] regulation. have to be on this wave now.” “In that context, we think London will • Alexandra Altinger, CEO, Sandaire He highlighted the importance of conveni- Investment Office (panel only) retain and continue to be a source of com- ence, adding: “People are busy; no one has parative advantage.” time to go and find advisors. Rather than Moderator: Altinger added: “I do think that there are being a threat to our industry, robo-advi- • Ian Woodhouse, senior business advisor, still loads of unknowns, but it is important sors and digital technology actually help to Orbium to recognise that London has proved itself as enhance and augment our businesses.” one of the premier financial wealth manage- The conference’s penultimate panel dis- John Saunders of Coutts International ment centres in the world.” cussion was chaired by Bartosz Golba of opened the fourth session. Davis agreed that London will remain GlobalData. Andrew Thomas from Invest- He spoke about the future of private bank- a strong financial centre, but there will be Cloud joined the panel. ing, saying: “I think we can expect different “greater uncertainties” ahead. Kingsnorth said one of the key features in technologies to drive greater fragmentation Commenting on the impact Brexit will customer experience and private banking is on one hand, but newer forms of collabora- have on regulations, Fleming highlighted personalisation. “Nowadays it is not difficult tion on the other. that there is a “great concern” about the to achieve personalisation via technology. “In part, it is driven by regulative impera- “potential loss of passporting”. He said: “We There is a huge amount of tools available.” tives, and in part because I don’t see the will no longer be able to send people onto Middleton added: “As an industry we seg- established players being able to simply the continent to sell products. Businesses ment people in very simplistic ways. We seg- absorb fintech as they start to create new will have to consider selling out subsidiary ment clients based on wealth, but that’s not ground or going into existing market share.” companies or changing their business models how we should segment clients. We should Saunders also explained that those engag- entirely and that is a major feature.” segment clients based on their requirements ing in cross-border activity will have to be Altinger said that she did not see “any and their complexity.” aware of the many regulations and be “very change to the directionality” of the regula- Commenting on the cost of digitalisation, clear about what those rules mean”. tion that is in place, and Saunders added that Thomas said the most important aspect is to The final panel discussion was chaired once the rules are set, they are not going to test the solutions first before rushing into cre- by Ian Woodhouse of Orbium, and focused be about taxes, but more in the area of cross- ating a digital advisor. He said: “You want to on whether the UK, and particularly border compliance. be cost-effective, but don’t provide a generic London, will retain its top financial status The PBI London Conference was followed offering that does not differentiate you.” after Brexit. by a gala dinner and awards ceremony. <

❙❙Session four panel discussion ❙❙John Saunders, Coutts International

14 y June 2017 www.privatebankerinternational.com

PBI 345.indd 14 10/07/2017 10:33:04 Private Banker International PRIVATE BANKER INTERNATIONAL AWARDS NEWS

Winner takes it all: PBI London Awards

Private Banker International announced the winners of the fourth annual Private Banker International Awards: London 2017 at a glittering gala dinner ceremony at the Waldorf Astoria hotel on 8 June

he Europe-focused Private Banker The Outstanding Private Banking Cus- PBI editor Meghna Mukerjee said: “The International Awards: London 2017 tomer Relationship Service and Engagement Private Banker International: London Con- celebrated the best among the private Award went to Citi Private Bank, while ference and Awards have gathered significant banks that are successfully serving Société Générale Private Banking was select- momentum in the last four years and this T year’s event was exceptional. wealthy clients across the region. ed as Outstanding Private Bank – Western Winners were selected by an independent Europe. “The calibre and quality of the submissions judging panel and PBI editorial team mem- Prometeia was distinguished with the Out- were extremely high. We added a new award bers across 12 categories alongside the Edi- standing Digital Solutions Provider (Vendor) category this year as well, which was enthu- tor’s Special Award. Award, while Appway received the Out - siastically received by the industry. BNP Paribas Wealth Management and standing Wealth Management Technology “The 2017 award winners are rewiring Credit Suisse won two awards each. The Provider – Middle Office (Vendor) Award, the future of the private banking industry first claimed the Outstanding Private Bank and Avaloq took home the Outstanding in Europe, and have demonstrated their for Next-Generation Proposition and the Wealth Management Technology Provider – strength through innovative and market- Outstanding Private Bank for Philanthropy Back Office (Vendor). leading initiatives, excellence and expertise. Proposition Award, while the latter claimed The Editor’s Special Award went to “They have proved successful during chal- the Outstanding Private Bank – Eastern Nykredit, in recognition of its high rate of lenging times for the industry and identified Europe and the Outstanding Private Bank client satisfaction and ambitious growth in core propositions to remain competitive and for UHNW Clients award. the Nordic region. client-centric,” Mukerjee added. <

