Private banking and Wealth management guide - Euromoney

ContentsSafeguarding family wealth 3in a changing worldFamily Wealth DebateVienna-based Bank Gutmann: 12Private banking “from entrepreneurto entrepreneur”Bank GutmannThe Standard Chartered Private Bank: 14A new global force in the marketThe Standard Chartered Private BankWorld Citizen Services: 18Life moves in good companyABN AMROTechRules: 20Online advice based on experienceTechRulesCreating value by getting the big 22picture rightSEBThe future of the family office 24Sal. OppenheimThis guide is for the use of professionals only. It states the position of themarket as at the time of going to press and is not a substitute for detailed localknowledge.Euromoney Institutional Investor PLCNestor HousePlayhouse YardLondon EC4V 5EXTelephone: +44 20 7779 8888Facsimile: +44 20 7779 8739 / 8345Directors: Padraic Fallon (chairman and editor-in-chief ), Sir Patrick Sergeant,The Viscount Rothermere, Richard Ensor (managing director), C.J. Sinclair,Neil Osborn, Dan Cohen, Christopher Brown, J P Williams, John Botts,Colin Jones, Simon Brady, Tom Lamont, Gary Mueller, Diane Alfano, Mike Carroll,Christopher Fordham, Jaime Gonzalez, Jane WilkinsonOpen architecture for quality, 26innovation and excellence in Private BankingMarfinSpecialist approach allows 29Banco Urquijo to weather market volatilityBanco UrquijoEditor: Sarah MinnsDirector of research guides: Mike CarrodusCover illustration: Sarah Minns / Ray HeathPrinted in the United Kingdom by: St Ives, Roche, UK© Euromoney Institutional Investor PLC London 2007Euromoney is registered as a trademark in the United States and the UnitedKingdom.

www.sgprivatebanking.comOriginal and effectivesolutionsmodelled for youBest Private Bank in Western Europe for its offer in Structured Products (Euromoney 2008)Outstanding Private Bank for its offer in Alternative Investments (Private Banker International 2007)Contacts: Europe: Belgium (32) 9 242 22 22 - Channel Islands (44) 1534 815555 - France (33) 1 53 43 87 00 - Gibraltar(350) 200 4850 - Greece (30) 210 87 71 100 - Luxembourg (352) 47 93 11 1 - Monaco (377) 97 97 58 00 - Switzerland(41) 22 819 02 02 - UK (44) 207 597 3000 Americas: Bahamas (1) 242 302 5000 - Canada (1) 403 234 8191 - Uruguay(598) 2 623 28 40 Asia-Pacific: Singapore (65) 6303 3888 - Hong Kong (852) 22 00 26 00 - Japan (81) 3 6229 4300India (91) 22 6630 9680 - China Mainland (86) 21 5049 9828 Middle-East: UAE (971) 4 4257 600Imagine solutionsinspired by you.

and therefore being in a position to really have a multi-locationalpresence, multi-locational assets, multi-locational management. Soit’s about managing to delegate trust, and creating a structure engagingthose members who want to take part in the family affairs andthose who want to do their own things in life. We’ve come from aregime where accretion of wealth was almost like a crime, and we’vemoved into the situation where creation of wealth is being recognizedover the last 15 years.JA, Barclays Wealth In the UK, you can find a myriad of differentarrangements. In England in particular, if you had said 20 years ago:“What’s the family office?” someone would have said “It’s the estateoffice”. But the huge growth of liquid wealth of families in Europeand the UK is changing that idea. There are some families in the UKwho have had family offices that have run for more than 50 yearsbut they’re pretty few and far between. I do get the impression,though, that more people are questioning whether setting up a familyoffice is the answer. Do you need a formal structure?CAL, Lowenhaupt Global Advisors Before we get on to governanceand structure, let’s start by addressing financial investments. Howshould wealthy families measure investment performance?CBB, Institute for Private Investors It is difficult, and there is a needfor clearer metrics to measure the performance of financial investmentsof a family. First, what is their goal in terms of a return? And,secondly, how do the various managers they’re using compare, bothin peer groups, but also on risk level.DW, Forvest Trust Measuring returns is complicated. There arereturns in the short term, cashflow returns, and longer-term growthand capital gain investments. You must also consider the volatilityand liquidity of the investment. If we are talking really about liquidassets – yes, returns can be measured, and performance of the assetmanagers can be compared, but families tend to have a broad portfolioof diversified assets where comparison and performance needto be carefully defined.JAMH, The Hutchinson Consultancy There’s probably too much shorttermism.When you are judging external portfolio money managers,fine, but, if one’s looking at unquoted situations or property, it maytake a whole generation before you actually see the return. Familiesshould be looking longer term, not quarter by quarter.DW, Forvest Trust That’s very true, but what about the family’s needfor money right now? It is important to start by analysing the purposeof the investment return. What is the money required for? Andfrom there, go on and establish an investment policy.CAL, Lowenhaupt Global Advisors As the individual answers the startingquestion: what is the wealth for? how should he or she considerthe requirements of the investment returns?DA, AzureTax It varies. In Hong Kong, I have clients who are just sittingon billions of dollars in wealth, doing nothing and they don’twant to do anything with it. In some cases they don’t trust peopleto look after it, and in some cases they simply are not interested indiversifying or investing that money.DW, Forvest Trust Having a purpose is very important. Too fewwealthy families think about how to use the money they have attained.That purpose can be short-term, such as funding a health solution,and building the capital back up is a secondary concern. Or afamily might require a longer-term plan. We need to first analyse thepurpose of the returns and then plan the investments.Best adviceCAL, Lowenhaupt Global Advisors Who is best placed to advise andinvest family wealth?JA, Barclays Wealth It depends. Some families have simple investmentneeds and can build their own infrastructure to handle that,others will require external managers. Scale is really required,though, if a family is to have a group of individuals as good as abank taking care of the investments.CBB, Institute for Private Investors We’ve seen a shift in the balanceof power away from external financial service companies to the investor,thanks to technology and transparency. Up to now financialservices companies had more information and more knowledgethan their clients and than the investors. That is no longer the case.DW, Forvest Trust Yes, but even though there is much more informationaround, it may prove counterproductive and does not replacethe requirement for professional asset management, particularlyin a diversified portfolio. I agree that the family office may be ableto understand and evaluate the investment process, fees, type ofinvestments, etc, but it may not necessarily be able to evaluate therisk/reward ratio and form a global view, for which a true professionalis irreplaceable.CAL, Lowenhaupt Global Advisors We touched on diversificationearlier. How are families diversifying their portfolios?DA, AzureTax I don’t think I’ve come across a truly diversified familyin terms of geographical spread and risk spread in Asia. If they havea business, a lot of their money will still be in it. You hear aboutfamilies having investment committees, a pool of advisers on investmentstrategy, but they still often get overridden by the patriarch,who says: “No, we must have x, y and z”.SH, Family Office Exchange There are regional differences. ContrastingEurope with the US, it seems that European families take much

