27 December 2017

As private banks change DNA, Pictet thrives

Published by Hubbis– 27th Dec 2017

Long-term strategy survives the test of time as Geneva-based wealth and asset manager bucks the trend by expanding in a contracting market

Few private banks can claim to navigate the wave of consolidation sweeping through the private banking industry without rethinking their strategy, but Pictet seems to be one of them.

The Geneva-based wealth and asset manager has stayed true to its expertise – wealth management, asset management and related services – since it was founded in 1805.

“lt is not in our DNA to be aggressive,” says Caroline Schaedler, head of client relationship management Asia at Pictet Asset Services. “Some of the banks that have multiple business lines are scaling down. For us, that is not the case. We are very simple in structure, we only do wealth management, asset management and related asset services.”

As the firm expands its business in Asia amid surrounding consolidation, Schaedler maintains that her firm sticks to a mindset of building long-term, sustainable relationships with its partners, whether they are individual clients, institutions or independent asset managers, rather than continuously scour the landscape for new clients.

At the same time, Pictet is stepping up its efforts to service independent asset managers (lAMs), hoping to capitalise on the growth of private investment boutiques and multi-family businesses in Asia.

Although the growth in the IAM business in Asia has not been as rapid as expected and the percentage of funds under management is still relatively low, there is a high potential for growth in this segment when foreign banks adopt a strategy that appeals to clients, Schaedler said.

Getting the basics right

Pictet has made considerable progress with IAMs in the region, earning the reputation of being able to simplify complex financial arrangements and manage every aspect of the asset servicing process, leaving the clients free to concentrate on generating portfolio performance or distributing their products.

The demand for fund services continues to grow in Asia, and Pictet finds itself in a sweet spot for  meeting those needs.

“From a regulatory point of view, it makes sense for families to create their own funds, which could be for an individual, one family or a fund for a co-investment with others,” Schaedler said.

The group also takes pride in the ability to provide an open platform that holds an extensive range of products and round-the-clock trading with seamless coverage across all significant asset classes.

While it functions as a one-stop-shop by offering its custody clients trading and fund services, the firm’s offerings can also be tailored into components, to allow flexibility.

“Whatever the IAM needs, we want to provide it. Anticipating the needs and providing more than what is expected is our aim, as well as ensuring that there is a quick turnaround with feedback to any request, either by email, by phone, or in person,” Schaedler explains.

 Technology edge

For a company that is rooted in tradition, Pictet does not play true to type.  A great deal of importance is placed on technology enhancing the customer experience. “We have just improved our dedicated e-banking platform to help our IAMs work more efficiently and save time by accelerating the access to the data they need,” said Schaedler.

“The whole digitalisation process will affect how we build up relationships in the future, even though we pride ourselves on the stability, long-term tradition and heritage that we have had for over 200 years. We cannot turn a blind eye to the changes unfolding before us,” explains Schaedler.

Schaedler adds that digital technologies should not replace human advisors. “The robot is only as good as the human behind it. Technology will not be able to take a decision for you. lt will only be able to make a pre-selection or explain what you should do, but human presence will always be needed,” she said.

As independent asset managers are now facing many challenges with new regulations such as FATCA and common reporting standards leading to increased administrative costs, Pictet wants to help lAMs navigate through this regulatory maze by bringing in professional advice, human resources and information technology necessary to ease the way.

Part of this involves sharing information with smaller lAMs that do not have the vast internal research network of a large group.  “lt is important for us to be there to guide the lAMs. We will share regulatory information with the IAMs and conduct sessions during which we work together to offer solutions to the end client,” Schaedler commented.

At the end of the day, it is still people behind the money, it’s the person behind the account. The human touch should not be downsized. ln fact, there should be even more emphasis on the human side in the future.