private banker - verdict · 2019-12-16 · devere group. ed miliband’s promise to scrap the...

The French connection

PRIVATE BANKERApril 2015 Issue 319 www.privatebankerinternational.com

•Strategy: Next Gen wealthy clients•Interview: Lloyds Bank Private Banking•Alternative investments: Luxury goods

•Country survey: Netherlands

Head of Société Générale Private Banking talks about what it entails to have the private bank at the heart of the Group

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WealthInsight provides detailed data and insightful analysis on the world’s High Net Worth Individuals (HNWIs) and wealth sector. With decades of experience providing business information, WealthInsight helps organisations make informed decisions and win new business.

AAt WealthInsight’s core is our proprietary HNWI Database of the world’s wealthiest individuals. Around this database we have built a number of valuable research based products and services that make WealthInsight much more than just a rich contact list.

We work with and provide solutions for: Wealth Managers Private Banks Family Offices Technology Providers Professional Services – Consultants, Accountants, Lawyers, Real Estate Professionals Fund Managers, Asset Managers, Venture Capitalists Non-profits and Educational Institutions

For more information contact us at [email protected]: +44 (0)207 406 6553

Connect to Wealth Through Intelligence

About WealthInsight

IAB 545v2.indd 25 20/02/2015 16:55:07

PBI 319.indd 2 30/04/2015 14:30:38

April 2015 y 1www.privatebankerinternational.com

ANAL

YSIS

EDITOR’S LETTERPrivate Banker International

To be or not to be... CONTENTSNEWS

2: NEWS DIGEST

8: NEWS BRIEFS

12: TECHNOLOGY ROUND-UP

13: REGULATION ROUND-UP

14: LIQUIDITY PROFILES

15: PEOPLE MOVES

ANALYSIS

3: WEALTHINSIGHT COMMENTS: UK ELECTIONS 2015

FEATURE

COVER STORY 4-5: SGPB INTERVIEW

For the head of Société Générale Private Banking, Jean-Francois Mazaud, positioning the private bank at the heart of Société Générale Group has been the key to growth. This strategy has led to SGPB finding successful synergies within the group, enabling it to retain its traditional, customer-centric niche alongside embracing a digital transformation. Meghna Mukerjee finds out more in an exclusive interview

6-7: STRATEGY: NEXT-GEN FOCUS

John Schaffer speaks to industry experts about current next gen issues and how wealth managers are approaching the young and the wealthy

9: ALTERNATIVE INVESTMENTS: LUXURY

Wealthy individuals are synonymous with luxury purchases. As the demand for luxury goods strengthens, John Schaffer investigates if this market is driven merely by indulgence or strategic investment opportunities

11: INTERVIEW: LLOYDS BANK

With 25 years of industry experience, Markus Stadlmann, CIO of the wealth and mass affluent division, is steering Lloyds Bank towards success. Meghna Mukerjee reports

COUNTRY SURVEY

10: NETHERLANDS

The growth of HNWIs in the Netherlands has contributed to one of the highest levels of wealth inequality in Europe. John Schaffer looks into a WealthInsight country report

COMMENT

16: DEVERE GROUP

Ed Miliband’s promise to scrap the non-domicile tax status should get Labour into power at the general election in May is naïve, reckless and ill-conceived, writes Nigel Green, founder and chief executive of deVere Group

Follow Private Banker International

Search for @BankerNewsSearch for ‘Private Banker International – Timetric Financial Services’

WealthInsight provides detailed data and insightful analysis on the world’s High Net Worth Individuals (HNWIs) and wealth sector. With decades of experience providing business information, WealthInsight helps organisations make informed decisions and win new business.

AAt WealthInsight’s core is our proprietary HNWI Database of the world’s wealthiest individuals. Around this database we have built a number of valuable research based products and services that make WealthInsight much more than just a rich contact list.

We work with and provide solutions for: Wealth Managers Private Banks Family Offices Technology Providers Professional Services – Consultants, Accountants, Lawyers, Real Estate Professionals Fund Managers, Asset Managers, Venture Capitalists Non-profits and Educational Institutions

For more information contact us at [email protected]: +44 (0)207 406 6553

Connect to Wealth Through Intelligence

About WealthInsight

IAB 545v2.indd 25 20/02/2015 16:55:07

Over the past couple of months, one bank that we definitely could not have ignored is HSBC.

It was the tax evasion scandal regarding HSBC’s private banking unit in Switzerland that got the industry talking since February, and now the bank continues to be in the news for reviewing the location of its headquarters.

The lender has recently ordered a review into whether or not it should move its head-quarters out of Britain and, potentially, back to its former home in Hong Kong.

HSBC started in Hong Kong as the Hong Kong and Shanghai Banking Corporation, and only moved to the UK after taking over the Midland Bank in 1993.

The announcement of the rev iew unsurprisingly received a warm response in Hong Kong immediately, but the British government has remained silent so far. Other locations being considered by HSBC, report-edly, are financial centres such as New York and Singapore.

HSBC is not the first big bank to consider moving its operations out of London – Stand-ard Chartered may consider a similar move. Tougher regulation, higher taxes, and sharply increasing house prices in the UK have com-bined to raise costs for banks and their staff in an already complex and competitive envi-ronment.

HSBC, in fact, has often spoken out in criticism of regulations and additional taxes imposed on British banks post the financial crisis. In a recent speech to investors, HSBC chairman Douglas Flint said:

"We are beginning to see the final shape of regulation and of structural reform, includ-ing the requirement to ring fence in the UK. As part of the broader strategic review taking place, the board has therefore now asked man-agement to commence work to look at where the best place is for HSBC to be headquartered

in this new environment."HSBC’s review announcement comes weeks

before UK’s general elections (7 May) and will have a big potential impact on The Conserva-tive Party, Britain’s current ruling party, and the opposition, Labour Party.

UK’s Prime Minister, David Cameron, has pledged to hold a referendum on Britain's European Union (EU) membership if his Con-servative party is re-elected. However, Flint also singled out in his recent speech to inves-tors the difficulties and threats of Britain with-drawing from the EU. This could be a deciding factor.

Labour's plans to raise taxes on banks if it comes to power may also influence HSBC.

Flint, though, has denied playing politics, adding that the board only decided to launch the review after shareholders urged HSBC to consider its domicile. Shares in HSBC were also boosted as the potential move away from the UK is being reviewed.

Flint said, though the work is underway, the question of moving is a "complex one and it is too soon to say how long this will take or what the conclusion will be”. But the answer could potentially lead to several complexities as well - for the UK.

If it decided to move but keep most of its staff in Britain, a shift in HSBC's headquarters would not have a major impact on Britain's tax revenues per se. But it would certainly be a significant dent in the UK’s as well as London’s position as a centre for finance.

A move could also trigger other banks to follow, which would further weaken London's status as a global financial hub.

Time will tell where HSBC takes it head-quarters, but for the moment it is certain that we will be talking about the bank for a while to come.

Meghna Mukerjee [email protected]

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2 y April 2015 www.privatebankerinternational.com

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SDIGEST Private Banker International

STRATEGYUBS to review Australian wealth-man-agement unit

Swiss banking giant UBS is set to carry out a review of its Aus-tralian wealth-management arm, that may result in a sale of the unit.

The move comes after the group’s global wealth-manage-ment unit registered lower-than-expected earnings in the fourth quarter.

Australian Financial Review quoted UBS Australia wealth management head Mike Chisholm saying that the issues to be highlighted in the review include management structure and the technology platform.

However, people familiar with the issue said that the pro-cess may or may not result in a sale of the business.

RESEARCHOver 50% of wealthy individuals want to give more to charity

Two-thirds of high net worth (HNW) philanthropists feel a sense of responsibility to give and half would like to give more, according to a survey by JP Morgan Private Bank.

The private bank conducted a poll in conjunction with its sponsorship of the Beacon Awards, which promotes phi-lanthropy in the UK.

Approximately 91% of the philanthropists surveyed state that finding a cause that they care deeply about is the key driver for getting involved. Approximately 39% of HNW philanthropists also say they get involved in a particular charita-ble cause because they believe they can make a visible differ-ence.

The survey of 47 HNWIs and ultra-high net worth indi-viduals (UHNWIs) found that 56% would like to give more to charitable causes than they currently do; 48% give more than 5% of their total wealth to charitable causes; 35% give more than 10% of their total

wealth to charity; 69% were first inspired to start charita-ble giving because of a sense of responsibility to do so; and 30% donate because they wish to give something back to the commu-nity.

Rebecca Eastmond, head of philanthropic services EMEA at JP Morgan Private Bank, said:

“These findings also show that effective philanthropy creates a virtuous circle - the more posi-tive impact your gifts make, the more committed you will likely become.”

Eastmond told PBI in January 2015 that HNWIs and UHN-WIs are becoming “really stra-tegic” with their giving.

STRATEGYNBAD to expand wealth management business in Africa and AsiaNational Bank of Abu Dhabi (NBAD) is reportedly targeting Africa and Asia to expand its wealth management business in order to maintain strong growth.

The decision comes as the bank aims to offset competition in traditional banking product lines in the UAE and diversify its product offering into areas pre-viously dominated by interna-tional lenders, reported Reuters.

According to the news bul-letin, NBAD’s wealth manage-ment strategy aligns with the bank’s larger aim to expand through eight banking hubs it seeks to set up in major cities from West Africa to China.

The bank is planning to open its first office in Mumbai, India, in July this year.

NBAD global banking chief investment officer Gary Dugan told Reuters: “We have a love affair with India.“In terms of our asset alloca-

tion, for developed markets we are tactically positive and over-weight on Europe and Japan on a hedged basis, and in emerging markets, India is our big bet.”

According to Dugan, China will not be on the bank’s radar because of its huge debt, the defaulting on bonds by banks

and other warning signs.Dugan added: “China has to

do something big, a massive fis-cal boost that could add vibran-cy to Asia.”

