wealth management may2011 school of business administration heg-fer fribourg marc lussy

8/4/2019 Wealth Management May2011 School of Business Administration HEG-FER Fribourg Marc Lussy

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Guest Speaker

Marc Lussyobjtec GmbHSenior ManagerSchoenenbergstr. 1008820 Waedenswil ZH

[email protected]

[email protected]

More than 20 years experience in Banking

Trader, Relationship / Portfolio Management and Project Manager


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Why do wealthy individuals needadvice to manage their assets?


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October: This is one of the particularly dangerous months to speculatein stocks. The others are July, January, September, April, November,May, March, June, December, August and February. Mark Twain


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Market shares global AuM(on- and offshore)

1

Total around 110 trillion USD


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Market shares AuM offshore

Total around 7 trillion USD


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Importance of Wealth Managementfor a Global Bank

Core Results Credit Suisse by Division in Billions 2007 - 2010

-15

-10

-5

0

5

10

Private Banking

Investment Banking

Asset Management

Shared Services

2007 2008 2009 2010


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V 1.014 Wealth Management...2 lessons @ 45 min.

Roles in Wealth Management

RelationshipManager(RM)

PortfolioManager

Analyst Trader

InvestmentConsultant

TaxSpecialistFinancial

Planer


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Role Relationship Manager (RM)

Relationship managers are the customer service giants that own thecustomers, know everything about them, manage that knowledge as anasset, and are able to meet the full complement of financial needs. [Ernst& Young ]


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Key Activities of an RM

Client retention

Make sure that existing clients stay with the bank

Client selection Identify profitable clients

Client Acquisition Increase client base


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Key skills and Know-how neededto be a successful RM

Profound product know-how

Social Skills

Sales Skills

Knowledge of compliance regulations

Know-how IT Tools

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Mandate types 1/3

Advisory Mandate Client makes investment decisions himself

RM provides specialists expertise and currentmarket information

Client follows the markets on a regular base

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Mandate types 2/3

Trading / Investment Consulting Mandate Client makes investment decisions himself

Short term approach Active Trading

Market sentiment is more important than fundamentals

Relationship Manger / Investment Consultant provides trading ideason a daily base

Client follows the markets on a daily base

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Mandate types 3/3

Discretionary Mandate Relationship / Portfolio Manager makes investment decisions

Relationship Manager informs the client several times per yearabout development of the portfolio

Client does not need to follow the markets

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Types of banks in Wealth Management

Global banks with private banking units

Traditional offshore focused private banks

Traditional onshore focused private banks

Retail or affluent focused local banks

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Classification of clients Onshore (assets are managed in country in which owners of assets are resident)

Offshore (assets are managed country in which owners of assets is not resident)

Retail

Institutional

Affluent (less than $1million but more than $100,000 )

High Net Worth Individuals ($1million to $50 million)

Ultra High Net Worth Individuals (more than $50 million)

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Advisory approach Analysis Financial concept

Profile Strategy Implementation

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Wealth Management2 lessons @ 45 min.

Advisory approach - Analysis

Investments Get an idea of size and asset types

Wealth creation Inflows such as earnings on assets, salaries, expected inheritance

etc.

Liabilities Current and future financial obligations

Expenditures

Living costs, regularly payments, tax payments etc

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Advisory approach Financial concept Channeling and visualization of gathered information including clients

asset and liabilities, annual income and annual spending

The financial concept must reflect the clients overall situation

Allows the RM to provide his client a personalized investment solution


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Advisory Approach Client profile 2/3

Risk abilityIt defines clients ability to cope with financial losses without a noticeable

effect on their standard of living

Risk toleranceIt defines how a client deals emotionally with investment risks

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Advisory Approach Client profile 3/3Service profileIn order to suit different client requirements it is very important to

understand which services he needs and to define an according serviceprofile

Possible service profiles are:

Advisory mandate Investment consulting Discretionary mandates

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Advisory Approach Strategy

Risk profile Investment strategy

Low

Moderate

High

Enhanced

Medium

Fixed-income

Income-oriented

Balanced

Captial-gains-oriented

Equitities


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Wealth Management the past Strong banking secrecy

Main goal of a lot of clients was tax optimization

Performance of limited importance

Clients had limited access to market information (

Newspaper)

Clients were loyal to the their bank


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2 lessons @ 45 min.

. . . the future

?

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CRM Tools in Wealth Management 1/3

Operational CRM market operation

Analytical CRM

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Portfolio

Issues

- Get a new copy of passport due 25.5.11

- Needs to sign risk disclosure due 31.12.11

- Invite for gulf turnament

Performance

Remarks05,1,11Became father

10,2,11Would like to invest in commodities

15,3,11Plans to transfer more money

20.4.11Wife had car accident

Client dataName

Birthday

Riskprofile

Cliensince

Monthly reports

Hobbies

Name wife

Number of Children

Responsibel RM

Relations with other clients

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Where can a CRM add value?

Measure activities

Analysis of current situation

Identification of target clients

Manage sales activity

Quick access to client information

Consulting

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Wealth Management . . . the futureThreats Weaker banking secrecy

Regulations Decreasing margins Increasing costs Increasing quality standards

The way forward New markets (BRICS / Emerging Markets) Increased effort for client retention

Increased tool support (CRM, product selection) BPO (Business Process Outsourcing) Mergers / take overs of smaller banks

wealth management may2011 school of business administration heg-fer fribourg marc lussy

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