PBI Awards: London 2017 winners Outstanding Private Bank – UK – International Clients HSBC Private Bank (UK) Outstanding Private Bank – UK – Domestic Clients Barclays Wealth and Investments Outstanding Private Bank – UK Crown Dependencies Kleinwort Hambros

Editor’s Special Award ❙❙BNP Paribas Wealth Management and Standard Bank Wealth and Investment Nykredit win Outstanding Private Bank for Next-Generation Proposition Award Outstanding Digital Solutions Provider (Vendor) Prometeia Outstanding Wealth Management Technology Provider – Middle Office (Vendor) Appway Outstanding Wealth Management Technology Provider – Back Office (Vendor) 2017 Avaloq Outstanding Private Bank for Next-Generation Proposition BNP Paribas Wealth Management

Outstanding Private Bank for Next-Generation Proposition ❙❙Citi Private Bank win Outstanding Private Banking Customer Standard Bank Wealth and Investment Relationship Service and Engagement Award Outstanding Private Bank for UHNW Clients Credit Suisse Outstanding Private Bank for Philanthropy Proposition BNP Paribas Wealth Management Outstanding Private Banking Customer Relationship Service and Engagement Citi Private Bank Outstanding Private Bank– Eastern Europe Credit Suisse Outstanding Private Bank – Western Europe

Société Générale Private Banking ❙❙Société Générale Private Banking win Outstanding Private Bank – Western Europe Award

www.privatebankerinternational.com June 2017 y 15

PBI 345.indd 15 10/07/2017 10:33:13 Private Banker International NEWS TECHNOLOGY ROUND-UP