M&AUniCredit, Santander inch closer to merge their asset manage-ment unitsI t a l i a n b a n k U n i C r e d i t and Spanish banking giant Santander have moved closer to a deal to merge their asset man-agement businesses.“We are nearing (a deal with

Santander) and I hope there will be a positive announcement soon,” UniCredit CEO Federico Ghizzoni was quoted as saying by Reuters.

Santander Asset Management and UniCredit’s Pioneer Invest-ments unit started negotiations about a merger in September 2014.

However, talks were inter-rupted by the death of Santander chief Emilio Botín last year.

The deal, valuing the merged group at about €5.5bn, is likely to be finalised and announced shortly.

According to media reports, Pioneer’s US operation will be stripped out from the combina-tion and will be in a separate unit jointly owned by the Italian bank and the US private equity groups.

By selling control of Pioneer, UniCredit will no longer include its assets in its accounts, boost-ing its common equity tier one ratio.

RESULTSCredit Suisse private banking, wealth arm Q1 pre-tax income down 18%Credit Suisse’s private bank and wealth management unit posted a pre-tax income of CHF834m for the first quarter of 2015, down 18% compared to a pre-tax profit of CHF1.01bn a year earlier.

N e t r e v e n u e s w e r e CHF2.97bn, an 8% dip from

net revenues of CHF3.24bn posted a year ago.

The unit’s total operating expenses stood at CHF2.10bn, down 4% as against CHF2.19bn in the corresponding quarter of 2014.

Overall, the Swiss group’s net income attributable to share-holders reached CHF1.05bn for the first quarter, a 23% rise compared to net income of CHF859m registered in the prior year.

Credit Suisse CEO Brady Dougan said: “We delivered another quarter of strong and consistent performance. Wealth Management Clients generated a particularly strong result, with improved margins, increased profitability and good net asset inflows from key growth regions.”

PRODUCTS AND SERVICESInvestec Wealth & Investment introduces private office service

UK-based Investec Wealth & Investment (IW&I) has launched Private Office, a new service for individuals with net worth of at least £10m.

The service will cater to HNW clients, business owners, entre-preneurs and investors with complex financial needs.

Private Office will offers access to the services of the wider Investec Group and will provide a range of services, both onshore and offshore, which have traditionally been available only to clients with a significant-ly higher net worth.

Andrew Butler-Cassar, a HNWI investment specialist, will lead the service, supported by a core and growing team of 19 professionals.

Investec Wealth & Investment divisional director of Private Office Andrew Butler-Cassar said: “Private Office addresses a clear market need for an inte-grated service targeting success-ful entrepreneurs and business owners, the sports and media sectors and those specialising in alternative finance such as pri-vate equity or hedge funds.” <

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WEALTHINSIGHT COMMENT: UK ELECTIONS 2015Private Banker International FEAT

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Welcome to the monthly instalment of news and views from PBI’s sister company, WealthInsight – the leading provider of business intelligence for the wealth sector

The EU and future prospects for British millionaires Decisions in the up-coming general election will not only determine the future of

the British economy but also affect Britain’s faith in the EU.

As inflation falls to zero and unemployment hits a record low of 5.6% in April

2015, the UK’s economic future is rather positive. Stronger growth in the eurozone

area will be facilitated by the European Central Bank’s €1.1trn asset purchase stim-

ulus programme. Item Club, a non-governmental forecasting group, predicts the

UK economy to grow by 2.8% this year.

Despite the fact that the UK’s economy is in good health, the upcoming gen-

eral election is a chance for voters not only to decide which political party should

implement their economic policies, but who will determine the UK’s international

trade links. Do British citizens willingly wish to stay in the EU, as proposed by the

Labour Party, or do they prefer to cast their vote for the EU membership in 2017,

as outlined by the Conservatives?

Approximately 40% of world trade takes place within the EU; and the EU itself

is traditionally the UK’s largest trading partner with total exports amounting to

£41.3bn and total imports as large as £44.2bn, giving deficits of £2.9bn in Febru-

ary 2015.

Germany, The Netherlands and France are among the three biggest EU trading

partners where Britain largely exports industrial machinery, pharmaceuticals and

transport equipment.

However, trade deficits in goods with the EU countries are being offset by trade

surpluses with non EU countries to reduce the overall trade deficits. Exports of

services such as banking and financial services, IT and other consultancies are

increasingly being generated with non-EU trading partners such as the US, Swit-

zerland, China and the United Arab Emirates. Interestingly, these non-EU trading

partners are growing, some more than others, hence providing greater potential

for services export markets.

There were just over 699,000 high net worth individuals (HNWIs) living in the

UK in 2014, the majority of whom are based in London. That number is projected

to reach over 720,000 in 2016 with a combined total wealth of over $2.9trn. HNWIs

are often mobile, with access to international links and foreign business owner-

ships. By being in the EU, London’s HNWIs will benefit from a larger market and

greater pull of labourers speaking different languages.

What is interesting for the future prospect of UK wealth is that the UK investor

visa is seen as a gateway to do business in Europe. The visa is granted to those

investing at least £1m in the country and intending to stay for three years there-

after.

A referendum on the EU might see US banks such as Bank of America, Citigroup

and Morgan Stanley move some London-based activities to Ireland amid fears that

the UK is drifting apart from the EU. However, by not being part of the EU, the

removal of EU Financial Regulations and EU Bonus Cap can potentially make the

UK more financially attractive, giving the country autonomy over its own financial

destiny. Wealthy voters indeed have a tough decision to make.

Dr Roselyn Lekdee, Economist, WealthInsight [email protected]

Come What May (2015)As election warfare intensifies between now and 8 May, Britain’s wealthy will be looking to shield themselves from crossfire between a nationalistic right and anti-rich left.

With worries that hostile taxes might send millionaires to other shores – as per Francois Holland’s 75% wealth tax – WealthInsight has put together its own election guide for Britain’s wealthy. From trawling all the main party manifestos, we have identified five key policies that might affect UK HNWIs depending on the election outcome:

1. Wealth TaxAlthough no ‘wealth tax’ per se is proposed by any party other than the Greens, Labour’s proposal to reintroduce the 50p top rate of income tax for earnings over £150,000 is effectively one in disguise. Meanwhile the Lib-Dems intend on rising capital gains from 28% to 35%. The Conservatives, however, would alleviate one of the biggest wealth taxes around – inheritance tax – by increasing the threshold to £1m.

WI View: One of the key findings of the WealthInsight-powered World Wealth Report, released in February, showed that handing wealth to the next generation was the most worrying issue among UHNWIs today. The report’s Wealth Attitudes survey revealed that 85% of wealth advisors said that handing down wealth to the next generation was their clients’ key concern.

2. Non-domsBritain’s 116,000 ‘non-doms’ have suddenly become an election talking point follow-ing Labour’s announcement that the unique tax status would be abolished.

WI View: Second only to the issue of succession in the Wealth Attitudes survey was increased taxation: In this year’s World Wealth Report, 81% of wealth advisers said that potential increases in wealth taxes would make their clients consider re-locating to another country. Additionally, tax was highlighted as the main reason UHNWIs would consider moving to a different country.

3. Bonas TaxAlready under fire by EU regulation, bankers’ bonuses are now under attack by the Labour Party, which proposes a 50 per cent bank bonus levy. The Lib Dems, on the other hand, want a five percent tax rise on shareholders’ dividend payments.

WI View: Most high-grossing industry executives have been in fear of their bonus-es ever since ‘banker bashing’ came into vogue. However, since most HNWIs owe their wealth to company shareholdings – not bonuses –the tax is unlikely to affect many outside the upper-echelons of big financial corporations.

4. Mansion TaxMansion tax’ has been a leftist buzz-word for the past few years as Labour and the Lib Dems have separately honed their plans to tax the owners of Britain’s most expen-sive homes.

WI View: The frequency with which mansion tax is discussed by property-buying HNWIs shows the jitters that the notion has caused. Its introduction could see a major re-haul of many investment portfolios as UHNWIs seek to downscale their property exposure.

5. De-CentralisationAll major parties are proposing some sort of decentralisation of power away from London. The Conservatives have their ‘Devo-Max’ and ‘Devo-Manc’; while Lib Dems have their “Northern Futures Project” and Labour has proposed, more long-windedly,

“the biggest economic devolution of power to England’s great towns and cities in a hundred years”.

WI View: London has long been increasing its lead as the millionaire capital of the UK (it had 289,500 HNWIs in 2014. It’s nearest rival, Edinburgh, had 7,461). With decentralized power comes devolved industry and, perhaps, we may start to see a trickle of wealth to other cities in the UK.

Oliver Williams, Head, WealthInsight [email protected]

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INTERVIEW: SOCIETE GENERALE PRIVATE BANKING Private Banker International

Société Générale (SocGen) Group celebrated its 150th anniversary in 2014. This French banking giant has been traditional yet innovative in its

private banking operations, keeping on top of industry changes and raising its game.

At the helm of the private bank is CEO Jean-Francois Mazaud, who came into his current role in 2012. His sharp, vibrant and engaging persona comes through in the way he has strategised the growth of Société Générale Private Banking (SGPB). Mazaud thinks outside the box and is not afraid of doing things differently to the competition.

Positioning the private bank at the heart of the SocGen Group has been the core of his business strategy.

The strategy leverages on all of the Group’s strengths – interconnecting the private bank to its retail networks as well as making more of its link with the Corpo-rate and Investment Bank (CIB). By doing so, there “is tremendous potential for value creation via synergies”, believes Mazaud.

