An era of investment-focused product pushing private bankers in the past decade displaced the broadly-skilled private bankers of yesteryear, but Pictet director Dina de Angelo thinks a shift back to old school skills is underway. Nicholas Moody hears De Angelo’s views on dealing with complex international families, the importance of women for and to banks and Pictet’s new corporate structure.
Dina de Angelo knows a thing or two about dealing with complex, crossborder families having spent her entire career working with private clients. So when she says a shift is underway in the type of skills required to deal with these clients, it’s worth paying attention. De Angelo joined Pictet as a director in 2008 and is responsible for handling international client relationships. Previously, she was responsible for the international private client division of NM Rothschild in London.
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She now works largely with international clients and seems to, by her own admission; attract very complicated international families with interest all over the world who are looking for complex structuring, family arrangement and tax structures.
In general, De Angelo notes a dramatic change in the nature of wealth, from established wealth to wealth that is being created by first generation wealthy entrepreneurs in their 30s and 40s. The origins of wealth may be completely different, with much new wealth coming from the technological and media world, "the similarity is the time horizons".
"New money’s time horizons are getting much longer. The industry has done a complete 360° and the emphasis is now on putting a team of staff around the client – a movement away from the ‘product push’ mentality," she notes.
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By GlobalDataOld School skills required
Her observations are based on a long industry history. De Angelo started out working for the Phipps Family at Bessemer Trust more than 20 years ago when it opened up to outside clients. She got experience then working with the ultra wealthy. She was brought through the business with bankers who needed a broad set of skills – not purely just investment management – and thinks there is a shift back to a requirement for these old school skills.
"This concept began in the US, where bankers had to contend with a broad range of planning issues for families when their wealth became liquid. Those skills got lost in the transaction environment that we moved into. But we’re now going back to a long term approach and going back to the way it used to be," she contends.
"This means consistency in delivering above average returns, but also a concern about how I’m going to pass this wealth on to the next generation. Bankers need to know about regulation, tax, structuring and investment markets. Bankers have to be competent and a gate keeper for their clients," she says.
"Those are bankers that are going to do well. Reactive bankers are not going to do well as it won’t be about how many assets under management you oversee but understanding the complexity of family circumstances," she underlines.
"A big question is how do you train the next generation of private bankers when there is a whole generation of transactional bankers that have come through? Bankers need to raise their game," she argues.
Given her experience with complex ultra wealthy families, the mother-of-two says while there is still some distance to go where there are women working in all industries, women are very well-suited to the wealth management business. While the number of women in the wealth sector in Europe and the UK is rising, it still lags well behind other markets – particularly in Asia-Pacific.
"It is a relationship driven business where you have to be seen to be calm under pressure and multi-task. The question remains: how do we get more women involved in the industry?
Women are highly educated and making big money and are responsible for a large segment in terms of wealth creation. Women are drawn to women, so the questions are: where is all this business going to go? Over the next 5-10 years there’s a huge opportunity set out there.
You can see the numbers of women making money, there are plenty of figures to show that and I can say that as a banker. We all have a responsibility to pay attention to that [changing needs of clients]," she adds.
End of an era
Another tradition that has undergone a big change at Pictet came in February when it called time on its unlimited partnership to become corporate or limited partnerships ("société en commandite par actions de droit suisse" or SCA).
The profound change signalled a major shift in the traditional Swiss business model, meaning that for the first time in centuries, liability will lie with Swiss banks and no longer be vested in independent persons.
The shift arrived just weeks after Wegelin’s closure and at the same time as Lombard Odier: under the unlimited legal structure Wegelin’s partners were personally financially liable for the bank.
But both banks said the shift had been a long-debated call, and that it had "nothing to do" with Wegelin’s recent fate.
It remains to be seen what impact the changes will have on its financial performance.
The bank would not disclose exact figures but said its growth rate is positive since the beginning of the year.
Pictet would not disclose assets under management (AUM) separately for Pictet Wealth Management and Pictet Asset Management, but total group assets excluding global custody stood at $311bn at 30 June 2013.
PBI estimated the Swiss bank had an estimated $273.7bn in private client assets under management as of 31 March 2013.
The group’s Swiss bank, Pictet & Cie, currently the only operating entity that has the legal form of a general partnership, will become a limited company alongside all the Luxembourg, Nassau and Singapore division of the group.
According to Pictet, the bank will gain in consistency and transparency as the new structure requires the banks to publish a consolidated annual report for the groups.
It will also implement an independent supervisory board for the corporate partnership structure.
De Angelo does not want to be drawn to comment too much on the corporate changes but says a big part of it was the fact that Pictet is now a global organisation with about 3000 people, where the concept of limited liability isn’t always fully understood.
Pictet then is looking to have one foot in the future, with its new corporate structure, and another in the past – featuring De Angelo’s broadly skilled private bankers.
