In an industry that waits for no man, Jamie Crawley explores what makes a good private banker in 2019.
Private banks are part of a fast-moving industry, in which they must change and develop constantly, and so must their personnel. Whether it be possessing the technical prowess to manage a project, developing a new mobile application or having the knowledge and awareness necessary to advise on impact investments, a diverse skillset is crucial in private banks so they must seek the best and brightest.
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The world is a far more immediate one than it was, say, a decade ago. Thanks to social media, smartphones and wall-to-wall WiFi, news travels and is received far quicker, meaning many people are better informed than their banker.
“Compared to ten years ago, clients are more international more sophisticated and have much greater access to information,” James Penny, head of UK international and Ireland private bank at Barclays tells Private Banker International. “This has to be matched in our banker population and specifically be much more investment literate and aware.”
Meanwhile, Dylan Williams, head of England and Wales at Coutts, spoke to PBI of the importance of private bankers being well connected and well informed. “I think we operate in a very different world today – whether it’s through the internet, whether it’s through news channels, things happen a lot more quickly, because the world’s more connected. An event can happen in Brazil, for example, and reach the UK quickly – advisors today need to be on top of all that, have a very strong macro-understanding of what’s happening in the world and make the complex seem simple because clients have those expectations.”
The kids are alright
Not only are clients now better informed than they were but they are also obtaining wealth quickly at a younger age, something that private banks should reflect in their personnel.
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By GlobalData“We are now seeing experienced and highly proficient banks able to cope with more complex clients earlier in their careers,” James Penny says. “Compared to a decade ago, clients are also making more money at a younger age.”
High-net-worth individuals born since the early 1980s – referred to as millennials – will obviously have a wholly different outlook on life to their forebears and with it a very different view on how they wish to use their wealth and what they expect from their bank.
“Our client satisfaction has increased as a result of focussing on the specific needs of millennials,” Eva Lindholm, head of UBS Wealth Management for UK and Jersey, said to PBI.
In a recent survey by financial services company Wells Fargo, 90% of Generation Z and Millennial children of millionaires said that the most important thing they will inherit from their parents is their values, rather than their wealth. Social consciousness and philanthropic concerns are at the forefront of their financial interests.
Aside from HNWIs getting younger, the gender divide is also becoming more balanced in favour of females.
“The face of wealth is changing, with the rate of growth in private wealth held by women growing one and a half times faster than that of men,” Lindholm said. “We have spent time and effort training client advisors how to engage with them and to explore the important question of ‘What’s it all for?’
“Sustainable investing is resonating really well, particularly with our female and millennial clients, as it enables them to practice the mantra of ‘doing good and doing well.’”
Suddenly private bankers have to build up an expertise in environmental, social and governance (ESG) and impact investing, something that would not have been as prevalent a decade ago.
“Philanthropy and socially responsible investing are very important,” Dylan Williams of Coutts says. “These are the areas where you do see different interests in different generations. I think if you don’t transition your business model in that way for the next generation you get left behind.”
With clients’ expectations increasing far beyond the means of one advisor, there’s a necessity for private banks to have a strong professional network. Should a client require expertise in a field that a private bank doesn’t have, advisors must have the external network to source that expertise from leading firms in that area. “They will be good connectors for their clients – they will be adding value beyond financial services,” Williams adds.
It is worth noting though that this strategy may be held in check by increasing longevity. As life expectancy increases, the older generation are holding on to their wealth longer, offsetting the trend of wealth getting younger.
Old and new
So in this changing world and evolving client-base, what are private banks looking for in their personnel?
James Penny at Barclays says, “We believe that diverse teams perform better and reflect our client base. Above all, we look for interesting, successful and well-rounded people. For an experienced and successful banker, academics are probably less important than a proven and demonstrable track record, but saying that, it would be rare that we see candidates who do not also have first class academics.”
Tobias Wagner, head Zurich branch and member of the executive committee at Société Générale, has spotted a shift in the type of candidates they are now hiring. “If I look into who we’re hiring today I bet 80% are academics,” he told the audience at Private Banker Internatonal’s Switzerland conference in December. “Ten or 20 years ago I bet it was not 50%.”
One unavoidable reality is the need for private bankers with a good deal of digital literacy. Should a private bank, for example, integrate a fintech into its own technological infrastructure, people are needed with the know-how to manage those projects.
While the blitzkrieg of digitization is sure to bring with it fears over the job securities, it should really be seen as an opportunity for private bankers to add to their worth. Clients will still need human advisors, especially in the volatile financial conditions some are expecting this year or in 2020, and so those who can harness the power of fintech with traditional relationship-management prowess will find themselves in high demand.
“The world is multi-channel. You have to attract clients in more ways, whether it’s through text, e-mail, social media, video-conferencing, or face-to-face. Ultimately, though, private banking is about building trust with clients and building strong relationships,” Williams of Coutts says. “So you need individuals who are able to engage with a wide range of personalities, so they need to demonstrate good emotional intelligence, they need to be very good listeners, and they need to be interested in people’s stories, people’s families. Many of these attributes are just as relevant today as they were in the past.”