greater control over the actual management of the assets that they’reinvolved with. They might have an average of 20 managers thatthey’re working with when a US family would have 40. In Europe,families tend to be focused on issues related to business ownership,so we see less of a focus on investable equities and less confidence inthe public markets for the equity investments than we do in the US.In real estate, US families might have an allocation of around 10%,and among European families it’s much closer to 20%. In general,Europeans are less invested in hedge funds and fixed income, andmore invested in the natural resources and energy area.SS, Amarchand Mangaldas In India, diversification is growing. Thetraditional investment has been gold. And clearly securities andmutual funds are the preferred investment vehicle. Art, however,is becoming increasingly popular. And there are new commoditiesfunds setting up. From a geographical standpoint, there is a clear realizationby families that this is the time to buy outside the country,and to hedge for the day when demand in India might go down.This might include business acquisitions outside India, so familiesneed corporate as well as personal investment advice.CBB, Institute for Private Investors There is certainly an interest fromfamilies worldwide in diversifying assets globally. Last year, 70% ofIPI members intended to increase their exposure outside their domesticmarket. Until recently US family offices were invested twiceas much in non-US markets as the average US pension plan. Theway they do it, however, is typically to look for referrals from trustedadvisers or their own peer group, and they will tend to find localmanagers or global firms that have access to local managers.CAL, Lowenhaupt Global Advisors What about jurisdictional diversificationof governance structure? How does jurisdiction dictatestructure and planning?LT Sometimes structure is forced to be altered because family membersmove to another jurisdiction. They may start off as one familywith pooled assets in one jurisdiction but once one member movesto another jurisdiction, it throws up all sorts of very difficult issues.Today this is happening more frequently and is causing huge debate.DW, Forvest Trust It is important to diversify jurisdictionally in anycase. You can diversify assets, but if you don’t also diversify thestructure in which you are holding it, it can be devastating.DA, AzureTax Having all your assets with one custodian, for example,could be a danger.DW, Forvest Trust Or holding all the assets in an investment companythat happens to get sued, for example, because of a privateequity deal it is in. In that case all the assets would be exposedunless the structure was diversified.LT In some cases, political disturbances have forced families todiversify jurisdiction. Whether it is the Shanghainese leaving Chinain 1949, or it was non-resident Indians leaving the subcontinent in1947, or the Jewish community, these diasporas have gone acrossdifferent parts of the world. This is one reason Switzerland has attractedenormous amounts of money. The country has been a greatbeneficiary of political stability.CAL, Lowenhaupt Global Advisors These historical, political eventscan shape an investment mentality. Here is an example. A familyI know in the US who moved there as refugees a generation agohas what they would call investment real estate in 10 jurisdictionsaround the world. What family members will say is: “This is goodfor investment diversification”. What the patriarch would say is:“This is good because if we ever have to leave one country we can goto another country”, and he’s not thinking at all about the financialreturns, he’s thinking about lifestyle or life preservation.JA, Barclays Wealth That’s a good point. Lots of families and familyoffices, what they’re concentrating on is security, political risk, notlosing money. You may therefore not want to invest in emerging marketsdespite the growth prospects, you may actually want to go andbuy prime real estate in London or New York. The outlook amongfamilies differs. It is not just about going out into the world and tryingto make more money than the next money manager. If you lookat family offices, some are actually in wealth-creation mode and someare in wealth-preservation mode. Their needs will differ.PhilanthropyCAL, Lowenhaupt Global Advisors When talking about investmentsand family wealth, philanthropy has to be part of that conversation.A wise woman I know said: “When I put money into my community,that is as much an investment for my children as any stock orbond I can buy”. How can we go about measuring return on philanthropicinvestments?JRH, Trinity College The problem is that the return on investmentis a social return, for which no measurement system has yet beendevised. This allows people who are professionally involved in theworld of philanthropy to play around quite a lot and be relativelyunaccountable. One interesting development that will occur overthe next few years is that a lot of the new money that is coming intophilanthropy through people who have made a lot of wealth in recentyears, particularly but not exclusively in the hedge fund area, ismoney that is going to be invested according to a much more commercialmodel than has traditionally been the case in philanthropy.And that I think is a very welcome development.

CBB, Institute for Private Investors Melissa Berman of the RockefellerPhilanthropy Advisory Group pointed out that this trend towardsmeasuring philanthropy so exactly and in a commercial way can bevery counter-productive, because it’s almost like venture capital. Ifyou went into venture capital, you cannot measure its success in thefirst three months. It sometimes takes years. So I think her positionwould be to have a solutions-based view, identifying a problem orcause and then being patient. So I just want to make sure we don’tthink of philanthropy as something that’s suddenly going to be havinga quarter-to-quarter measure.CAL, Lowenhaupt Global Advisors Just as philanthropy went nationwidewith the Rockefellers and Carnegies, today philanthropy isgoing global with the Gateses and Turners. Is global philanthropydifferent and will the global family think differently about philanthropy?Is diaspora philanthropy different from home-grown?DA, AzureTax In the Far East, philanthropy has got a way to go.Families make donations, but it is not their purpose in life. There isnot a formal structure for philanthropy in the region.JRH, Trinity College I think there are differences around the world,and I think the differences are particularly cultural differences. Myown country, Ireland, is a case in point where we’re trying to getphilanthropy started after a period of rapid economic growth andthe accumulation of significant wealth for the first time in history.But there is a begrudging culture that does not value philanthropy.The Bill Gates situation is obviously the polar opposite of that, andGates’s philanthropy has won him much acclaim and we have allforgotten about anti-trust issues. The process of philanthropy doesnot differ from culture to culture and from country to country,however. You make your investments and you try to get the bestreturn possible. But the level of sophistication is very different. Andphilanthropy in any country has to go through a series of lifecycles.Initially it’s mostly heart; then it becomes a combination of headand heart, and then a little bit more head, as people try to measuremore precisely the impact of what they are doing, be more strategic intheir giving, less responsive. Philanthropy is a very fulfilling business,but it’s also a serious business, because you have a chance to achievesignificant social change, so it has to be approached carefully. AndI would hope that family philanthropists will realize that it has tobe approached professionally and that it will be more successful iffamilies are prepared to create structures through which their philanthropycan be pursued. And creating such structures requires them todo something very difficult – they have to give up some control.TW There is an important consideration for families before philanthropycan be a very fulfilling business. This is a law of humannature, which cuts across cultures. In many wealthy families, difficultrelationships develop, damage the family and even sometimesdestroy it. When family members are hurting and angry, itis human nature to withdraw, to pull in and to be psychologicallybusy managing the pain. This makes effective philanthropy impossible.If anyone in the family has the wisdom to acquire assistancein healing these relationships, the family members, as they heal,will naturally become more expansive and generous. It is onlythen that philanthropy can become a very fulfilling business inthat family. This pre-philanthropy need must be addressed or thephilanthropy will be limited. Families in all cultures share thischaracteristic.CAL, Lowenhaupt Global Advisors If philanthropy is not for amateurs,who can help families on setting up a structure?JRH, Trinity College If families are pursuing their philanthropy at areasonable scale, it requires them to hire the best people they can.And it requires them to give those people the space and the authorityand the discretion to be effective.DW, Forvest Trust I agree it has to be done professionally, but onedoesn’t have to be a chartered accountant to know the generalconcept of accountancy. So being part of a wealthy and charitablefamily means that one also has the responsibility to have a generalconcept of philanthropy, set the goals and directives and then leaveit to professionals to be carried out effectively.CAL, Lowenhaupt Global Advisors But does that detract from theenjoyment of philanthropy?JRH, Trinity College That’s true. The most compelling reason to getinvolved in philanthropy is that you can get more fulfilment andbring more meaning to your life. Now you can’t on the one handargue that, and on the other hand say you have to give it over toprofessionals. So, as with everything else in life, it’s a matter of gettingthe right balance. I think they need to be engaged. They willnot get fulfilment and meaning out of it unless they are engaged,but they need to avoid micro-managing, and quite frequently theyare seen to do that.CAL, Lowenhaupt Global Advisors It may be that there are two elementsof philanthropy for a family. One is the professionalization ofthe process of giving – grants, investments and so forth. The other isthe strategic analysis of how to use philanthropy to help the familybuild its own functionality. Discretion is a key point too when consideringphilanthropy. How and should families keep their givingconfidential?JRH, Trinity College There are many influences on philanthropy thatrequire accountability and transparency of a kind that we have not