Let’s talk technology: monthly update

InvestCloud to launch London fintech founder of online lender Spotcap. tor and will ease entry into this important incubator Wealthsimple founder and CEO Michael market for innovative Australian businesses.” US-based InvestCloud is set to launch a fin- Katchen said: “Our mission is to make smart tech incubator and accelerator at its Euro- financial services accessible to everyone in OCBC launches chatbot for employees pean headquarters in London. the world. Singapore-based OCBC Bank has launched The InvestCloud Innovation Center Lon- “There are a lot of people in the UK who a human resource (HR) mobile app for don, which opens in Summer 2017, will offer aren’t getting the tools and advice they need employees, to enhance operational efficiency both new startups and established financial to live their best financial lives, and in par- within the business. firms the ability to quickly deliver digital ticular young and first-time investors.” The new HR In Your Pocket app features wealth management solutions supported by The UK expansion marks the company’s an artificial intelligence (AI)-powered chat- the InvestCloud platform. second international expansion, following its bot, Buddy, which is integrated with the The 9,302-square-foot venue will follow entry into the US earlier this year. The busi- bank’s HR information system. The chatbot the blueprint of the firm’s first technology ness currently manages $1bn in assets and offers responses specific to each employee, accelerator at its Los Angeles headquar- serves over 30,000 clients. such as leave balance, medical and lifestyle ters. Members will have access to their own expenses reimbursement claim status, the InvestCloud Sandbox, allowing access to Bank Vontobel taps Appian for digital overhaul bank’s code of conduct, internal job postings over 200 InvestCloud financial Apps, over Switzerland-based Bank Vontobel has select- and HR policies, among others. 2,000 APIs, integrated market data, news, ed US-based software developer Appian to Employees will be able the access the new financial and accounting data, a document execute its digital transformation strategy in app using OCBC OneTouch. Queries can repository and InvestCloud’s method of all its divisions. be either typed in the chat window or made development. The bank will use Appian’s low-code using a voice command. Businesses will be able to create sub-teams application platform to improve the cus - The app, which has been developed in- from their own organisations, or use Invest- tomer experience and transform traditional house, will currently run on iOS platforms. Cloud’s staff and external partners. In addi- business methods to more efficient and Plans are being developed to make the app tion, they will have access to InvestCloud’s agile processes. available on the Android platform at a later Programs Writing Programs (PWP) to self- Appian claims its platform will accelerate date. The bank plans to launch the app in its generate lines of code, and to its Digital the development of enterprise applications Malaysian unit by the end of 2017. Warehouse technology to provide real-time without any coding. It combines process OCBC Bank’s head of group human insight and information. management, data management, online and resources, Jason Ho, said: “The internal John Wise, co-founder and CEO of Invest- offline native mobility, collaboration and feedback was that our apps for customers Cloud, said: “It’s no secret that the financial content management. are innovative and useful, so we thought: services industry is behind the curve when it The platform is being used by Vonto- ‘Why not channel our bank’s digital capabili- comes to digital. Many projects cost millions bel employees at its European and North ties and technological expertise into devel- only to be scrapped, and the failure rates for America offices in three business areas: oping intuitive and easy-to-use apps for our startups are incredibly high. asset management, private banking and employees too?’ “InvestCloud’s Innovation Centers ensure investment banking. Appian said its platform This is all the more apt as mobile phones success for these projects – allowing teams will streamline Vontobel’s customer onboard- have become an indispensable gadget for eve- to innovate and ideate quickly, drawing on ing, client configuration processes, contribute ryone, and the HR app readily complements the experience of the Innovation Center to an automated risk-analysis process, and this modern lifestyle.” team and the wealth of capability within the manage compliance. InvestCloud app library.” HSBC unveils plan to venture into robo-advice Applications for the InvestCloud Innova- Australia and Hong regulators sign fintech UK banking group HSBC has announced tion Center are being accepted now. co-operation pact plans to launch an online advice service by The Securities and Futures Commission the end of 2017. The bank’s entry into the Canadian robo-adviser Wealthsimple to (SFC) of Hong Kong and the Australian robo-advice space will target customers with expand into UK Securities & Investments Commission (ASIC) less than £15,000 to invest. Wealthsimple, a digital investment man - have signed an agreement to collaborate in Developed in collaboration with the Finan- agement business based in Canada, has areas of fintech. cial Conduct Authority (FCA), the service announced plans to expand into the UK. The two parties will refer fintech startups will aim to integrate online, telephone and The robo-adviser is expected to launch to each other for advice in the two markets. face-to-face advice, HSBC said. It will offer a beta version of its platform in the UK in Startups will be supported through ASIC’s recommendations based on specific require- mid-2017 and fully launch in September Innovation Hub and SFC’s Fintech Contact ments by using algorithms and data. 2017. As well as being able to create an Point, which will help businesses gain insight The bank did not disclose service charges investment account on the website or mobile into the regulatory regimes in their markets. but said it will be “affordably priced”. app, Wealthsimple users in the UK can also The alliance will also facilitate information HSBC’s head of digital UK & Europe, access advisers and choose from a selection exchange between the watchdogs. Raman Bhatia, said: “We have been working of standard or socially responsible invest- Commenting on the new partnership, with our customers and the FCA to shape our ment portfolios. ASIC commissioner Cathie Armour said: offering to ensure that we are providing the The UK arm will be headed by Toby Trie- “The Co-operation Agreement is a significant most up-to-date and smart wealth manage- bel, a fintech entrepreneur and the former co- boost for Australia’s burgeoning fintech sec- ment advice possible.” <

16 y June 2017 www.privatebankerinternational.com

PBI 345.indd 16 10/07/2017 10:33:13 Private Banker International REGULATION ROUND-UP NEWS

The latest in regulation A monthly round-up of the main regulatory announcements that impacted the private banking and wealth management industry worldwide