He explains: “In France, we decided to enter into a new project with the retail bank whereby we would host customers who had a minimum of EUR500,000 in their account with us. We divided our initial wealth threshold by two, but we still hold twice the threshold that some of our closest competi-tors have.“The net result has been that in 2014, after

two years of preparation, we launched a new private banking model in France and reported EUR50bn of assets under manage-ment (AuM) at the end of 2014, growing from EUR20bn of AuM in 2013.”

The growth has indeed been exponential for SGPB in France. From 3,000 households in 2013, the private bank moved to 40,000 households in 2014. Additionally, going from a presence in 8 big cities in France in 2013, SGPB has increased its presence to 80 cities, leading to a complete change of scale in the country. “Our promise to customers is to retain

the high level of service, expertise, and our custom-made approach. That required us to train 165 bankers who joined the private bank from the retail network in one go last

year, and adapt our tools and products to the new customer base that we want to service, as well as give them a smooth entry into the private bank,” says Mazaud.

At a time when other banks are reducing their branch numbers, SGPB has decided to

“occupy the field” with a link to approxi-mately 2,300 branches across France. Mazaud believes that despite customers’ changing preferences towards digitalisation of services, there is a strong need for physical proximity.“The physical link is extremely important,

not only with existing clients but also to gain new customers. SocGen is the bank for entrepreneurs and we need to be present in the countryside – to be close to these cus-tomers where they want to sell and trans-fer money to the next generation. It’s not true that wealth is only represented in Paris. There is entrepreneurship and value creation in the countryside as well,” he adds.

International blueprintThe success of the partnership with its retail network in France led the way for SGPB to roll out the same model other in countries where SocGen has a retail customer base. Two similar projects were completed in Morocco and Croatia over the last two years.“Obviously the wealth segmentation is

not the same as what we have in France. Typically, we start the segmentation with EUR200,000,” Mazaud informs.

In Morocco, SGPB has launched branches in cities such as Casablanca, Marrakesh to name a few. In Croatia, SGPB has already started offering structured products that have been greeted with “great success”.“We must also remember that the bankers

coming in are from the retail network and are being trained to private banking. The build up has to happen at a pace that is rea-sonable, to cope with the deployment of the products and services.“We have other projects underway to com-

plement SocGen’s existing retail networks in other countries,” says Mazaud.

Links with CIBHaving previously been the deputy head

of global finance at SocGen’s CIB for four years, the increased collaboration with CIB is important to Mazaud as an axis for SGPB’s rehoned strategy.

Though the private bank has always called on specific parts of the investment bank – including its structured products business – for product, Mazaud’s aim has been to see increased introductions to primary market issues, IPOs, rights issues and bond issues, alongside links with M&A, private equity and financing.

Mazaud informs: “About three years ago – when it came to primary bonds – we did almost nothing. In 2013, there was a bit more than EUR2bn of demand for primary bonds, but in 2014 the demand was more than EUR3bn. We saw a steep increase in the demand for primary bonds, and the progress made in primary equity, real estate and pri-vate equity go in the right direction.”

On the back office and IT side as well, SGPB has decided to pool services with CIB, in order to benefit from its “innovation and good practices”. “We are also benefitting from bargaining and innovation power.“SGPB has an independent strategy, which

is different to the buy side research of CIB. We can formulate a different fundamental view of markets and, as a consequence, rec-ommend a different asset allocation. As far as products and solutions are concerned, we operate an open architecture model, where our aim is to find the best of breed to serve our customers. This can lead to recommend-ing solutions which are not “home-made”, even for structured products,” he adds.

Technology focusFurther to the back office enhancements, SGPB has three pillars to put its all-round IT rejuvenation plan to action.

The first one is the transformation of its digital or customer interface, whereby SGPB links all its products and services to the customers through a series of applications (apps). The second IT-plan pillar is about data storage around the customer informa-tion they have. The third pillar is around data analytics.

SGPB’s digital transformation journey

Finding strengths and synergiesFor the head of Société Générale Private Banking, Jean-Francois Mazaud, positioning the private bank at the heart of Société Générale Group has been the key to growth. This strategy has led to SGPB finding successful synergies within the group, enabling it to retain its traditional, customer-centric niche alongside embracing a digital transformation. Meghna Mukerjee finds out more in an exclusive interview

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INTERVIEW: SOCIETE GENERALE PRIVATE BANKINGPrivate Banker International

entails the deployment of a sophisticated e-banking platform for wealthy clients so that they have the full spectrum of options to transact – “bonds, shares, forex, money market, whatever the asset class”.

SocGen in France already has a mature e-banking app, which is famous with cus-tomers with over 35m app downloads and counting.

Beyond France, SGPB Hambros in the UK launched its new e-banking platform this month. Through an improved Client Relationship Management (CRM) tool and enhanced portfolio management system, the new e-banking platform provides clients with better navigation capabilities and flex-ibility in accessing information such as port-folio valuations, positions and performances.

SGPB in other countries is looking to launch new e-banking platforms as well over the course of 2015 and 2016. The aim is to complete the digital transformation project in 2017 for all of SGPB’s locations.“What is interesting is that we devised this

project from scratch. You can navigate from a tablet to a computer to a mobile phone smoothly. The client experience will be simi-lar from one device to another. We have been working with our partners to do that from the start.“This is a significant advantage vis-a-vis

competitors as some built their solutions for the PC only and when they wanted to expand it to the tablet or mobile phone, it created difficulties in the implementa-tion phase because the ability to navigate smoothly was not defined from inception.”

The security attached to all the systems is of utmost importance, says Mazaud, and SGPB has spent time defining strict security rules.“Our digital transformation is a long jour-

ney and it will take a few years to be fully implemented but it is exciting and creat-ing positive energy within the team,” adds Mazaud.

Geographical roadmapIn terms of geographical growth strategy outside France, the priority has been to focus on SGPB’s core markets, namely UK, Bel-gium, Luxembourg, Monaco, Switzerland and Dubai. Like many other global private banks, SGPB has continued to sell-off or consolidate its businesses in certain coun-tries to gain a stronger foothold or retreated from markets of least strength. “We had to make choices about the markets where we want to be,” explains Mazaud.

In October 2014, South East Asia's largest bank by assets, DBS, successfully completed the acquisition of SocGen’s Asian private banking unit, comprising its Singapore and

Hong Kong businesses, in a $220m deal. Mazaud is confident in this partnership.

“In Asia, the nature of the market was such that we either needed to invest and double our size to be relevant to our customers or exit the market. We decided to go for the latter, while partnering with DBS and we are very satisfied with the outcome. DBS too has significantly upgraded its private bank-ing position in the market through this deal. DBS is a regional leader, they have strong links with the corporates, they have a uni-versal banking model, and are very similar to SGPB in EMEA.”

Within the framework of its partnership with DBS, SGPB has also set up an arrange-ment whereby if customers from Europe want to move to Asia, they can choose DBS as a port of entry and conversely DBS can do the same with its customers who are moving to Europe.

With increased costs of compliance and doing business, Mazaud reiterates the impor-tance of choosing the markets in which a pri-vate bank wants to operate.“We are better off being strong and impact-

ful with our customers in a smaller number of countries where we make the difference. We will see this trend increasing in the years to come and that may entail external growth in our target markets, if and when we believe it makes sense for us,” he says.

Staying on top of changeLike other banks, keeping up with the chang-ing regulatory environment is key for SGPB.“One important point of focus at present is

the preparation for the automatic exchange of information, as decided by OECD coun-tries in 2014 and to be implemented in 2017.“We want our customers to understand

that SGPB is strongly committed to tax transparency. We have been expressing that through the general terms and conditions of our branch networks, which have been adapted to express the level of disclosure we require. We have also been pro-active in cor-respondence with our customers to promote this level of conduct,” says Mazaud.

Structuring policies for bankers and set-ting the do’s and dont’s is equally important for SGPB. “We have to be permanently vigi-lant,” he adds.

According to Mazaud, the aim going forward is to continue maximising the synergies within SocGen group and to be the relationship bank of preference for cus-tomers, alongside being a reference player in the markets it has chosen. The target is also to be in a position to “progress through the cycles and absorb the shocks”.

When Mazaud joined the private bank, his first objective was to discover the peo-ple, and the readiness of the SGPB teams to embrace change “surprised” him positively, as he had viewed the private banking world to be a ‘conservative’ one from the outside. “The willingness of our people to change

has been across generations and it comes from the conviction that if the strategy is right the change will be good for the bank and our clients. For me this demonstrates strength in the business and I’m satisfied by that,” says Mazaud. <

Jean-Francois Mazaud, SocGen

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STRATEGY: NEXT-GEN FOCUS Private Banker International

The future generation of wealthy individuals are a significant potential client segment that every private bank wants to impress, engage and retain.

For private banks and wealth management companies, Next Generation strategy is becoming increasingly important, leading to a customised and dynamic approach.

However, private banks are also facing several challenges with this client segment. In an environment of fierce competition, how are wealth managers differentiating themselves to keep the Next Generation interested?

Wealthy baby stepsKnowing that children of their high net worth (HNW) and ultra

high net worth (UHNW) clients will need assistance to manage the wealth that they are set to inherit, private banks aim to get involved in the lives of the Next Gens from a young age. It is in the interest of both heirs and wealth managers to make contact before the transfer of wealth happens.

Wealth managers have contrasting views on how early a child should be involved in the wealth management process, as some feel the information could be an “unnecessary burden” on the children.

Duncan MacIntyre, head of Coutts private office, says that Coutts involve the next generation at “quite an early age”. The private bank aims to instil the family values of its clients through consultations. MacIntyre tells PBI:“We use philanthropy as our first stage of introducing children to

money. Many of our clients will establish charitable foundations or indeed give money directly to charities.“From quite a young age, we see children of our clients giving

money to charities they care about and then thinking about the impact they can have. I think that is a good way of starting the initial process of thinking about money in terms of the joys it can give you, but also in terms of the responsibilities and difference it can make.”