experienced in the past, and that obviously cannot be combinedwith the sort of discretion that a family would expect through afamily office. Resolving that issue is quite difficult.DW, Forvest Trust In philanthropy we speak about values. I think themost valuable philanthropy is anonymous philanthropy, becausethat’s really what true philanthropy combined with value is.JRH, Trinity College Anonymity is very attractive but it has somedownsides, and if you pursue your philanthropy at a certain scaleit becomes impossible to be anonymous. The solution, I think, is topursue your philanthropy discreetly and modestly.TW Philanthropy is such a tremendous tool for families. Discretionin the eye of the public, as you mentioned, is important. Yet amongfamily members, philanthropy also produces recognition of a family’sstrength. It is also a wonderful way to teach business principlesto the family.CollaborationCAL, Lowenhaupt Global Advisors An interesting point was madeearlier about collaborations and networking of families. Can wereturn to that?CBB, Institute for Private Investors Yes, there seems to be a trendtoward looking for partnerships with families in other countries,whether it’s philanthropy or on the investing front. We’ve seen ashift in family attitudes about being singular in their focus and doingthese things themselves, to having a much greater appetite forcollaborating with other family groups. What is not entirely clear isexactly how families will be able to do this structurally in ways thathold up over long periods of time.JAMH, The Hutchinson Consultancy Co-investing with families thatthey know and trust in the local jurisdiction is becoming morepopular than just relying on local money managers, I agree. For example,agribusiness has been interesting, and international familiesare co-investing with local families in South America to gain access.LT In Scandinavia you will increasingly come across co-investmentsof the major families. Why? It’s a relatively small region of theworld, they do know each other quite well, they think in similarkinds of ways,. Structurally this does indeed raise issues. If twofamilies get together, the first thing both of them independentlyand then jointly should be questioning is what is the match interms of their families’ values and visions and ideals? And if thoseare mismatched, then I’m not sure that they ought to be talking toeach other, and they certainly ought not to be paying any financialadviser to try to hitch them together.SH, Family Office Exchange I think in the future we will see collaborationthat is aligned with investment interests that are closelyaligned with groups of families coming together in ways that are notpermanent but in interactive ways to have an exchange or to co-investor collaborate in some way. A network might be formed amongfamilies in different parts of the world because they bring somethingto the table that’s valuable to each other. There could even be multiplenetworks that a family might be part of. The structural relationshipswill get even more complicated than they are today.JA, Barclays Wealth But in terms of governance structures, I’ve donework with single families, and trying to work out the structures witha single family is very difficult. But surely we’re not talking abouttwo families having one governance structure?CAL, Lowenhaupt Global Advisors Isn’t that a multi-family office?JA, Barclays Wealth My perception of a multi-family office is thatyou might get different families with separate legal structures butthey pool their resources and certain investments.SH, Family Office Exchange The ways in which we’ve seen familiescollaborate in a multi-family office structure are a precursor of futurecollaborative models. Private family-controlled buying consortiathat have the same kind of access as the larger institutions is moredesirable for many of our members than collaborating with anyfinancial institution, where the senior executives are going to bechanging every three or four years.CBB, Institute for Private Investors Technology is fuelling the abilityof families to share their ideas globally.CAL, Lowenhaupt Global Advisors Sharing ideas around the world isvaluable. I know an Indian family that has a family business, andpart of their requirement is that any younger family member whowants to be part of the family’s wealth has to spend one monthevery summer doing social service work as a volunteer in the villagefrom which the family originated. That is a fine idea and I’ve takenthat idea to a couple of US families.CBB, Institute for Private Investors It brings great hope that the bestpractices globally will be seen by others and adopted. Wharton’s10-year-old Private Wealth Management programme brings familiesfrom 10 to 15 different countries in a room with the professors, andthen at night they’re comparing notes and learning from each other.LT This cross-border communication can also complicate issues forfamilies, however. In some parts of the world there are huge debatesunder way, whether they are gender debates or educational debates,or religious debates about what the family thinks it ought to bedoing as opposed to what it wants to be doing, because there are factionaldifferences of opinion, and very strong ones, being fed fromdifferent sources. Globalism, in a way, doesn’t help family unity.

that was too difficult to deal with. I don’t think it is.JAMH, The Hutchinson Consultancy I think it will take a lot of timeto rebuild the trust which is lacking between families, family officesand the global banks. And in the intervening period I think thebanks should be content just to be niche service providers to thefamily offices in certain particular areas. Banks should be preparedto take a long-term view. The perception of families and family officesof the banks based on past experience is that there’s a constantturnover of staff, and so the families end up repeating their story tothe bank time after time.DA, AzureTax It’s true. Every three years you end up repeating yourselfto the next family office person with whichever major bank youare dealing with.JAMH, The Hutchinson Consultancy The banks should not give up,though. I do think there is potential there if they take the long-termview, realize they have to rebuild this element of trust, do originalthinking and provide the solutions the clients want. I hinted at thisearlier this afternoon – think up alternative structures for the trust,realize the significance of where the family’s computer servers are,so the bank’s computer servers shouldn’t be in or pass through theUS, London or Frankfurt, otherwise the IRS and others are goingto claim jurisdiction. Start to think in an original and creative way,and then family offices might come back. The problem with somemulti-family offices is that they’re becoming banks. Families wantoriginal thought, original solutions – not product. Families wantaccess wisdom.JA, Barclays Wealth I totally agree. What is very interesting aboutfamily offices is that they are very smart. You’re not dealing withinnocent, ignorant private clients, you’re dealing with highlysophisticated professionals, and they will come to you when theyneed your product, not vice-versa. I think where you’re right isabout the fiduciary side of the business. Interestingly we are nowlooking at things like using limited partnerships and so on as analternative to the trust structure, because it’s more transparent interms of ownership.Banking needsLT I think we need to be realistic. The banks can only go so far. Theyare always going to have to justify to their senior management thatthey are making a decent return, as are those multi-family officesthat have sold stakes to global private banks. They can’t get awayfrom that. They will never, therefore, look at a family from a holisticpoint of view, whereas there are many other institutions that are notbanks that are geared to work with family offices accordingly. Mostfamilies in some shape or form need a bank, and they will continueto use a bank, and those that like leverage have to have a bank. Sobanks will be there, but I think that we just have to be realistic, theywill never take over the family wealth space.DW, Forvest Trust We asset managers consider ourselves complementaryto the banks. We believe banks are acting today beyondtheir core business to act as depositors and custodians and grantcredit facilities in case of commercial banks. I think anybody whouses the big banks today for anything other than that, is not reallyevaluating what he’s expecting to receive. We need the banksbecause we need the security and financial facilities that the banksoffer us. I think the mistake is that many banks try to diversify inareas where they can just not be competitive enough nor bring anyreal added value.CBB, Institute for Private Investors I disagree. It’s about talent, brainpowerand solutions, and a family will go where they can find that.And let’s face it, in many of these large financial institutions thereare very bright people. Of course there is turnover of personnel, butto over-generalize about financial institutions is a big mistake, becausethere are some very happy clients of some major institutions.JA, Barclays Wealth I think that’s absolutely right, and the challengefor the bank is to develop the solutions. That’s what the smart banksdo. I think sometimes the professions think that that independentview can only exist within the professions but there is an alternativeout there.SH, Family Office Exchange Yes, I would say that at the heart of thechallenge is the issue around customized advice and the ability forinstitutions to play a sophisticated role in supporting these families.I think it is unrealistic to think they’ll be able to take a holistic viewof a multinational family that’s doing business in multiple countries,because the scale is just so broad. Within any institution, thenumber of departments involved in serving that family are comprisedof territorial people who don’t want to expose their clients topotential risks inside the institution. So providing pieces of customizedadvice in a sophisticated manner probably changes the role thatan institution plays in support of a financial family and their familyoffice, but it’s a really valuable role to have them there as resourcesto access new and innovative strategies. I seldom meet sophisticatedfamily office executives who don’t want to know about the bestthinking inside leading financial institutions.CAL, Lowenhaupt Global Advisors But aren’t we also talking aboutthe concept of trust? I see David’s point that maybe the banks are offeringservices beyond their competency, but families can deal withthat. What I’ve noticed is that our clients no longer trust the banks.JA, Barclays Wealth Institutional trust does exist. Families withhuge amounts of wealth sometimes have difficulty in being able toentrust their money to individuals or a group of family members.There are still major families out there who will use institutional fiduciariesto hold their money, and that means that there is still thatfiduciary trust that’s out there, it hasn’t completely gone away.DA, AzureTax It has diminished though.JA, Barclays Wealth I think some wealthy families get comfort fromthe institutional pocket.JAMH, The Hutchinson Consultancy That was the case, but I do thinktremendous damage has been done to the reputation of some verymajor Swiss banks over the last 12 months over the sub-prime situation.How can you expect families or family offices to entrust theirwealth to those organizations?CAL, Lowenhaupt Global Advisors Good banks say: “Look, we mademistakes, we do make mistakes, but we also correct them, so youhave our assurance that if we make a mistake, we’ll make youwhole”. People used to believe that but don’t believe that any more.Trust has to be reintroduced somehow.LT There’s going to have to be a huge rebuilding exercise. Andthere’s also going to have to be a rebuilding exercise between twovery fundamental divisions within these global banks – the privatebanks within the global banks, and the investment banks who’vecooked up a lot of these investment products that have gone wrong,because the managements of these global banks wanted these divisionsto work more closely together.

