Wegelin & Co, Switzerland’s oldest bank, has
established a dedicated family office service team in Lausanne to
take advantage of what it describes as a “huge” shift towards
private banks as service providers.
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The five-man team will form part of an expanded
100-strong office in the city as Wegelin continues to increase its
private banking presence in French-speaking Switzerland.
Managing partner Adrian Künzi told Private
Banker International that the bank decided on setting up the
family office team following interest in their quantitative equity
strategies. Recent research (see PBI 246) showed single
family offices were increasingly turning to private banks for
outside services, a trend Künzi said had been noticeable in the
past year.
“This is exactly why we have set up a team
called family office services,” he said.
“We are targeting family offices as clients,
which allocate mandates to particular service providers.”
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By GlobalDataKünzi added: “There is a huge trend to the
more niche players and boutique asset managers. With the experience
of the last few months, they will move from the large banks because
they’re all mainly state owned.”
Künzi said the new team would work on
providing family offices with a different type of service, which
would take into account the special requirements of the SFOs.
“We have realised family offices have specific
needs in terms of reporting, access to information and we aim to
treat them as another institutional investor, but with slightly
different needs,” he said.
“Family office needs are closer to those of a
private client, but the size of the assets requires them to be
treated in a different way – they sometimes want daily interaction
with the manager, which means you have to have a specific team to
deal with them.”
However, there are some in the industry who
believe the trend of family offices giving investment mandates and
other services to private banks is unlikely to last.
Mark Nixon, director of institutional clients
and family offices at Merrill Lynch, said the issue of counterparty
risk and the relationships wealthy families have with private banks
in Switzerland had seen the switch to a more conservative
investment policy. But he expected the trend to revert back to the
norm in the next two to three years. That view was backed up by
Andreas Feller, head of wealth management solutions at Swiss
private bank Vontobel.
“We are trying to benefit as much as we can in
this area from the strategy we have, but when markets recover, or
if there is an extended rally, we will start to lose out again as
business returns to more transaction based alternatives,” he
said.