Paul Knox, head of wealth advisory EMEA at JP Morgan Pri-vate Bank, suggests that wealthy parents want to involve their chil-dren early to make them aware of the responsibilities of inheriting wealth.“We are seeing parents wanting us to speak to the children at a

younger age, maybe even as young as 19 or 20.“The parents want to make sure their children understand not

only about money management, but about their tax responsibili-ties and why it is important to be orderly around the wealth that they have.“It might not be that they want to burden children with all the

responsibilities of wealth at that stage. But if for whatever reason the child actually has wealth in their own name and responsibili-ties, then parents do want to make sure that the children under-stand those responsibilities.”

Private banks and wealth managers can influence the Next Gen

by providing services such as seminars and networking events for young affluent clients. Coutts organises the Future Leader Pro-gramme, directed at 20-26 year old children of the private bank’s wealthiest clients.

MacIntyre says: “We only take a maximum of 30 people through the programme every year and it’s a programme that we do in conjunction with Wharton Business School.“It’s all about real education and trying to help the next genera-

tion with the responsibility of which they will inherit. 20 years old is the first time that we will engage with them directly without their parents being there. The alumni that have been through the programme have found it to be incredibly powerful.”

David Wilson, head of strategic analysis group at Capgemini, tells PBI that developments in technology have also benefited the next generation of wealthy individuals in terms of information gathering.“The one thing that is working in advisors’ favour is that, even

from a very young age, because of the internet and familiarity with technology, younger HNWIs or to be HNWIs are learning about subjects themselves. They arguably could have a higher level of initial foundation knowledge on a different topic, as well as be potentially more reachable in a manner that is more tied to tech-nology as opposed to trying to get them in a room, which may be a bit harder to do.”

Digital is the industry 'blind spot'In the digital age, mobile apps and social media are key for engage-ment of the younger generation.

There has been a rise in digital provisions amongst private banks. Credit Suisse, for example, announced its updated private banking app in March 2015 for customers in the Asia-Pacific region. How-ever, the traditional perception of the private banking industry is one that is centred on personal connections with relationship managers (RMs), especially if there is an existing long lasting fam-ily relationship through multiple generations.

In the case of wealthy individuals where wealth is earned rather than inherited, the loyalty to old wealth management institutions could be questionable.

Wilson tells PBI that digital channels are a “blind spot in the industry”. Wilson makes reference to a Capgemini and RBC report, titled The World Wealth Report 2014, saying: “If you take the current landscape, especially the more mature markets, it is more or less correct that HNWIs like to speak to an advisor face to face.“However, the blind spot is where it gets transferred to the next

generation. One of the things that we found in the world wealth report is that HNWIs prioritise digital capabilities over face to face interaction. Two thirds of HNWIs on average said they would leave their firm if they couldn’t have an integrated channel experi-ence that encompasses digital as well as face to face and that rises to 80% for younger HNWIs.”

Fostering lasting relationships with the Next GenDeveloping meaningful and lasting relationships with the next generation of wealthy clients, before the transfer of wealth actually takes place, is a priority for private banks. John Schaffer speaks to industry experts about current next gen issues and how wealth managers are approaching the young and the wealthy

PBI 319.indd 6 30/04/2015 14:30:41


FEAT

URE

STRATEGY: NEXT-GEN FOCUSPrivate Banker International

Although there is an assumption that digital channels are aimed at the next generation demographic, a 2014 UBS report titled ‘Think you know the next gen investor?’ suggests that millenials “are actually no more likely than other generations to use online services for key financial advise”.

Although there is a clear demand for digital provisions in the wealth management and private banking sector, personal connec-tions are still of paramount importance. Private banking cannot have the same reliance on digital channels as consumer finance.

David Durlacher, head of relationship management at Julius Baer in London, says:“Technology advances have revolutionised financial services over

the past 5-10 years, and Julius Baer is also investing in these devel-opments. But the personal relationship between a client and their RM remains critical, regardless of what technology is used.“Within our innovation management we follow, of course, fin-

tech developments closely but at the core, people do business with people, regardless of generation. While technology is of genuine importance - perhaps more so for the Next Gen - our main asset at Julius Baer remains our people and their ability to advise, to educate, and to engage.”

MacIntyre feels that technology advancement and personal rela-tionships can work hand in hand and are not “mutually exclusive”.

He tells PBI: “Actually one enhances the other and makes everyone more effi-

cient. If you want to make a payment at midnight you can do it at midnight or you can call our 24 hour banking service. But you might want to have a business meeting about wealth structuring or how to deal with wealth succession. These are value and advisory conversations that are difficult to replicate in a digital medium.”

Although it is clear that the private banks want to involve the Next Gen from an early age, it is not always the case that the children would need to be given much information about their parents’ wealth.

MacIntyre says: “They [the Next Gen] don’t need to know the details of what their parents have. Its an interesting point of friction because disclosure doesn’t mean that it gives you knowl-edge or the tools for how to deal with the successful transition of wealth.”

Conversely, Knox believes that some disclosure is required for a successful transition to take place. “On the whole, you want to be able to tell your children enough so that the amount of wealth is not a total shock, as and when the time comes for them to take on the responsibility of managing it.”

Specific details of parent’s assets can be more significant where there is a family business involved in the transition of wealth. Wil-son says: “You want to make sure that there is an aligned family decision about whether that business continues in its current form or whether the child sells out of the business. Then, in which case, how are you going to make it a stable transition for employees and shareholders?”

Earned vs inherited wealth mindsetsThere can often be differences between how different benefactors approach succession planning. Wealthy individuals who are from multi-generational affluent families may feel an obligation to pass the wealth on to their children. The wealth may also be tied up in large family estates.

Where the wealth has been earned, HNWIs may give more of their money away to a charitable cause. In the majority of cases they are likely to set their children up stably, by paying for educa-tion and often assisting with the purchase of a property. The afflu-ent individuals who have earned their wealth often also want to instil a sense of entrepreneurial drive into their children.

MacIntyre says: “As a multi-generational inherited wealth, you are the custodians of the wealth and that does bring with it a responsibility to make sure that you’re preserving and looking after it. If you’ve created the wealth yourself you have the right to use it in a more flexible way, because its something you’ve actually toiled to create.”

Low DriveWith the expectation of inherited wealth, there is a potential for future HNWIs to have low levels of drive and aspiration. There is also a significant potential for the wealth to be squandered, as in a majority of wealthy families the wealth has been eroded by the third generation.

Knox says: “Low drive has always been a challenge for the wealthy, going back many years to the trust fund generation, where certain beneficiaries had been getting regular payouts and hadn’t had to earn it.”

Many of the wealthy benefactors trial an early transition of wealth to their heirs. This allows the parents to monitor how their children deal with the responsibility of wealth before an eventual transition.

The process allows for contact with professional advisors and general experience of the wealth management process.

Philanthropy is also a way in which the next generation can be incorporated into the transition process. Philanthropy can instil a sense of family values as well as giving heirs a purpose if they do not have any particular business acumen.

Knox says: “Philanthropy can be a good way of encouraging children to go out and have a think about what causes are impor-tant to them, and if they were to have it, giving strategy. Philan-thropy is not just about giving, it’s about having a more active involvement in activities and finding out what they feel passionate about.” <

n ASSET ALLOCATIONS

Non-Mille

nials 0

20

40

60

80

100

StocksFixed IncomeCash%

Millenials

Other

16%

46%

15%

23%

13%

28%

7%

52%

Source: UBS - Investor Watch Q1 2014: Think you know the Next Gen Investor?

PBI 319.indd 7 30/04/2015 14:30:41


NEW

SBRIEFS Private Banker International

Only 19% of HNWIs would follow their RMs to new firmsOnly 19% of high net worth (HNW) clients would pursue their relationship manager (RM) if they moved to a differ-ent wealth management firm, according to a report by Scorpio Partnership, NPG Wealth Management and SEI.

The resu lts f rom the whitepaper, Futurewealth 2015: The art and science of relationship management, indicate that HNWIs are biased towards their firms rather than their RMs.

Out of the 3,113 wealthy individuals who were surveyed, 62% said that they would choose to stay with their existing firm, whilst 17% would consider follow-ing their RM to a new firm but would keep their options open.

The staying power was strongest in Europe where 69% of clients said they would remain with their organisations despite their RM leaving, and the weak-est staying power was represented in the Americas (56%).

Although, through the whitepaper results, firms appear to have an advan-tage in the balance of power, RMs who were rated as ‘very good’ by their clients

attained greater levels of loyalty from them. The report also reveals that there was almost a 50:50 chance of HNWIs fol-lowing their RMs in these instances.

Sebastian Dovey, managing partner at Scorpio Partnership, said: “Clients recog-nise that it is typically more than just the banker. However, it is a fine balancing act between the banker and the bank. Notably, for bankers with higher satisfaction rating scores, the appeal of following the banker is still a relatively strong option among cli-ents.”

Geographical differencesGeographically, 36% of the report’s sam-ple group live in Asia Pacific, 46% live in the Americas and 17% live in Europe.

According to the Futurewealth 2015: The art and science of relationship man-agement report, the area for improvement is collaboration between the RM and the firm to provide access to the information and guidance needed to make informed investment decisions. Almost half of the HNWIs felt that this was lacking, and approximately 51% of clients in Asia Pacif-

ic, particularly, felt this way.For 59% of HNWs surveyed, it is the

direct responsibility of the RM to improve their financial situation. For a further 42% and 37% respectively, the principal activ-ity is to provide investment education and deliver market updates.

Cultural nuances Cultural nuances mean that this strate-gic role of RMs is accentuated in certain regions. The report finds that, in the Americas, 42% of wealthy clients believe that the RM should create their financial strategy. In Europe, where mentoring is more core to the RM’s function, this is lower – at 30%. In Asia Pacific, there is more focus on receiving market updates.