The Standard CharteredPrivate Bank: a new globalforce in the marketThe launch of The Standard Chartered Private Bank last year and its acquisition of American ExpressPrivate Bank soon after made a big splash in the staid world of wealth managementPrivate banking is often regarded as a staid business where things moveat a glacial pace. The launch of The Standard Chartered Private Bank inmid-2007 changed that. Not only did the bank open in 11 markets injust five weeks, it then deepened its network to 30 offices in 17 marketsthrough the acquisition of American Express Bank in September 2007. Anew – and different – force has clearly arrived in private banking.“We considered opening a single office before rolling out a broader network,”explains Peter Flavel, global head, The Standard Chartered PrivateBank. “But during the planning stages, we realized that we had the skillsand momentum to create a launch with a scope and scale never seenbefore in private banking. Moreover, our entry into private banking wasdriven by demand from our existing banking relationships and it madesense to meet those needs in the fullest way, in the shortest possible time.”Standard Chartered Bank operates in more than 70 countries acrossAsia Pacific, North and South Asia, the Middle East, Africa, Europe andthe Americas. The bank derives over 90% of its profits from the tradecorridors of Asia, Africa and the Middle East, positioning it perfectly togrow a significant private banking operation. With a presence in nineout of 10 of the world’s fastest growing markets for private banking, TheStandard Chartered Private Bank has a fertile basis for growth.Standard Chartered Bank’s existing connections and networks havelargely dictated its target market of high-net-worth first- and secondgenerationentrepreneurs. “These people understand world marketsand have businesses and family arrangements that span a number ofcountries,” notes Flavel. “They need a bank that can meet their needs geographically,technically, intellectually and intuitively. We are in the rightmarkets at the right time – offering the right investment opportunities.”Crucially, The Standard Chartered Private Bank was able to draw onthe full resources of its parent bank in planning its launch. While manyprivate banks operate at arm’s length from their parent, StandardChartered Bank was eager to put the entire resources of its globaloperation at the disposal of its new operation. “Such a collaborativeapproach was the only way to achieve the scale of operation wewanted in a relatively short time,” says Flavel.More importantly, the decision to use Standard Chartered Bank’scommercial and other banking operations in the creation of a privatebanking business reflects the bank’s broader philosophy of using internalexpertise whereit is most needed.“Private banking is astrategic priority forStandard Chartered,”says Flavel. “The bankworks as a team– unlike some bankswhere there is littlecrossover of resources– so it was a naturalchoice for us to bringthe resources of theentire bank to bear.”A perfect fitHaving openedits doors in mid-2007, The StandardChartered PrivateBank’s acquisition ofAmerican Express Private Bank that September – the deal closed atthe end of February 2008 – dramatically raised the bank’s profile andexpanded its reach and capabilities. The purchase tripled The StandardChartered Private Bank’s distribution strength to 30 offices, gave ita staff of 1,100 and took assets under management to over $35 billion.“The opportunity to buy American Express Private Bank was too goodto miss,” says Flavel.Peter Flavel,Global Head,The Standard Chartered Private BankThe attraction of American Express Private Bank was not just itsclient base. The bank used the same back office system as StandardChartered Bank, making integration of the two operations muchmore straightforward and seamless. Additionally, as a long-establishedoperation American Express Private Bank already had a Genevabooking centre, a trust and fiduciary capability, a discretionary wrapprogramme and a web offering that enabled a global account view.“The Standard Chartered Private Bank had originally planned to spendtwo years following the launch expanding its capabilities but AmericanExpress Private Bank was a perfect fit,” explains Flavel. “One wayof describing the relationship between our operation and AmericanExpress is that it was long on infrastructure and short on distribution

whereas we had the opposite position.” In addition, as a result ofthe acquisition, The Standard Chartered Private Bank gained a LatinAmerican operation that extended its distribution.Executives from The Standard Chartered Private Bank spent severalmonths on the road in advance of completion of the acquisition visitingAmerican Express Private Bank offices around the world developingrelationships with new colleagues and learning about their operations.“That period of hard work enabled us to hit the ground runningon 1 March when the acquisition completed,” recalls Flavel.To that end, when American Express Private Bank offices openedworldwide on 1 March, each one had a senior representative from TheStandard Chartered Private Bank in place to welcome staff. “The signalthat sent to our new colleagues at American Express Private Bank wascrucial,” says Flavel. “It indicated that the staff in the acquisition werevalued highly and we were fully focused on working together to createa better offering for our new clients.”“With respect to American Express, which is obviously a strong paymentservices company, its private bank operation was not at the core of thebusiness,” says Flavel. “Now its staff are at the centre of a new businessin a dynamic bank and receive all the attention and investment thatimplies. Their expertise is being used in a fuller way than in the past.”Deepening relationshipsThe Standard Chartered Private Bank caters to two high-net-worthclient groups: private banking clients, who typically have between $1million and $10 million invested with the bank; and key clients, whousually have more than $25 million in investments at the bank. Intotal, The Standard Chartered Private Bank has around 19,000 clientaccounts in the 17 markets in which it operates.The Standard Chartered Private Bank’s sizeable client base is a hugeachievement for an operation that is just a year old. However, it isimportant to remember that its parent bank, Standard Chartered,has first-hand experience of wealth management services over manyyears and in many markets. “As a bank, we already have existing relationshipswith numerous customers that are qualified to be privatebank clients,” says Flavel. “It is a question of talking to them and showingthem our expertise and what we can deliver.”Indeed, while The Standard Chartered Private Bank is open to new clientsto the Standard Chartered banking network, its initial push to gain clientsis focused on existing bank clients. With a huge client base in consumerbanking, strong small and medium-sized corporate relationships and apowerful local corporate and multinational company franchise, the privatebank has plenty to build on. “The long-standing relationships of trustmany people have with Standard Chartered are invaluable,” says Flavel.“We aim to leverage them into partnerships that are deeper and broader.”Offices reflect the heritage ofThe Standard Chartered Private BankA unique modelThe Standard Chartered Private Bank stands out from other privatebanks through its combination of onshore and offshore banking.While most private banks offer only offshore banking, StandardChartered is able to make full use of its existing formidable bankingnetwork – it is the longest established foreign bank in China andhas the largest network of any foreign bank in India.“We realized that we had the skills and momentum to create a launch with ascope and scale never seen before in private banking”The ability to offer practical day-to-day banking services, in additionto the financial flexibility of offshore banking, gives The StandardChartered Private Bank customers a unique level of convenience andintegration in their transaction and banking affairs. “Delivering a fulldomestic banking service, including local transactions, in the marketsin which we operate is hugely beneficial for clients,” says Flavel. “It justmakes life easier and ensures that The Standard Chartered PrivateBank provides a truly complete service.”In its offshore banking operation, The Standard Chartered PrivateBank is refreshingly honest about the realities of contemporarywealth management. “It’s tough to differentiate oneself in privatebanking through products,” admits Flavel. “Products are replicatedextremely rapidly in today’s marketplace.” Consequently, StandardChartered has decided not to play that game with its privatebanking offering.The bank offers a full service open architecture client proposition thatgives access to a myriad of markets and products. The range includesliquidity funds and capital guaranteed products, client directedmutual funds, discretionary portfolios – where professional managershandle asset allocation and investment selection – and signatureportfolios, which offer a choice of geographic focus and fixed income,equity or balanced orientation and are managed by investment managerschosen from the best in the business.THE STANDARD CHARTERED PRIVATE BANK • A new global force in the makret15