FCA calls for shake-up of the asset our investment-linked products. With the In addition, Barclays, Varley and Jenkins management industry launch of the trust corporation here, we have been charged with fraud relating to The UK’s Financial Conduct Authority (FCA) now have the broadest ASEAN footprint of the October capital raising, and for unlawful has called for greater transparency in the any asset management company, which is financial assistance. asset management industry after a review strategically important as we anticipate Barclays issued a statement saying it is concluded that “competition is weak” in the accelerated economic growth within the “considering its position in relation to these £7trn ($9.1trn) sector. ASEAN region,” Dommermuth added. developments” and that it “awaits further Fund managers will now be required to The new trust company has also named details of the charges from the SFO”. act in the best interests of investors and Aira Gaspar as CEO. She was previously chief appoint a minimum of two independent investment officer at Manulife Philippines. FCA charges ex-UBS compliance officer with directors to their boards, the watchdog insider dealing said. The regulator also called for a Edmond de Rothschild fined in Luxembourg The UK’s FCA has charged former UBS single, all-in fee for investors, as well as for involvement in 1MDB scandal compliance officer Fabiana Abdel-Malek and consistent and standardised disclosure of The Luxembourg division of Swiss private accomplice Walid Anis Choucair with charges costs to investors. bank Edmond de Rothschild has been fined of insider trading. At the same time, the FCA suggested almost €9m ($10.2bn) by local regulators Abdel-Malek, a former employee at the that it should be offered regulatory over its involvement in the scandal-ridden London branch of UBS, and Choucair have oversight of investment consultants. It also Malaysian state fund 1Malaysia Development been charged with five counts of insider announced plans to launch a market study Berhad (1MDB). dealing that occurred between June 2013 into investment platforms. The remedial Rothschild said the fine “marks the end and June 2014. The pair have been accused of making a profit of £1.4m through illegal measures will be implemented in multiple of the proceedings in which it has actively participated”, without giving any further trading of shares in various companies, stages, with some subject to the outcomes details on the issue. including Elizabeth Arden. of consultations. Swiss financial regulator FINMA is currently “As part of the investigation, the FCA asked FCA CEO Andrew Bailey said: “The asset carrying out enforcement proceedings us to provide information in relation to a sole, management sector is important to the against Rothschild to ascertain whether the mid-level, former employee based in London. economy, managing the savings of millions bank met anti-money laundering rules. As this is an ongoing criminal prosecution, of people. In the current low-interest Several other Swiss banks have also been and to avoid the risk of prejudicing the environment it is vital we help people earn embroiled in the 1MDB scandal. Last month course of justice, we are unable to comment a return on their savings.” the Monetary Authority of Singapore fined further,” UBS stated. Manulife receives green light to operate trust Credit Suisse over 1MDB-linked transactions, The pair appeared in a London court, with a further hearing scheduled for July in business in the Philippines and in April 2017 FINMA issued a written reprimand to UBS over its connection with Southwark. The pair could face a maximum The Philippine central bank has granted the scandal. Swiss banks BSI and Falcon seven-year sentence under UK law if found Canadian insurance major Manulife Financial Private Bank have already been stripped of guilty of insider dealing. approval to operate trust and other fiduciary their merchant banking statuses in Singapore business in the country. as a result of their involvements. Singapore signs multilateral tax co-operation Following the liberalisation of trust agreements business in the Philippines, Manulife Asset Barclays faces fraud charges over Qatar Singapore has signed multilateral framework Management and Trust has become the capital-raising arrangements agreements on bilateral cooperation on first foreign financial institution to receive UK banking group Barclays and four former Automatic Exchange of Information (AEOI). a certificate of authority from the Bangko executives have been charged with conspiracy The city-state signed the Multilateral Sentral ng Pilipinas. to commit fraud over capital raising from Competent Authority Agreements (MCAAs) on Manulife said the licence would enable it Qatari investors in 2008. the Automatic Exchange of Financial Account to bolster its offerings in the Philippines and The charges relate to two capital raisings Information under the Common Reporting demonstrate a “commitment to deepening its with Qatar Holding and Challenger Universal Standard (CRS) and the Exchange of Country- relationships in Asia”. between June and October 2008, as well by-Country Reports. AEOI relationships The company intends to bring an initial as a $3bn loan made available to Qatar remain bilateral under the MCAAs, as offering of unit investment trust funds in the through the economy and finance ministry in signatories enter bilaterally with another third quarter of 2017. November 2008. signatory on a mutual consent basis. It also plans to offer a suite of customised The executives charged are ex-Barclays CEO The Ministry of Finance of Singapore said solutions covering pension accounts, bespoke John Silvester Varley, former Barclays Capital the signing of the agreements reaffirms institutional mandates and segregated executive chair of investment banking and the country’s commitment to international accounts for institutional investors. investment management in the Middle East standards on tax co-operation. It added that Commenting on the development, and North Africa Roger Allan Jenkins, former Singapore will also want to ensure there is a Manulife’s head of wealth and asset Barclays wealth and investment management level playing field among all major financial management for Asia, Michael Dommermuth, CEO Thomas Llewellyn Kalaris, and former centres on CRS. said: “The Philippines is a promising market European head of financial institutions The city-state will also consider automatic for the asset management industry, given the Richard William Boath. exchanges of financial account information rapid growth of the middle-class population. All four executives and the bank have been with regional jurisdictions which have the “We have, over time, already built a strong accused of making representations related to safeguards to ensure the confidentiality of book of business in the Philippines through the June 2008 capital raising. the information exchanged. <