Marc Stevens, CEO at NPG Wealth Management, said that HNWIs hold their RMs “directly responsible for their wealth creation efforts.”

He added, “It is therefore crucial that wealth management firms can support front line staff with the resources and insight they need on a broad variety of products and services.” <

RBS finalises sale of Coutts International to UBPRoyal Bank of Scotland (RBS) has agreed to sell Coutts International to Union Bancaire Privée UBP SA (UBP), after numerous months of negotiations.

RBS will continue to service private bank-ing and wealth management responsibilities in the UK and the deal will affect client bases in regions including Switzerland, UAE and Singapore.

On 20th March 2015, PBI reported that UPB and RBS were close to forging a deal.

As of 31 December 2014, Coutts Inter-national’s assets under management (AuM) were approximately CHF32bn ($33.1bn) and total risk weighted assets were CHF2bn. The price paid will be determined in part by AuM on closing.

UBP, a Swiss private bank headquartered in Geneva, has assets under management of

CHF 98.7 bn ($102.8bn), as of January 2015.There had been industry speculation of a

$600m deal to acquire Coutts International after RBS put the private bank up for sale.

The resulting capital benefit to RBS is expected to be modest after writing off good-will related to the business and taking into account anticipated exit and restructuring costs.

In the Q1 2015 results, the business to be sold will be treated as a disposal group, resulting in an expected charge in the order of £200 million, primarily relating to the good-will write off. Initial closing of the transaction is envisaged in Q4 2015, when a majority of the business is expected to transfer, with the remainder during the first part of 2016.

RBS, in August last year, unveiled plans for the sale of Coutts’ international unit.

In October, RBS hired Goldman Sachs to oversee the sale process and formally began taking bids for Coutts International in December.

Coutts International formed a majority of RBS’s private banking operations, with the unit housing $36bn of roughly $50bn in assets that the entire business manages.

Alison Rose, CEO, commercial & private banking at RBS said: “Following an exten-sive review, it was clear that the bank we are building would not be the most appropriate owner of the business being sold.“There will be no interruption of service

for clients of Coutts or Adam & Company and we remain committed to improving all aspects of our market leading businesses.”

The transaction is subject to regulatory approvals <

PBI 319.indd 8 30/04/2015 14:30:41


FEAT

URE

ALTERNATIVE INVESTMENTS: LUXURYPrivate Banker International

It is no surprise that wealthy individu-als are associated with expensive cars, extravagant watches and an all-round luxurious lifestyle. Luxury goods can be

viewed as part of the alternative asset class but their investment potential is questionable when compared with traditional investments.

The Wealth Report 2015 by Knight Frank, published in March, indicates that the luxury market performed well over a long period (2004-2014). However, findings from Digital Luxury Group suggest that interest in luxury goods has been stagnating and even decelerat-ing in certain areas over recent months.

Although the investment potential of luxu-ry goods are attractive to wealthy individuals, Raoul Beck, chief operating officer at Digital Luxury Group Intelligence, tells PBI that the luxury market can be volatile.“Auction records can be misleading, and the

markets for art, luxury watches and estate jewellery are cyclical. In the 2008 market crash, prices dropped by double-digit percent-age points.”

It can also be difficult to predict the value of individual pieces of jewellery or art, espe-cially if purchases are driven by passion. Avid collectors could arbitrarily target specific items, making the market unpredictable.

Luxury goods also suffer from a lack of liquidity. Investors will also incur substantial commission costs from outlets such as auc-tion houses and will be prone to taxation.

Beck says that the value of luxury goods is intangible: “The value is in the brand, artist, history. Thus many people underestimate the effective cost of tax and insurance. Further-more, branded goods such as luxury watches and jewellery lose much of their value the moment the client steps out of the shop.”

Several wealthy individuals can gain access to the luxury goods market through their

private banks, for pure investment purposes. Funds such as JP Morgan’s Consumer Trends Fund and Pictet’s Premium Brands Fund, incorporate luxury goods into their portfolios.

The funds are positioned to clients as rela-tively high risk ventures, with a significant reliance on demand from emerging markets. Because of this, the funds potentially leave themselves open to political, regulatory and economic instability.

Alexandre Mouthon, client portfolio man-ager at Pictet in Geneva, tells PBI: “From 2011 to 2013 the luxury segments did extremely well because we benefited from the exceptional growth of emerging markets and especially China as consumers in the region started to purchase luxury goods.”

However, Mouthon adds, the surge in demand for luxury goods has “normalised” in the past two years, due to China’s crack-down on corrupt and suspicious spending.

Mouthon says the Premium Brands Fund, created in 2007 and over $1bn in size, is pop-ular with clients as they identify themselves with many brands that are being invested in, such as LVMH and Dior. “They like the story of premium brands. They understand it well, the fact that around the world you have the emergence of the middle class, not only China but elsewhere in Asia, Latin America, and Russia are consuming more premium goods.”

The art world has always had a close rela-tionship with the ultra wealthy. With many of the Old Masters’ works exceeding $100m in value, art is seen as an alternative investment segment. Experts from Christie’s auction house, however, say that the market is driven by passion purchases.

Olivier Camu, deputy chairman of impres-sionist and modern art at Christie's, tells PBI that the amount of art bidders at the auction house has grown and become more interna-

tional. "There are many more collectors that can afford to bid at over $50m/$100m than there were 20 years ago. We expect bidders from US, China, the Middle East and Europe."

Xan Serafin, sales director and senior vice president of post war and contemporary art at Christie’s New York, adds: “A lot of the high prices we are seeing are because you have the established clients as well as the emerging clients. It’s creating that perfect storm right now because they are all compet-ing for the best works.”

The rise of wealthy individuals from emerg-ing markets have changed the geographical demographic of art buyers. Camu says that in some auctions, 18% of sales are from Chi-nese bidders. The Chinese market also creates a new breed of art collectors who have not originated from inherited wealth. The rise of the self made wealthy has led the exclusive art world to have a wider scope, which is why “the middle and the entry level market has been as strong as it is”.

Although the growth in demand for art highlights investment intentions of bidders, buyers are not purchasing art with the inten-tion of a re-sale in the near future, according to Camu. “There was a speculative bubble in 1989, fuelled by the Japanese mainly. We would see works being bought and resold at auctions within 12 months. Now, collectors keep their art. If one keeps something for 10 years or more then it's not speculation.”

Much like the art market, classic car pur-chases are fuelled by passion. Knight Frank’s Wealth Report 2015 shows that the invest-ment index for classic cars has grown by 487% over a 10-year period (specifically 16% increase in 2014 and a 47% surge in 2013). The impressive and consistent growth in the market makes classic cars an attractive alter-native asset class. <

Passion, investment and the luxurious lifeWealthy individuals are synonymous with luxury purchases. As the demand for luxury goods strengthens, especially in countries such as China, John Schaffer investigates if this market is driven merely by indulgence or strategic investment opportunities

n PERFORMANCE OF THE KNIGHT FRANK LUXURY INVESTMENT INDEX BY ASSET CLASS, Q4 2004 TO Q4 2015

Furniture WatchesChinese

CeramicsColoured

DiamondsJewellery Stamps Coins Wine Art Classic Cars

12 Month performance

-9% 4% 9% 2% 2% 3% 13% 7% 15% 16%

5 Year performance

-25% 49% 46% 73% 35% 34% 92% 38% 61% 140%

10 Year performance

-28% 68% 69% 167% 168% 195% 232% 234% 252% 487%

Source: Knight Frank: The Wealth Report 2015

PBI 319.indd 9 30/04/2015 14:30:41


COU

NTR

YSU

RVEY

NETHERLANDS Private Banker International

The Netherlands is the 6th largest economy in the eurozone and has a total population of just under 17,000 people. The small, densely populated

country has moderate unemployment and inflation rates and its GDP stood at $722bn, as of December 2014.

The Netherlands has traditionally had an open economy; the level of trade with other countries is very significant. Because of this, the Dutch economy suffered during the finan-cial crisis. This was in partly due to Dutch banks having high exposure to US mortgage backed securities. After 26 years of growth, the Dutch economy fell foul to its reliance on the international finance sector and interna-tional trade, as the economy contracted by 3.5%.

According to the WealthInsight database, there were approximately 187,190 HNWIs residing in the Netherlands in 2014. The value of the wealth amounted to $752.3bn.

Core millionaires (mid and lower tier millionaires with wealth between $1m and $30m) account for 98.5% of HNWIs in the Netherlands. However, core millionaires accounted for only 65.6% of HNWIs’ wealth.

Wealth inequality is particularly high in the Netherlands. According to a 2015 report from CPB Netherlands Bureau for Eco-nomic Policy Analysis, the highest 10% own approximately 70% of the wealth. How-ever, this figure is less unequal when capital, including privately-owned houses and pen-sion entitlements, is taken into consideration.

Income tax levels are relatively high in the Netherlands. The 42% bracket starts at €33,589 ($36,053) and the 52% bracket starts at €57,585. However, other tax breaks can potentially favour wealthy individuals as there is no capital gains tax. Instead, there is a 1.2% fixed rate wealth tax on financial assets worth over €21,139.

Regional wealth growthWealthy individuals are mostly located in the Netherlands’ major cities such as the capital Amsterdam, where approximately 30,000 HNWIs reside. There are exceptions such as Bussum, a town located in the north of Hol-land with a total population of over 30,000,

that has a high HNWI population density of 4.6%. However, WealthInsight predicts that Bussum will have the lowest growth rate of HNWIs over the next five years in compari-son to other Dutch regions.

The growth of the population of HNWIs has been most evident in Rotterdam where the wealthy population grew by 8.3%, ris-ing from 6,551 in 2010 to 7,092 in 2014. In 2014, the total growth of HNWIs in the Netherlands was 3.0%, following an increase of 2.4% in 2013. WealthInsight forecasts a growth of 13.0% by 2019.