Each of these stages of the investment process, which anchor TheStandard Chartered Private Bank’s thinking and the way it interactswith clients, requires a deep understanding of the mindset of clients.As a private banking group built around growth markets, the bank hasan unparalleled insight into how its clients perceive risk and rewardand, more generally, how they live their lives. “Approaches to wealthdiffer the world over and with operations in Asia Pacific, North andSouth Asia, the Middle East, Africa, Europe and the Americas, we areacutely aware of regional, local and, of course, individual differences,”says Flavel.The private bank has 30 offices, globallyClients can also access structured products, offering exposure to currency,interest rate, bond, commodity, fund and equity markets. Andalternative investments such as hedge funds and private equity – whichoffer exposure to asset classes that are less correlated than equities andbonds, and form an element of any balanced high-net-worth portfolio– are also available, as are straightforward investment options such asforeign exchange trading.However, while all global private banking markets differ, many that TheStandard Chartered Private Bank operates in have a number of featuresin common. Generally, clients in emerging markets have a reluctance tosubscribe to traditional asset allocation models that were designed forclients who perceive wealth in strikingly different ways to them. “We findthat clients don’t want 25% of their money in markets that would bechosen by a US private bank, for example,” says Flavel. “In contrast, ourasset allocation models are built around what our clients find comfortablein their local markets.”“The point is that we have no internal fund management operationbecause we want our clients to have access to the best wealth managementtalent in the world, whoever may be providing it,” says Flavel.Similarly, The Standard Chartered Private Bank is able to accommodatethe investment behaviour of its client base because itunderstands their expectations. “Obviously some of our clients have“One way of describing the relationship between our operation and AmericanExpress is that it was long on infrastructure and short on distribution whereaswe had the opposite position”“We carefully select the best products in the world – either from singlemanagers or from funds of funds that represent the best the industry hasto offer. Our extensive array of products is designed to appeal to a widerange of clients with varying needs and objectives – indeed, some of ourproducts are eligible to provide margin for a loan.”international lifestyles and might have the same approach to tradingas any private banking client,” says Flavel. “But more commonly,our clients will have first- or second-generation wealth – which willhave been gained by hard work and being market savvy and beingquite focused on trading.”Rather than aiming to create every product that a client might requireinternally, The Standard Chartered Private Bank is able to focus on ensuringits clients get the leading offering – whatever investment choice theymake – while leveraging its heritage and expertise in dynamic growthmarkets to make the right choices for clients. And, most importantly, TheStandard Chartered Private Bank is able to add value – in addition togaining access to the world’s leading financial products – by understandingthe needs and expectations of its clients.Perceiving risk and rewardThe Standard Chartered Private Bank has a steadfastly principled approachthat informs its entire wealth management strategy. It aims to develop athorough understanding of, and appreciation for, each client’s unique circumstancesand objectives. Then, working with clients to understand theirvision and expectations, the bank’s relationship managers devise a strategic,long-term approach focused on clients’ needs, rather than individualfinancial transactions, before recommending innovative financial solutionsthat meet an objective assessment of each client’s goals.Typically, such clients have higher return expectations than traditionalprivate bank clients. “It is accurate to say that our clientsmight be higher on a risk/reward scale than clients in, for example,Europe,” says Flavel. “What we observe is that they are generallyaverse to handing over large sums of cash to a banker – who hasjust flown in from head office – before they jet off on long holidays.They want to be actively involved in how their money is investedand many are likely to be quite active traders.”In practical terms, that means that The Standard Chartered PrivateBank relationship managers must be considerably more skilledthan a traditional private banker. “For our clients, this is not just afeel-good relationship with someone who can be relied on to selecta good wine at lunch and who can help settle family disputes,” saysFlavel. “This is a dynamic partnership with a professional that hastechnical competence in multiple markets and asset classes andwho understands investment products, foreign exchange and thecomplexities involved in managing a family’s wealth.”

Serving youThe Standard Chartered Private Bank delivers greatopportunities and benefits to clients, including:• An unwavering corporate commitment that focuses onserving the long-term wealth management needs ofclients and their families through generations;• A pledge of exceptional client service from experiencedprivate bankers and the account management team;• Connecting clients to opportunities in a broad networkencompassing 30 locations worldwide focused on thegrowth markets of the world;• A wide range of wealth management services – frominvestment management and estate planning to creditservices and more;• An award-winning offering – The Standard CharteredPrivate Bank was named Global Best Private Bank2008 by Euromoney, which cited the bank’s strengthin risk management, focus on growth markets, strongperformance, growth in client base and commitment toclient service and advisory as factors in its success.Seeing through the cycleWhile many emerging markets initially escaped the credit crunch thatbegan in the summer of 2007, markets across Asia – and to a lesserextent, Latin America and the Middle East – have come under increasingpressure in 2008 as evidence has grown of a global economicslowdown. “We remain cautious about the short-term prospects forglobal markets,” says Flavel. “There will clearly be more bumps tocome before markets strengthen.”However, Flavel notes that the fundamentals of many emergingmarkets remain indisputably positive. “Growth in the most importantemerging markets – China and India – remains at a multiple manytimes higher than OECD markets,” he says. “We still expect 7-9% a year.”Growth in a number of other emerging markets, such as those in theMiddle East, also remains impressive as many countries in the regionreconfigure their economies – using massive oil revenues – to be lessreliant on oil production in the long term.“It is vital for clients to have a strong partner that understands whenmarkets or asset classes are overheating and caution is required and,equally where new opportunities may be emerging where it’s importantto be an early investor,” says Flavel. The Standard Chartered Private Bankcontinually evaluates markets, products and asset managers on its clients’behalf to ensure that its recommended solutions deliver the results thatclients expect. However, the bank is also keen to help clients see beyondshort-term fluctuations in markets. “We help our clients see through thecycle because, in the long term, day-to-day timing is insignificant in termsof returns compared to the long-term returns that can be created by takingcommitted views on where value is located,” says Flavel.In turbulent times clients appreciate the solidity and financial stabilityof Standard Chartered, which has a banking heritage spanning morethan 150 years. Rated A+ by Standard & Poor’s, Standard Charteredrecently reported results for the six months ending 30 June 2008 thatshowed operating income 33% higher, profit before taxation up 31%– an interim record for the bank – and total assets 34% higher at $397billion “We are well capitalized and, as a group, we have a clear and consistentstrategy, which is do business in markets we know, with productswe understand fully, with clients with whom we build deep relationships.This is important to clients and the Bank as a whole.” says Flavel.Future plansWith the acquisition of American Express Private Bank finally completedin February this year, The Standard Chartered Private Bank hasplenty to occupy it at the moment. “We have plenty of growth opportunitieson the horizon through our existing client base – both clientsthat were previously with American Express Private Bank and thoseclients of Standard Chartered that are qualified to become clients ofthe private bank,” says Flavel.But while The Standard Chartered Private Bank may be spendingmuch of the next year further integrating American Express PrivateBank, Flavel says that he is eager to consider new markets for the bankfor expansion. “We’re an ambitious operation – that’s what makes usso successful for our clients – and necessarily we are always thinkingbigger,” he says. With Standard Chartered in 70 markets worldwideand private banking currently in 30 locations, there is plenty of scopefor expansion in the future.Regardless of how, or where, The Standard Chartered Private Bankgrows in the coming years – and it seems certain that it will continueto be one of the fastest-growing banks in the sector – Flavel says thatthe principles that the bank launched with will remain central to itsvision. “Our success has been built on a clear philosophy of wealthmanagement that reflects the expectations of our clients,” he says.“There can be no compromise in terms of quality, service, investmentchoices or flexibility. We are here to meet clients’ needs.”For further information, please contact6 Battery RoadLevel 27Singapore 049909THE STANDARD CHARTERED PRIVATE BANK • A new global force in the makret17