www.privatebankerinternational.com June 2017 y 17

PBI 345.indd 17 10/07/2017 10:33:14 Private Banker International NEWS PBI GREATER CHINA AWARDS

Eastern stars: PBI Greater China Awards

The winners of the Private Banker International Greater China Awards 2017 were announced on 2 June at an exclusive luncheon at Hong Kong’s Park Lane Pullman hotel

rivate Banker International announced won the best Private Bank in Taiwan award PBI editor Meghna Mukerjee said: “The the winners of its North Asia-focused and HSBC Private Banking scooped the Greater China region represents a wealth of awards at the Park Lane Pullman award for best Private Bank in Hong Kong. opportunities and unique dynamics for glob- Hotel in Hong Kong. The event cele- The Best Family Office Proposition in al and local private banks. Wealth generation P is continuing at a rapid rate across China, brated excellence and achievement in private Greater China award went to Credit Suisse banking markets across the region. AG, while HSBC Private Bank won Best Off- Hong Kong and Taiwan, and the mass afflu- Winners were selected by an independent shore Renminbi Offering. ent population, particularly, is a segment to judging panel and PBI editorial team mem- BNP Paribas was distinguished with the watch and engage. bers across institutional, service proposi- Best Ultra-High Net Worth Individual Offer- “The successes in this crucial region must tion and individual categories. They were ing in Greater China award, while Credit be recognised and felicitated. The award announced at an exclusive luncheon, where Suisse AG won the Most Effective Wealth winners exhibited a clear focus in their strat- presentations on the North Asian wealth Management Platform in Greater China. egies and are shaping the future of the private management markets were also delivered. Citi Private Bank was also recognised with banking industry. They have demonstrated China Merchants Bank was named Best the best Next-Generation Offering in Great- their worth through their excellence, exper- Private Bank in China, while Taishin Bank er China award. tise and industry-leading initiatives.” <

❙❙Samuel Lin, Head of Retail and Wealth Management, Taishin Bank PBI Greater China Awards 2017 winners Best Private Bank in China Best Next-Generation Offering in Greater China Winner: China Merchants Bank Winner: Citi Private Bank Highly Commended: Noah Private Wealth Highly Commended: BNP Paribas Best Private Bank in China (Foreign) Best Offshore Renminbi Offering in Winner: Citi Private Bank Greater China Highly Commended: Credit Suisse Winner: HSBC Private Banking Best Private Bank in Taiwan Best Ultra-High Net Worth Individual Winner: Taishin Bank Offering in Greater China Highly Commended: E.SUN Bank, CTBC Bank Winner: BNP Paribas Best Private Bank in Taiwan (Foreign) Most Effective Wealth Management Technology Winner: UBS Platform in Greater China Highly Commended: Citi Private Bank, Credit Suisse Winner: Credit Suisse Best Private Bank in Hong Kong Highly Commended: Taishin Bank Winner: HSBC Private Banking Outstanding Young Private Bankers Best Private Bank in Hong Kong (Foreign) (Greater China-North Asia) Winner: DBS Bank (Hong Kong) Winners: Echo Bi, Eddie Chng and Michele Tan, Highly Commended: Citi Private Bank, Credit Suisse DBS Private Bank Best Family Office Proposition in Greater China Outstanding Private Banker Winner: Credit Suisse AG (Greater China-North Asia)

Highly Commended: London and Capital Asia Winner: Sheila Ho, DBS Private Bank ❙❙Taishin Bank wins the Best Private Bank in Taiwan Award

18 y June 2017 www.privatebankerinternational.com

PBI 345.indd 18 10/07/2017 10:33:20 Private Banker International PEOPLE MOVES TITLE NEWS