Wealth management industryDifficulties that arose due to the 2008 financial crisis presented challenges for the Dutch private banking industry, due to poor economic growth and low inflation paired with Foreign Account Tax Compliance Act (FATCA) regulations and fines for some of the largest banks’ breaches of sanctions.

However, although the wealth management and private banking industry has faced chal-lenging conditions globally, the Dutch market is one of the most technologically advanced in the world attracting both local and foreign institutions. The Dutch wealth management market holds $752.3bn in wealth.

The growth in the Netherlands’ wealth management and private banking sector over the past ten years has been fuelled by growth in personal wealth and the volume of HNWIs and UHNWIs in the region.

The wealth management industry is domi-nated by domestic banks in the Netherlands. The largest player is ABN Amro Private Banking, with local assets under management (AuM) of $157,865. The private bank also has a strong presence globally, with a total of $253,020 in AuM.

Other significant domestic private banks in the region include ING Private Banking and Van Lanschot Private Banking.

Asset allocation preferencesEach wealth segment reacted differently to the changes in the economy, which is reflect-ed in their asset allocations. Dutch UHNWIs tend to have greater holdings in alternative investments and business interests, whereas

core millionaires tend to place majority of their assets in cash and property.

Equities were the most significant asset class for Dutch HNWIs in 2014, account-ing for 25.9% of total HNWI assets. Real estate and business interests were also popu-lar investments with 25.1% and 24.2% of assets being allocated respectively. Other asset classes included fixed income (10.7%), alter-natives (8.1%) and cash (6.0%).

According to WealthInsight data, alterna-tive assets held by HNWIs decreased between 2010 and 2014 from 8.6% to 8.1% of total assets. In contrast, HNWIs allocations to commodities grew from 2.0% to 2.1% dur-ing the same period.

However, WealthInsight forecast a dip in commodities allocations by 2019, reaching 1.7% of total HNWIs assets. This is due to a forecasted drop in demand for raw-materials in the Chinese market, causing a knock-on effect on global commodity prices.

Hedge funds, real estate investment trusts, private equity, structured products and deriv-atives together constituted 5.2% of total HNWI assets in 2014, and 64.2% of alterna-tive assets. These allocations decreased from 68.6% in 2010, and are expected to decrease to 4.7% of total HNWI assets and 65.3% of HNWI alternative assets by 2019. <

Wealth in a liberal stateFor a country that prides itself on an egalitarian society, the Netherlands has a large proportion of wealthy individuals. The growth of HNWIs in the region has contributed to one of the highest levels of wealth inequality in Europe. John Schaffer looks into a WealthInsight country report to find out more

n DUTCH HNWI ASSET CLASS COMPOSITION 2010 - 2019

0

5

10

15

20

25

30

35

Alternativ

es

Real Estate

Fixed Income

Equities

Cash & Deposit

s

%

Business

Interests

201020142019 (Forecast)

Source: WealthInsight - Netherlands Wealth Report 2015

PBI 319.indd 10 30/04/2015 14:30:42


ANAL

YSIS

LLOYDS BANKPrivate Banker International

In October 2014, Markus Stadlmann took over as the chief investment offic-er (CIO) of Lloyds Banking Group’s (Lloyds) wealth and mass affluent divi-

sion. For Stadlmann, the ex-Barclays Wealth discretionary head, it has been a “warm start” at Lloyds.

Recently, Lloyds gauged the challenges facing the financial markets and refreshed its strategic asset allocations.“We made several changes. For instance,

we excluded commodities from our long term investment portfolios just when the oil price decline happened, so that was well timed,” Stadlmann tells PBI.

According to him, the strength of Lloyds Bank Private Banking lies in its focus on con-duct and superior advice. “We go to extreme lengths to make sure we provide the right kind of advice. Our clients think favourably about the banking products we offer as well.”

Lloyds is also catching up quickly on the investments side, says Stadlmann.

In his previous role at Barclays, Stadl-mann looked after portfolio management teams globally and specialist investment teams, alongside overseeing the relation-ship between Barclays and investment man-agement firm BlackRock. This experience comes in handy for Stadlmann considering Lloyds’ strategic relationship with Aberdeen Asset Management (Aberdeen).

Lloyds’ Scottish Widows Investment Part-nership (SWIP) business and related private equity and infrastructure fund manage-ment business was acquired by Aberdeen in November 2013 (completed in April 2014). Aberdeen entered a long-term strategic rela-tionship with Lloyds that aims at a stronger asset management offering for all customers.

According to Stadlmann, the partnership successfully leverages both Aberdeen’s and Lloyds’ strengths.“Lloyds, up until now, hasn’t been a major

investment organisation - thus the strategic alliance with Aberdeen. More clients appre-ciate that.“Aberdeen is an equity house - especially

strong in emerging markets equities. I have interacted with Aberdeen for a long time and what was surprising to me was that they also

have a lot of fixed income capabilities. These are newer areas that have evolved in the last 10 years. They are also strong is quantitative asset management,” he says.

Stadlmann explains that it is important for the investment process to start where the advice process ends.“At Lloyds, client treatment is hugely

important. We want to make sure we are ahead of the curve in how we manage the best conduct with clients and be the best bank for customers.“The first thing we do is look at the risk

attitude of the client and also other informa-tion that comes from the advice process.“The banker will hand us information

around where the client fits in terms of risk tolerance but also give us ideas about their attitude towards markets. We get informed around things like, are they sophisticated? Do they have experience? All this gets fac-tored into the investment process.”

Lloyds conducts in-house research around how markets will perform over the next 10 years, starting with economic considerations

- inflation, economic growth, profit growth - and stretching out towards valuation meas-ures for different asset classes. Once the esti-mations are in hand, Lloyds simulates differ-ent outcomes over the next couple of years, and chooses the best one, while keeping in mind the worst case scenario.

On the other hand, Aberdeen has both medium and short dynamic asset alloca-tions, looking at three to 12 months expec-tancy that isn't influenced by Lloyds. Aber-deen also selects investments individually.“They then create portfolios abiding by

the seven risk profiles and the seven strate-gic asset allocations that we have. We pick it up again thereafter - do the governance, reporting, performance measurement and such. Out of the seven steps of the invest-ment process, four are our job and three are Aberdeen’s job,” explains Stadlmann.

In 2013, Lloyds sold its international pri-vate banking business to Swiss bank Union Bancaire Privée (UBP) as part of its strategy to focus on the domestic wealth market. The business that remains is mainly in the Chan-nel Islands, which is relatively small.

For Lloyds, the same seven risk profiles apply to both UK and international clients.

“The distribution of clients, however, across risk profiles will be different for internation-al customers as their risk appetites differ.”

For the UK investor, real estate and equi-ties are the chosen asset classes, informs Stadlmann.“The typical UK investor is UK focused

and they look to us to provide some interna-tional diversification within the real estate portfolio, which we do.”

On the equity side, a lot of UK investors have relatively concentrated portfolios - typ-ically having 35-50 stocks - and they look for experience as they “want to understand how we think about these companies and their stocks”, making equities a constant topic in client conversations.

UK clients are relatively risk loving and comfortable with high percentages of equi-ties in their portfolio, says Stadlmann, add-ing that there are differences in the way peo-ple think about risk.“Bonds are interesting to our clients as well.

We strongly emphasise that it's also impor-tant, in terms of risk diversification, that cli-ents have fixed income (FI) investments in their portfolios," adds Stadlmann.

Stadlmann explains that in the current environment, with increasing number of countries having negative interest rates, short-term interest rates will not rise sig-nificantly. Thus short duration fixed income allocations are still of value.

The year 2014 was a difficult year for active asset managers. Stadlmann calls it one of the three most challenging years, the other two being 1998 and 2011.

There were several reasons behind this. “Firstly, almost everyone got the interest rate forecasts wrong. Secondly, we had some unknown unknowns, such as socio-political issues with Russia and Ukraine that affected financial markets.“Thirdly, the volatility of several asset

classes were low, meaning there was little opportunity for asset managers to differen-tiate themselves. Fourthly, in 2014, we had poor performance of small cap stocks in the UK, US and other countries.”

However, going forward, equities contin-ue to look “promising and interesting”, says Stadlmann. He also says that bonds have low returns in the current market. “There can be huge differences in income derived from holding the equity or the corporate bond of the same company.”

There is clearly an opportunity, now, at Lloyds Bank Private Banking to do more interesting things with existing wealthy cli-ents than simply banking, but “banking will always be the core”, sums up Stadlmann.<

Allocating for success: Lloyds BankHaving always had a strong foothold in the advice and products segments, Lloyds Bank Private Banking is catching up quickly on the investments side as well. With 25 years of industry experience, Markus Stadlmann, CIO of the wealth and mass affluent division, is steering Lloyds Bank towards success. Meghna Mukerjee reports

PBI 319.indd 11 30/04/2015 14:30:42


NEW

S

SOLUTIONS

Client One Securities selects First Rate’s wealth management solutionClient One Securities, a full service broker dealer and registered investment advisor, has chosen First Rate’s ARKON as its integrated wealth management solution.

According to First Rate, the solution will empower Client One Securities to support its practice and client relationships from a single platform, facilitating CRM capabilities, email archival, file archival, client portal and practice management.

ARKON will encompass First Rate’s reporting capabilities directly within the CRM offering quick access to client returns, allocation as well as practice branded performance reporting.

Client One Securities president Mike Tuma said, “We were initially looking for a reporting solution to support the efforts of our advisors. Once we delved deeper into combining client reporting, customer relationship management (CRM) capabilities and practice

management, it seemed like a natural fit to choose First Rate’s ARKON.”

Client One Securities will also roll out Lightning, First Rate’s turnkey client reporting solution, within the ARKON structure.