World Citizen Services:Life moves in good companyHigh-net-worth individuals enjoy increasingly mobile lifestyles including business or residencesoutside their home countries. However, many complexities arise from the multiple legal and fiscalregimes associated with an international existence. World Citizen Services, recently launched byABN AMRO Private Banking, can offer these clients financial ease abroadWorld Citizen Services is an exclusive ABN AMRO Private Banking serviceconcept that guides clients through new challenges abroad. Aswe see many of our clients moving their lives across borders to countrieslike France and Spain, ABN AMRO Private Banking has extendedits existing service with local World Citizen Services offices on theCôte d’Azur and the Costa del Sol. World Citizen Services is ready tohelp clients in any respect: from finding and financing a home abroadto tips on how to get settled in their new country. Regardless of thefinancial requirements, we make sure that all matters are arrangedto perfection in clients’ new countries of residence, so that they canfocus on enjoying their chosen lifestyles.A local guideLocal support can be invaluable to clients who are expanding theirlives across borders. Our local World Citizen Services teams giveaccess to their local network, as well as to any financial service in ourglobal ABN AMRO network, as well as to any financial service in ourglobal ABN AMRO network – with all the support of a top 10 globalprivate bank. Our local teams are knowledgeable about local realestate, legal advice, credit requirements and taxation. They are thereto advise clients on all their questions regarding living in their newWorld Citizen Services help ease the complexities of life abroadhaving a home abroad? World Citizen Services has already helpedmany clients purchase homes abroad. The local team has developedrelationships with brokers over many years, and knows the market forhigh value home like no other. We know what’s involved in buying ahome abroad and can point out relevant issues for the client.“Local support can be invaluable to clients who are expanding their livesacross borders. Our local World Citizen Services teams give access to their localnetwork, as well as to any financial service in our global ABN AMRO network. ”country: from questions about every financial matter abroad to informationabout the region and local market. World Citizen Services canprovide both immediate solutions and long-term arrangements.Our local teams can speak to the client in his own language. Ourteams speak French, Spanish, English, Dutch and German, and knowbest how to get things done in their respective countries. They combineexpertise and experience to provide personal, local advice that iscompletely customised to a client’s situation and preferred location.We want clients to experience unlimited enjoyment as they join theexclusive company of those who have turned their internationallifestyles into an art form.A home abroad: from dream to realityWhere do you start once you have decided to realize your dream ofTogether with the client World Citizen Services will look for the bestfinancing, reviewing all opportunities to find the right solution. Forinstance, financing with a client’s own capital is not always advisable. Amortgage may be more beneficial, for which we can offer various options.Daily banking easeA move abroad requires adjustments and familiarization with local customs,traditions and (im) possibilities. This includes banking. Some thingsare exactly as they are at home; others are completely different. WorldCitizen Services helps clients navigate their new banking environments byfacilitating the payment ease to which they are accustomed. In France, forexample, we can quickly arrange a current account for all banking needs,including a cheque book, credit card or online facilities. Our service rangesfrom a single, simple account to internationally distributed, multipleaccount management. Our teams work with the worldwide ABN AMROnetwork, allowing a client’s total account management to run smoothly.

your dreamsour guidanceyour life abroadour local supportyour dreamsour guidanceyour life abroadour local supportworld citizen serviceslife moves in good companyFrance: Banque Neuflize OBC, Palais Marie-Christine,20 Rue de France, Nice. Tel. +33 497 038 332+33 49 70 38 332Spain: ABN AMRO Private Banking, Avenida Jose Banus,Edificio Malaga Local 2-B, Marbella, Malaga. Tel. +34 952 90 88 43More information at www.worldcitizenservices.comor send an e-mail to world.citizen.services@be.abnamro.comMaking more possible080410_02E ABN_A5.indd 2Estate, tax and legal adviceAn international move can have a number of consequences related totaxes or legal rights. A foreign owner of a French home, for example,has to take various tax issues into account. He will probably facedouble taxation. He may also be categorized differently by the taxauthorities in each of his countries of residence and has to consider anumber of other important issues. World Citizen Services ensures thatthe client receives specialized, made-to-measure tax advice from ourinternational estate planning specialists. They have solid experienceproviding international tax and legal guidance to private banking clientsso as to preserve wealth, make optimal arrangements and avoidany undesirable fiscal consequences.Exclusive engagementsA new environment often means acquiring new social and commercialcontacts and experiences. World Citizen Services welcomes theclient in our network by inviting him for local client activities in Franceand Spain. These activities range from golf tournaments to economicforums. For example, in France we were the main sponsor of the Dayfor Change benefit golf tournament at the Royal Mougins Golf Club,which concluded with an attractive evening programme.In Spain, World Citizen Services Spain sponsored the SotograndeSilver Cup, Spain’s top polo tournament on the Costa del Sol, in 2007.This year, we were the main sponsor of the Andalusian Dutch Open,which was held in June on the magnificent course at La Quinta Golf &Country Club.In addition to golfing events, World Citizen Services organizes otheractivities that range from culture and entertainment to informationalsessions on financial issues, and provide information on third-partyevents planned in their areas. All this provides the client with anexcellent opportunity to expand his networks in France and Spain.Our servicesThese are just some of the ways in which World Citizen Services helpsclients to flourish in their new environments. From insurance to adviceto events, our expertise helps them to move their lives smoothlyand successfully.For further information, please contactFrance: Ab Meijer AA_fullcolourC.eps+33 497 038 332Spain: Marianne de Wit +34 952 90 88 43Width shield: 20 mmwww. worldcitizenservices. Overlap: 0,05 mm comABN AMRO full-colour for coated paper08/08/08 4:57:10 PMABN AMRO • World Citizen Services19