People moves

PBI lists the month’s key career developments by the movers and shakers in the private banking industry. In the UK, Michael Morley, former CEO at Coutts moves to Deutsche Bank Wealth Management, while in the US, Greg Fink moves from Fidelity Investments to ACG Wealth

People Moves

Country Name Moved from Moved to Old position New position Deutsche Bank Wealth UK Michael Morley Coutts CEO Head – UK arm Management Manager – Schroder ISF Japanese Japan Ken Maeda Schroders Schroders Head – Japanese equities Opportunities fund MD and head – anti-financial crime, the USA Richard Weber Internal Revenue Service Deutsche Bank Chief – criminal investigation division Americas Russell Reynolds Russell Reynolds Head – global supply chain and global Australia Peter O’Brien Head – Asia-Pacific region Associates Associates industrial services and infrastructure UK Michael Rosenthal Signia Wealth Signia Wealth Head – hedge fund investments CIO and head – hedge fund investments UK John Griffith-Jones FCA Unconfirmed Chair (Retaining position until March 2018) JP Morgan Asset Senior relationship manager, global UK Alexander Barry Legg Mason Head – UK sales Management strategic relationships Head – Southeast Asia and Australasia Singapore Rohan Singh Northern Trust BNY Mellon Asia-Pacific head of asset servicing regions and sales for Asia-Pacific SS&C Technologies USA Peter Salvage BNY Mellon MD in London and New York Global head – hedge fund services Hedge Fund Services Investec Wealth and UK Svenja Keller Killik & Co Financial planning director Head – wealth planning Investment Jersey Ian Rumens Intertrust Intertrust Intertrust’s private wealth director Global head – private wealth services Vice-president – clearing and custody USA Greg Fink Fidelity Investments ACG Wealth President and CEO services Dumfries and Galloway area assistant UK Andrew Wood Brewin Dolphin Hargreave Hale Investment manager, Carlisle office director USA Matthew Zames JP Morgan Unconfirmed COO Unconfirmed Head – client services in Australasia Australia Sally Surgeon Northern Trust Northern Trust Head – client services in Australasia and new Sydney office Director – private banking and wealth UK Ian Woodhouse PwC Orbium Senior business advisor management Standard Life Investment director – multi-asset, Asia- Hong Kong Jason Yu Schroders Head – multi-asset product, north Asia Investments, Hong Kong Pacific Amundi Alternative UK Michael Hart Gresham House Global head – business development Head – distribution Investments Global equity research sector head and UK Robert Lea UBS Ashburton Investments Head – new global equity research team strategist Switzerland Daniel Lipp St Galler Kantonalbank Unconfirmed Private banking head Unconfirmed

www.privatebankerinternational.com June 2017 y 19

PBI 345.indd 19 10/07/2017 10:33:24 Simple, secure and effortless digital Private Banker International NEWS PBI GLOBAL AWARDS solutions for  nancial services organisations

Nominations now PRIVATE BANKER Editor: Meghna Mukerjee Email: [email protected] open for PBI Global Correspondent: Vania Goncalves Tel: +44 (0)20 7406 6703 Email: [email protected] Wealth Awards Contributor: Robin Arnfield Group Publisher: Ana Gyorkos Tel: +44 (0)207 406 6561 Email: [email protected]

Sub-editor: Nick Midgley

ominations for the Private Banker From the various nominations, three Subscription Enquiries: Alex Aubrey International Global Wealth Awards to five institutions or individuals will be Tel: +44 (0)2030962603 To  nd out more please visit: 2017 are now open. shortlisted for each award category, by the Email: [email protected] In their 12th year, the Private independent judging panel. Following the Director of Events: Ray Giddings Tel: +44 (0) 203 096 2585 www.intelligentenvironments.com N Email: [email protected] Banker International Global Wealth Awards, review of the shortlisted applications, the which take place in Singapore annually, are judging panel will make the final selection Customer Service an established mark of excellence for global of the winners. Tel: 020 3096 2636 or 020 3096 2622 Email: [email protected] @IntelEnviro institutions. Winners will be announced at a Gala Din- The judges will make their decisions on the ner on 13 October 2017 in Singapore, which As a subscriber, you are automatically entitled winners based on the quality and depth of will be preceded by the long-running Private to online access to Private Banker International and a five-year the submission, information from executive Banker International Global Wealth Confer- newsletter archive. Please contact customer services for more interviews, and corroborated facts by peers ence on the day. information. and industry experts. Submission must refer- The deadline to submit nominations for For more information on accessing Private Banker International ence projects from 2016 and 2017. the awards is 28 July 2017. < content online, or to subscribe, please telephone +44 (0)20 7563 5681 or email [email protected] The award categories for 2017 London Office Institutional Awards 71-73 Carter Lane London, EC4V 5EQ Outstanding Private Bank – North Asia Tel: +44 (0) 207 936 6650 Outstanding Private Bank – South Asia Asia Office 1 Finlayson Green Outstanding Private Bank – Southeast Asia #09-01 Outstanding Private Bank – Asia-Pacific Regional Singapore, 049246 Player Tel: +65 6383 4688 Fax: +65 6383 5433 Outstanding Global Private Bank – Asia Pacific Email: [email protected] Outstanding Global Private Bank – Europe Financial News Publishing, 2012