TECHNOLOGYSJP to move its entire IT infrastructure to cloudSt James’s Place (SJP), a UK-based wealth management firm, has started a project to migrate its entire IT infrastructure to Amazon Web Services (AWS), to meet scalability requirements and focus on its core financial business rather than data centre management.

The move is expected to reduce time spent on operating data centre infrastructure to support the f irm’s several enterpr ise applications, computerworlduk.com has reported.

St James’s Place head of division for IT operation Andy Montgomery said, “We don’t want to focus on infrastructure and we don’t want to focus on managing data centres - our key business is wealth management, that is what we do, that is what we are good at,” he said. “Amazon

provides a wrapped set of services that we can leverage to build applications on.”

The migration to the cloud started in 2014 when the IT unit was asked to manage a programme of change during a short time, which required multiple environments to be built.

The firm, which has around £5.2bn of funds under management, has now moved its IT infrastructure to AWS, using a virtual private cloud (VPC) connection, with nearly 85% of its systems in the cloud.

The firm is currently using AWS to manage a diverse range of software, such as its Microsof t Exchange environment, intranet, many enterprise applications and analytics tools.“We also run our CRM, our data

warehouse, and all of our business processing systems apart from one legacy one in AWS. We don’t run Redshift right now but it is something we are aspir ing to do,” remarked Montgomery.

The legacy data centre of the company, which comprises nearly 15% of its overall IT estate, is connected to the AWS virtual private cloud through a “fast, low-latency, high bandwidth, direct connect pipe.”

TECHNOLOGY Private Banker International

More Tech Headlines

Banque Pictet & Cie taps Calypso’s collateral management solution

Avaloq, DBS, Leonteq and Numerix partner to create platform for structured products

Genpact launches new wealth management platform

Fidelity launches new solution for mass affluent investors

FolioDynamix launches new version of its unified wealth management technology platform

Lonsec rolls out product rating tools for financial advisers

KPMG, Microsoft collaborate for analytics, cloud offerings

Let’s talk technology: monthly update

SG Hambros launches new eBanking platformSociété Générale Private Bank-ing Hambros (SGPB Hambros) has launched a new eBanking platform as part of a three year IT project that was launched in 2013.

The eBanking service, avail-able on mobile, tablet and desk-top allows clients to access their portfolio valuations, positions

and performances. The private bank state that there have been security improvements as well as better navigation facilities to assist in accessing financial information.

SG Hambros, the UK subsidi-ary of Société Générale, is also upgrading its office based tech-nology systems as part of the

three-year IT project. The pri-vate bank is investing in a Client Relationship Management tool and a portfolio management system in order to improve face to face interactions.

SGPB Hambros CEO, Eric Barnett, says: “Since 2013, we have launched a series of client-centric initiatives in order to

ensure that we are effectively able to meet clients’ needs. The launch of our new eBanking platform is the next natural step in this direction and we are excited about the prospect of offering clients more secure and easier online banking access anywhere, anytime and on any device.” <

UBS to open technology lab in LondonSwiss banking giant UBS is plan-ning to open a technology lab in London to explore and experi-ment with the utility of block-chain technology in the financial services industry.

In its new innovation lab, UBS will investigate blockchain, the underlying technology behind bitcoin, and other distributed ledger technologies along with

smart contracts and work on potential new applications.

The UBS lab will enable its research team led by financial technology specialists to col-laborate with other experts and innovators tackling industry-wide challenges including the management of complex data and risk assessment in volatile markets.

The innovation lab, due to open in April 2015, will be housed at FinTech accelerator Level39 in Canary Wharf.

UBS group CIO Oliver Bussmann said: “By establish-ing a dedicated innovation lab at Level 39 we are moving away from a purely in-house innova-tion strategy, optimising collab-oration opportunities with the

growing FinTech business, start-up and investor community, in an open and transparent way.“Our innovat ion lab at

Level39 will provide a unique platform to explore emerging technologies such as Block-chain and crypto-currencies and also to understand the potential impact of these for the industry.” <

PBI 319.indd 12 30/04/2015 14:30:44


NEW

S

REGULATIONPrivate Banker International

The latest in regulation

A monthly round-up of the big regulatory announcements that impacted the private banking and wealth management industry across the globe

SEI rolls out global framework for managing compliance SEI has introduced SEI Firm Compliance, a new global regulatory management framework that equips investment organisations to oversee and orchestrate compliance functions firm-wide, across investment products and regulatory jurisdictions.

SEI’s Investment Manager Services (IMS) division developed the compliance framework as an add-on to the customized global operating platform it provides to its investment manager clients.

SEI’s offering takes a new approach, in that it centralizes an investment firm’s internal and outsourced compliance functions in a single management framework tailored to the user’s mix of business activities.

SEI has incorporated the compliance framework into the Manager Dashboard of SEI’s global operating platform, so executives can access and manage a firm’s entire range of compliance activities right from their desktops.“Staying on top of a complex, ever

changing regulatory landscape has become a daunting task, especially for alternative managers and global investment organizations,” said Steve Meyer, executive vice president of SEI and head of SEI’s Investment Manager Services division. “SEI Firm Compliance is designed to help investment managers rein in the escalating resource drain, non-compliance risks, and personal liability resulting from the industry’s fast-growing body of regulation.”

SEI’s regulatory analysis has identified close to 500 financial regulators, exchanges, and industry groups around the globe, each with its own requirements.

The new offering is the latest in a series of compliance services SEI has introduced over the past two years.

Those services include automated filings of Form PF for alternative managers and Form CPO-QPR for commodity pool operators, as well as regulatory reporting to meet requirements of the Foreign Account

Tax Compliance Act (FATCA) and the EU’s Alternative Investment Fund Managers Directive (AIFMD).

HSBC may move headquarters from London, signals bank’s chairmanBritish banking giant HSBC may consider moving its headquarters from London after the regulatory environment becomes clearer, observed the bank’s chairman Douglas Flint.

According to Bloomberg, Flint in a shareholders meeting in Hong Kong said: “We are beginning to see the final shape of regulation, the final shape of structural reform and as soon as that mist lifts sufficiently, we will once again start to look at where the best place for HSBC is.”

HSBC has faced calls from shareholders to shift its domicile away from the British capital after the government increased the levy on banks' balance sheets for an eighth time since 2010.

The European lender has paid £750m in bank levy taxes in 2014, the most of any UK bank.

Standard Chartered, another bank headquartered in London, has been facing questions from shareholders about moving outside the UK.

Taiwan releases new regulation for offshore managersTaiwan’s Financial Supervisory Commission (FSC) has published a new set of laws to further regularise fund distribution for offshore asset managers.

As per the new law, offshore asset managers are required to have no less than NT$5bn ($161m) in AuM in Taiwan or should outsource at least NT$3.5bn worth of their AuM to local counterparts if they carry out fundraising or fund distribution on the island state, Asia Asset Management reported citing a report published by the Commercial Times.

The new directive, which aims to encourage offshore players to be more committed to the local market, will come into force in April 2017.

The existing offshore fund plan that has proved to be damp with only two offshore managers having qualified for the programme, required the managers to meet a defined set of criteria. This includes increasing their investments and improving their quality of service to benefit from faster approvals for retail launches and waivers of derivative product restrictions.

Gibraltar Private Bank & Trust under US Attorney’s Office probeGibraltar Private Bank & Trust is being probed by the US authority for its compliance with the Bank Secrecy Act and anti-money laundering requirements.

The investigation is being carried out by the U.S. Attorney’s Office and the Department of Justice’s Asset Forfeiture and Money Laundering Section, reported the South Florida Business Journal.

The bank had earlier been slapped with a penalty of $65m as a settlement to victims of Ponzi schemer Scott Rothstein. Rothstein used Gibraltar as well as TD Bank to hold trust accounts for his clients.

The disclosure of this probe comes after a consent order at the end of last year, from federal banking regulators. The order highlighted steps that the bank must take to regain compliance with BSA regulations.

Infrastructure sukuk challenge significant but achievable: FitchThe G20 group of nations’ decision to examine the use of sukuk to finance infrastructure investment, could eventually spur a big increase in the size of the market, said Fitch Ratings.

But several significant challenges would need to be overcome first, most importantly finding a legal structure that would be acceptable to governments, investors and the sukuk’s Sharia boards.

Infrastructure projects could eventually be a key source of sukuk issuance due to their asset based or asset-backed nature. But so far

infrastructure sukuk have generally been relatively small and locally funded.

Traditionally, infrastructure development has been financed and carried out by government or government linked bodies, or in some regions with private sector involvement through infrastructure project financing.

One of the main uncertainties is whether sovereign issuers will be willing to directly pledge infrastructure assets to sukuk investors or accept the most common structure, known as Ijarah sukuk. In this structure the originator sells the asset to a special purpose vehicle that issues the sukuk. The originator then leases the asset back from the SPV and agrees to buy it back at a future date.

Using Ijarah sukuk could make arranging deals simpler and easier and potentially make them more attractive to investors, particularly as the structure is fairly compatible with traditional project finance.

However, sovereigns may not be willing to adopt such structures if they may risk losing control of the asset or if they do not have the necessary regulation and legislation allowing them to do so. This would result in more work to find an acceptable legal structure or the introduction of new regulations.

A transparent framework that investors, issuers and scholars are all comfortable with and which makes clear the rights of all the stakeholders should help attract the significantly wider investor base that would be needed for major infrastructure projects.

As well as the G20’s initiative, other bodies are also taking steps that could help. These include the Islamic Development Bank’s and the Asian Development Bank’s reported efforts to provide technical assistance and credit guarantees to member countries that want to fund infrastructure projects and the International Monetary Fund’s creation of a working group to build expertise in sukuk.