TechRules: online advicebased on experienceTechRules has built on its years of experience in financial advisory services to design an online toolthat helps institutions to give their customers the best advice in a cost-efficient wayFounded with the aim of combining extensive financial experiencewith the development of new technologies, TechRules has become thesupplier of reference in consultancy and technology for the industrializationof the financial advisory process.TechRules forms part of a group of companies founded by the Bolívarfamily, which provide services in the financial sector: Expert TimingSystems, TechRules, Efite, Fundación Inversión y Cooperación, Openseaand Quipu Technology.TechRules offers financial institutions multi-functional and multi-channelsolutions to improve the customer relationship by making it moreefficient and proactive, not only at the time of sale but also duringsubsequent follow-up.The company provides financial consultancy and the most advancedtechnology to improve the quality and efficiency of analysis and advice.This is the greatest need of all financial institution channels today.Numerous entities from the national and international financial industryhave selected TechRules as their technological partner. Customersinclude private banks, retail banks, asset managers, online banks, IFAnetworks and family offices.Integrated solutionUsing its wide-ranging experience in financial advice, TechRules hasdeveloped Tower , an integrated solution that provides financial institutionswith the tools to make their business grow by offering customersquality advice and reducing associated costs.Designed as a web solution, it enables managers and advisers toprovide a differentiated service by optimizing the generation of investmentproposals, creation, management and follow-up of portfolios andelaboration of reports.Tower is easy to use and highly scalable. It enables users to benefitfrom a constant desire for functional and technological improvement.It is a dynamic solution developed with the most modern technology. Itdraws on more than 20 years’ experience in financial consultancy and portfoliomanagement. TechRules understands that technology is only a meansto achieve our main objective: the best financial advice for the customer.Tower is fully compliant with the regulation in force: MiFID.Some of Tower’s functionalities:Portfolio ManagerThe Tower portfolio manager enables users to access the most relevantand updated information on their customers investments, presentedwithin a homogeneous and dynamic structure. Analysis of the portfolioreturns (following the GIPS® standard), absolute and relative risk, analysisof correlations, asset allocation of the portfolio and origin of profitsand losses, comparison with benchmarks as well as the possibility ofsimulating potential changes and even optimising the portfolio.ReportingA good report offers the opportunity to improve customer relationshipsby promoting constant communication. The tool allows elaborateclient portfolio reports automatically which increase the process efficiency:reduction of time and errors.Model PortfoliosDesigned to help the manager with the construction and monitoringof model portfolios. Flexible on the definition of components for portfolios,advanced simulation tool and optimisation and very completetracking tools.Investment Profile&ProposalsThrough a centralised system, your company can obtain the customerprofile (appropriateness, investor profile and suitability) and draw upcompletely personalised investment proposals starting from an indepthknowledge of their capacities, expectations and needs, which arekey for the generation of long-term business.Client ManagementFull information on your customers with the possibility of managingcommercial activity through a centralised system of personal, financialand asset information for each one of them.For further information, please contactBusiness Development DepartmentCáceres 228223 MadridSpainTel: +34 91 398 36 73Fax: +34 91 357 50 05Email: tower@techrules.com

Creating value by gettingthe big picture rightWith more than 150 years of experience and a dominant position in the Nordic market, SEB isnow taking the next step to provide a private banking offering that can compete with top-tierinternational private banks across the 14 markets where the bank is presentSEB played a major role in the industrial development of the Nordicregion in the last century, as both a credit provider and adviser toall sectors of the economy. Throughout its history SEB has beenseen as a specialist in asset management and asset advice fordomestic and foreign high-net-worth individuals. SEB Private Bankingmanages nearly €32billion, and 28,000 private individuals, trustsand companies have chosen the bank for its professional wealthmanagement and high level of service.Thomas Ericsson, global head of SEB Private Banking, elaborates onwhat he believes is the future of private banking: “Our primary goalis the same as it always has been: to help our clients achieve theirfinancial goals. We have worked tremendously hard to find newways to make this happen. The importance of providing a holisticcustomer offering can’t be overstated. ““Often private banks focus too much on asset management issues. Thatstarting point might be wrong, not that one should disregard financialtheory and the importance of diversification. Private investors can’t behandled in the same way as institutional ones. It is surprising that solittle has been done to address this problem. However, at SEB PrivateBanking we have addressed this issue in our financial planning process.This is an in-depth analysis of the client’s total assets and liabilities withan advisory process that targets client-specific goals and risk factors.Our modern approach to private banking will facilitate better communicationwith our clients about complex quantitative issues that arebecoming ever more crucial to high-net-worth individuals as alternativeinvestments become a greater part of the asset mix. In the end it’sabout finding the right solution for each and every one of our clients.”the work of channelling group intelligence and knowledge to ourprivate banking business.”For SEB Private Banking this is about providing these products toclients in the right context. “For example, in our new investmentprogrammes we can offer our clients the opportunity to invest in“Our private banking experience is a one-stop shop where the starting pointis a thorough analysis of each client’s entire financial situation”Unique platformFew other players can match SEB when it comes to institutionalproduct resources in the Nordic market. “We have a somewhatunique platform, with top-ranked analysis and a lot of institutionalproducts that are of great value for our clients,” says Ericsson. “Ourapproach to holistic advice does not in any way mean that we willnot utilize these resources. On the contrary we have intensifieda number of alternative investments and asset classes from acrossthe globe that are typically not open to other private individuals.Our clients will benefit from our global relationships, size, purchasingpower and our urge to provide state-of-the-art advice. It isgratifying to see how financial innovations can actually lead to aninvestment solution with equity-like expected return but significantlylower expected volatility.”

At SEB Private Banking clients can expect a wide range of servicestransformed into customized solutions delivered by experiencedstaff. Few, if any Nordic private banks can offer the same scope anddepth of solutions as SEB.Ericsson explains: “Our private banking experience is a one-stopshop where the starting point is a thorough analysis of eachclient’s entire financial situation. We have the capacity to help ourclients with everything from everyday finances to wealth management,legal matters, insurance, financing and tax issues. Also wecan adapt the solutions to match individual requirements.”Open architectureDespite the impressive internal competence, SEB Private Bankinghas for long seen the advantages of open architecture and builtup an impressive internal organization for conducting research onthird-party products.This is natural, says Ericsson. “Everybody in this business should behumble in the sense that one accepts the fact that competition isfierce and our number one priority is to make sure that our clientshave the best potential to realize their financial goals. Thus an openarchitecture approach with best-of-breed products is essential inthe modern private banking world. But this is nothing new for us.One must remember that the success of this bank to a large extentThomas Ericsson, global head of Private Banking, SEBAnother client group with complex needs which has been in focusfor many private banks is the entrepreneurs. “This is an importantsegment also for SEB,” says Ericsson. “For many years we haveworked with entrepreneurs and we can offer specific entrepreneur“Our primary goal is the same as it always has been: to help our clients achieve theirfinancial goals. We have worked tremendously hard to find new ways to make this happen.The importance of providing a holistic customer offering can’t be overstated. “is dependent on the long-term relationships we have had andcontinue to have with our clients. Some of our clients have beenwith us for generations. This is a great responsibility which we treatwith uttermost respect. It should go without saying that we do allwe can to provide the best possible solutions to them.”Keeping trackThe small and intimate family office unit is a special team withinprivate banking with an established track-record of caring forwealthy families. “It is our aim at SEB to follow our clients in life andover generations,” says Ericsson. “The family office concept is vastbut is often triggered by an important transition issue such as successionor sale of the family business. Families often underestimatehow difficult it is to keep track of a diversified fortune and some ofthem have the feeling of having lost the big picture of their familysituation. Since we live and breathe these questions and have doneso for more than 150 years it is gratifying to see how more andmore clients appreciate the value added nature of these services.”services. Often there is a connection between this sort of service and, forexample, our family office offer. Here you can see how we can serve theclient in various stages of life and adapt our value proposition to that.”For further information, please contactwww.sebgroup.com/privatebankingEmail: privatebanking@seb.seTel: +46 8 771 - 625 201SEB • Creating value by getting the big picture right23