Outstanding Global Private Bank – North America Registered in the UK No 6931627 Outstanding Global Private Bank – Latin America Unauthorised photocopying is illegal. The contents of this publication, Intelligent Environments is an international provider of innovative mobile and online solutions for  nancial services Outstanding Global Private Bank – Middle East either in whole or part, may not be reproduced, stored in a data retrieval system or transmitted by any form or means, electronic, mechanical, providers. Our mission is to enable our clients to deliver a simple, secure and effortless digital experience to their Outstanding Global Private Bank – Africa photocopying, recording or otherwise, without the prior permission of the publishers. own customers. Outstanding Global Private Bank – Overall For information on additional copies or syndicated online access to this ® Service Proposition Awards newsletter, please contact Customer Services. We do this through Interact , our single software platform, which enables secure customer acquisition, engagement, Outstanding Wealth Management Service for the Outstanding Private Bank for Growth Strategy – M&A transactions and servicing across any mobile and online channel and device. Today these are predominantly Affluent ® Outstanding Wealth Management Technology focused on smartphones, PCs and tablets. However Interact will support other devices, if and when they become Best Family Office Offering Initiative – Front End mainstream. Best Next-Generation Offering Outstanding Wealth Management Technology Outstanding Private Bank for UHNW Clients Initiative – Back Office We provide a more viable option to internally developed technology, enabling our clients with a fast route to market Outstanding Philanthropy Offering Most Innovative Digital Offering whilst providing the expertise to manage the complexity of multiple channels, devices and operating systems. Outstanding NRI/Global Indians Offering Most Innovative Business Model Interact® is a continuously evolving technology that ensures our clients keep pace with the fast moving digital Best Discretionary & Advisory Service Offering People Awards landscape. Most Effective Investment Service Offering Outstanding RM Training and Development Outstanding Wealth Planning and Trust Provider Programme We are immensely proud of our achievements, in relation to our innovation, our thought leadership, our Strategy Awards Outstanding Young Private Bankers (Open to private bankers aged 40 or below) industrywide recognition, our demonstrable product differentiation, the diversity of our client base, and the calibre of Outstanding Wealth Manager – Customer Relationship Service and Engagement Outstanding Private Banker – Asia-Pacific our partners. Outstanding Private Bank for Growth Strategy – Outstanding Global Private Banker Organic Rising Star for Asia-Pacific 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, MotoNovo Finance, Think Money 20 y June 2017 www.privatebankerinternational.com Group and Toyota Financial Services.

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Intelligent Environments is an international provider of innovative mobile and online solutions for  nancial services providers. Our mission is to enable our clients to deliver a simple, secure and effortless digital experience 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, MotoNovo Finance, Think Money Groupwww.privatebankerinternational.com and Toyota Financial Services. June 2017 y 21

PBI 345.indd 21 10/07/2017 10:33:31 IE Adverts - 2017.indd 1 21/12/2016 11:53:36 Hear Network Discover Celebrate SHAPE THE FUTURE OF PRIVATE BANKING Private Banking Switzerland 2017 12th December 2017 The Marriott, Zurich

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Recognising regulatory changes and trends in private banking this year Identifying the needs and preferences of today’s clients Next generation banking and how it is evolving How is digital shaking up the wealth management industry? Family O ces: How can they continue to succeed in today’s market? The importance of conduct risk at London’s private banks Brexit: how will this shape the future of private banking in Switzerland and Europe

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