PBI 319.indd 13 30/04/2015 14:30:44


ANAL

YSIS

LIQUIDITY PROFILES: DAVIS / JACOBS Private Banker International

Liquidity profiles

PBI has teamed up with sister company WealthInsight to provide monthly liquidity events that have piqued the interest of its analysts. This month, Chief Executive Officer of Perficient Inc, Jeffrey Davis, and Executive Vice President and Chief Financial Officer for Hilton Worldwide, Kevin Jacobs

Jeffrey S Davis

Jeffrey S Davis, president and chief executive officer of Perficient Inc., a US-based company operating in the technology sector, has sold 5,209 shares, representing a 0.0151% stake in the company.

The shares were sold on 10 April 2015, at a price of $21.31 each for gross proceeds of $0.11m.

Profile:Jeffrey S Davis was born in 1965 and holds a Bachelor of Science degree in electrical engineering from the University of Missouri and a Master of Business Administration degree from Washington University.

Davis serves as a president and chief executive officer of Perficient, Inc. He served as chief operating officer of Vertecon, senior manager and member of the leadership team of Arthur Andersen’s Business Consulting Practice. He worked for two years with Ernst & Young and Mallinckrodt, Inc. He worked for five years with McDonnel Douglas, and has 13 years of experience in technology management and consulting.

Full Name: Jeffrey S Davis

Known As: Jeff Davis

Gender: Male

Citizenship: US

Languages: English

Liquidity Event: 10 April 2015 sale of 5,209 shares in Perficient Inc for $0.11m

Kevin J Jacobs

Kevin Jacobs is Executive Vice President and Chief Financial Officer for Hilton Worldwide.

Jacobs is a member of the Advisory Board of the Centre for Hos-pitality Research at Cornell University, and a member of the Hotel Development Council of the Urban Land Institute.

Jacobs is a graduate of the Cornell University School of Hotel Administration.

Profile:Kevin J Jacobs, executive vice-president and chief financial officer of Hilton Worldwide Holdings Inc., a US-based company operating in the leisure and arts sector, has sold 13,000 shares, representing a 0.0013% stake in the company.

The shares were sold on 10 April 2015, at a price of 30.91 each for gross proceeds of $0.4m.

Full Name: Kevin J Jacobs

Known As: Kevin Jacobs

Gender: Male

Citizenship: US

Languages: English

Liquidity Event: 10 April 2015 sale of 13,000 shares in Hilton Worldwide Holdings Inc. for $0.4m

PBI 319.indd 14 30/04/2015 14:30:47


PEOPLE MOVESPrivate Banker International NEW

S

n PEOPLE MOVES

Name Moved from Moved to Old position New position

UK Russell Bignall BNY Mellon Old Mutual Wealth Strategic director Business development director

Switzerland Michael Vlahovic Coutts EFG InternationalMember of the general management committee, Russia/CIS

Managing director for private banking in Eastern Europe and Russia

UK Sean Mcguire Standard Life Old Mutual Wealth Investment sales director, Middle East Business development director

USA Michael Levy Morgan Stanley Morgan StanleyHead of merchant banking and real estate investing capital markets

Head of traditional asset management

UK Jeremy Hippolite Kleinwort Benson Standard Life Executive director Head of international business development

Singapore Parminder Soin UBS Singapore Julius BaerUHNW desk head, deputy country head of private wealth management

Market head Indian Subcontinent (ISC), Non-Resident Indian (NRI)

China David Loo Citi Private Bank Lombard Odier Counciller for Phillipenes and China Head of private clients for North Asia

Japan Yoshiyuki Izawa Japan Post Bank BlackRock President and CEOChairman, representative director and country head of Japan

UK David Slade Credit Suisse UBS European head of leverage financeGlobal co-head of leveraged finance and leverage capital markets

Australia John Knox Credit Suisse Credit Suisse Co-head of investment banking CEO Australia

SwitzerlandJames Buchanan-Michaelson

Coutts BarclaysManaging director, member of general management committee

General manager, Swiss private banking

UK Oliver Bilal Pioneer Investments UBS Senior executiveHead of asset management for Europe, Middle East and Africa (EMEA).

UK Jim Willens Brown Shipley Brown Shipley Non-executive director Chairman of its board of directors

Singapore Jonathan Paul Ardmore Park Capital Standard Chartered CEO Head of financial markets

Singapore Sumit Dayal Standard Chartered Standard CharteredHead of leveraged finance and equity capital markets

Head of corporate finance

People moves

This month, Michael Vlahovic moved from Coutts to become the MD for private banking in Eastern Europe and Russia, at EFG International, and Oliver Bilal from Pioneer Investments was appointed head of asset management for EMEA at UBS. Here are all the people moves that have recently made news

PBI 319.indd 15 30/04/2015 14:30:49


COM

MEN

TDEVERE GROUP Private Banker International

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To find out more about us please visit: www.intelligentenvironments.com

We are an international provider of innovative mobile and online solutions for financial service organisations. Our mission is to enable our clients always to stay close to their customers.

We do this through Interact®, our single software platform, which enables secure financial applications, engagement, transaction and servicing across all digital channels. Today these are predominantly focused on mobile, PCs & tablets. However Interact® can and will support other form factors, as and when they proliferate (as seen by our work to develop digital banking for the Smartwatch).

We provide a ready alternative to internally developed solutions, enabling our clients with a faster route to market, expertise in managing the complexity of multiple devices and operating systems, and a constantly evolving solution.

IE-Advert-Dec-2014.indd 1 16/12/2014 12:25:21

The 18th century law, allowing people to live in the UK and claim another country as their permanent home has helped Britain to gain

a colossal global competitive advantage.

It has, as most financial experts agree, helped attract wealthy, talented and suc-cessful individuals who then, of course, pay tax on their UK-based income boosting tax revenues directly and sup-porting the British economy in a myriad of other ways indirectly.

Yet the Labour leader’s announce-ment to abolish the non-dom rule would, according to Miliband, “raise hundreds of mil-lions of pounds” in tax revenue. He claims the law in effect makes Britain “an offshore tax haven” and his plans to scrap it form part of his pledge to ensure people “with the broadest shoulders bear the most.”

Is this naive? Yes, most certainly. It smacks of a total lack of understanding of how things work in the real world.

This move, in my view, is simply a rash, foolhardy attempt at winning votes ahead of 7 May. It remains unclear and exceptionally unconvincing what additional revenue would be raised should this rule be scrapped, but Britain’s global reputation would be jeopard-ised.

Why? The UK has a world-renowned com-petitive tax system which attracts some of the wealthiest, most successful professionals. Yet, by eradicating the non-dom tax status, these high earners – who have the resources to relo-cate relatively easily – will be drawn to com-paratively lower tax jurisdictions.

This is coupled with the fact that major international talent will be deterred from com-ing to Britain in the first place.

Indeed, non-doms pay VAT, capital gains tax, income tax and stamp duty, with some also paying up to £90,000 a year in order to remain in the UK.

According to HMRC statistics, during 2012-2013, 115,000 non-doms contributed £8.2bn to the UK economy, which is equal to the sum raised from some 10m low-rate

income tax payers.It can be reasonably assumed that Ed Mili-

band’s plans would have serious reper-cussions in the City. Internationally

mobile individuals have always welcomed the British capital

as a hub of excellence for global investment, however obliterating non-dom sta-tus could see a repeat of the 1970s, when high earners exited in their droves due to

tax hikes.We could also see a similar

situation as happened in France when President Hollande intro-

duced the 75% tax rate for high earners in his 2012 election campaign, resulting in a mass exodus.

Consequently, the country’s sustainable long-term economic growth will undeniably suffer down the line if these absurd plans goa-head.

Yet Labour considers this to be the price that must be paid.

I vehemently disagree. And it would appear I am most certainly not alone.

Since Ed Miliband set out his party’s mani-festo, consultants at deVere United Kingdom, part of deVere Group, one of the world's larg-est independent financial advisory organisa-tions, have reported a significant number of high net worth clients indicating they would leave Britain if Labour's plans came into effect.

I am not at all surprised by such a reaction to Mr Miliband's proposal, but even I am somewhat taken aback by the speed at which such a large number of people responded. This should set off alarm bells that this policy is fundamentally flawed.

To my mind Labour's proposals are dan-gerous and misguided. It is ludicrous to dis-suade wealthy, employment-creating indi-viduals from moving to or staying in the UK, essentially placing them in an 'adjust or exit' position. Other countries are actively trying to encourage them - we should be doing the same in Britain.

In short, Ed Miliband’s promise to “change Britain” could backfire in a spectacular way.<

Why Labour’s non-dom plans could lead to shattering consequences for BritainEd Miliband’s promise to scrap the non-domicile tax status, should Labour get into power at the general election in May, is naïve, reckless, and ill-conceived, writes Nigel Green, founder and chief executive of deVere Group

PBI 319.indd 16 30/04/2015 14:30:52

Delivering innovative mobile & online financial services solutions to organisations that need to provide secure access

To find out more about us please visit: www.intelligentenvironments.com

We are an international provider of innovative mobile and online solutions for financial service organisations. Our mission is to enable our clients always to stay close to their customers.

We do this through Interact®, our single software platform, which enables secure financial applications, engagement, transaction and servicing across all digital channels. Today these are predominantly focused on mobile, PCs & tablets. However Interact® can and will support other form factors, as and when they proliferate (as seen by our work to develop digital banking for the Smartwatch).

We provide a ready alternative to internally developed solutions, enabling our clients with a faster route to market, expertise in managing the complexity of multiple devices and operating systems, and a constantly evolving solution.

IE-Advert-Dec-2014.indd 1 16/12/2014 12:25:21

PBI 319.indd 29 30/04/2015 14:30:52

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TDBC-Advert-Dec-2014.indd 1 19/01/2015 09:03:48PBI 319.indd 30 30/04/2015 14:30:52

private banker - verdict · 2019-12-16 · devere group. ed miliband’s promise to scrap the...

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