The future of thefamily officeFor centuries, family offices have been offering their wealthy clients special services.The Sal. Oppenheim Group has entered a whole new league with Oppenheim Vermögenstreuhand,which could be described as Germany’s first corporate family officeWhen entrepreneurial families sell stakes in their companies, they facea major challenge. They are confronted with a large inflow of liquidity,which they need to invest for long-term success in different areas.Advice concerning management of these assets becomes increasinglycomplex, and the various wishes of individual family members have tobe harmonized.The owning family of Sal. Oppenheim jr. & Cie. also experienced a largeinflow of liquidity in 1990, when it sold its shares in Colonia-Versicherung.It founded what is now one of the oldest family offices in Germany tomanage family assets sustainably together across generations –Oppenheim Vermögenstreuhand (OVT).classes,” explains Christopher Freiherr von Oppenheim, personally liablepartner of Sal. Oppenheim jr. & Cie. S. C. A. responsible for the assetmanagement division.When a family chooses OVT to manage its assets, the first step for thefamily office is to analyse the client’s risk profile. OVT then develops aninvestment strategy together with the family on this basis. Not untilthese parameters have been established will the experts in the OVTcompetence centre select asset managers to implement the strategies.Legal and tax experts are also involved in this process in addition tothe product experts and those in other areas.“Family office is an integral part of our holistic asset management approach.One key aspect is the fact that clients receive one-stop comprehensive, neutraland independent advice for all of their assets and asset classes”In addition to the Oppenheim owner family, OVT now helps more than50 other families and institutions to organize, continually optimize andmanage their assets. In so doing, the company has developed from asingle family office, with just one client family, to a multi-family office fora larger number of clients. OVT has grown to the size of a real corporatefamily office.In-house expertiseA key criterion for a corporate family office is the ability to cover a widerange of issues with its in-house experts, from strategic asset allocationthrough equity investments to real estate investments. With a staff ofover 50, OVT can offer comprehensive management even for extremelycomplex assets. In addition to traditional family office services, such asreporting, management accounting and consulting, OVT’s competencecentre analyses investment products and strategies and prepares investmentdecisions. This gives OVT’s clients exclusive access to numerousexperts, for instance in real estate or equity investment.“Family office is an integral part of our holistic asset management approach.One key aspect is the fact that clients receive one-stop comprehensive,neutral and independent advice for all of their assets and assetPreserving capitalMost families have one requirement in common: Their prime objectiveis capital preservation, with the maximum possible return ranking secondin terms of priority. For this reason, OVT’s primary focus is on limitingpotential risk of loss and preserving capital stock after deductionsfor inflation and tax payments. To this end, the family office constantlymonitors the success of the commissioned banks and asset managers.Reporting and monitoring software specially developed for thispurpose allows the amount of success and risks taken by the serviceproviders to be measured, negative trends to be recognized early andadded value to be created for the client.One of the greatest advantages of OVT is its independence; the familyoffice does not produce or market any investment products itself, nordoes it take the role of asset manager. “OVT is in fact an independententity which protects and represents the interests of its clients,”stresses Oppenheim. OVT thus receives no hidden commission; it issolely financed through its clients’ fees.Only a corporate family office like OVT can provide such strengths. If afamily forms its own family office, or several families have their assets

managed by a multi-family office, they are unlikely to have thenecessary volume to give them access to experts on special issues.But it is this opportunity to identify key questions in advance andto provide correct and timely answers that is increasingly becomingthe deciding factor in the success of the overall assets. Furthermore,the asset structures within a family are often very complex. So it isnot unusual for a family to have working relationships with over 30asset managers. After all, assets usually comprise more than just securities;they may also include real estate, equity investments, privateequity or works of art. And many families are made up of differentbranches among which the assets are divided. A sophisticated ITsystem is necessary to manage and monitor all of these assets efficientlyand report on them to each individual family member, andOVT has spent years developing just that.It is usually more cost-effective for a family to have its assetsmanaged by OVT than by a single family office, due to economiesof scale, not to mention OVT’s many years of experience of allmanagement processes in connection with accounting or tax andlegal consulting. Clients pay a flat fee for the services, based on thecomplexity of the tasks, not the amount of assets.Laying the foundationsOVT has been heavily involved in providing services for foundationsand similar institutions for many years. “We are seeing an evergrowingawareness, especially among wealthy families and entrepreneurs,that foundations are one of the keystones of a sustainablesociety,” says Oppenheim. Particularly in Germany, experts are talkingof a real boom in foundations. The Sal. Oppenheim Group managesassets in Germany of more than 130 foundations with a volume totallingmore than €2 billion.OVT offers comprehensive advice; in the case of foundations, it workswith the client’s legal and tax advisers on concepts to realize individualphilanthropic ideas and asset strategies, taking into account specificrequirements of the foundation, such as its distribution focus. In addition,OVT supports its clients in implementing new or developingexisting philanthropic commitments.OVT provides individual support concepts for asset investment– both in administrative management and investment strategy.Risk management is particularly important in the management offoundation assets, because the capital stock must be preserved.Foundations also rely on regular income to finance their cause. Astudy recently published by the Berlin-based economic publishinghouse Fuchsbriefe on quality and service provided by foundationadvisers placed Sal. Oppenheim far ahead of the competition. In theconclusion to the study, the experts at Fuchsbriefe write, “At the endof the day, the winning team from Sal. Oppenheim simply outshoneits competitors in all categories. ”International approachThe Sal. Oppenheim Group has long followed an internationalapproach in its family office business. This is due to the fact thatwealthy families are increasingly based abroad, and also make crossbordercapital investments. To this end, Sal. Oppenheim strengthenedthe family office business in spring 2008 with an acquisition inChristopher Freiherr von Oppenheim, Personally liable partner ofSal. Oppenheim jr. & CieLuxembourg; the company took over the domiciliation business ofMercuria Services. Sal. Oppenheim bought trust company SGG inLuxembourg back in 2005, and plans to merge the new acquisitionwith its business in the medium term. In the summer of last year Sal.Oppenheim opened an office in Hong Kong which also offers familyoffice services. Furthermore, the family company founded a joint venturein Switzerland last year with the Dr Landert Group, to reinforceservices for families from Switzerland. “This joint venture in Switzerlandand the expansion of our range of services in Luxembourgallows us to considerably extend our existing offering to our clientsinternationally too,” explains Oppenheim.The private banking group aims to expand its commitment to themanagement of larger family assets also in the years to come. Sal Oppenheimsees this business as an integral component of its holistic assetmanagement. The focus remains on the clients – they stand to benefitacross the globe from even more comprehensive services.For further information, please contactOppenheim Vermögenstreuhand GmbHOppenheimstrasse 1150668 Cologne, GermanyTel: +49 2 21/1 45-2400Fax: +49 2 21/1 45-9 2409Email: info@ovt. dewww. ovt. deSal. Oppenheim Groupwww. sal-oppenheim. comSAL OPPENHEIM • The future of the family office25

Open Architecture forQuality, Innovation andExcellence inPrivate BankingMarfin Popular Bank, part of the Marfin Investment Group (MIG) of Companies, was created by thetriple merger of Laiki Bank, Egnatia Bank and Marfin Bank to become one of the strongest playersin the South Eastern Europe region. Based in Cyprus and with presence in more than 15 countries,this new international bank is developing a strong Wealth Management franchise through itsPrivate Banking Division emphasizing in quality, innovation and client service excellenceMarfin Popular Bank, part of the Marfin InvestmentGroup (MIG) of Companies, was created by the triplemerger of Laiki Bank, Egnatia Bank and Marfin Bank tobecome one of the strongest players in the South EasternEurope region. Based in Cyprus and with presencein more than 15 countries, this new international bankis developing a strong Wealth Management franchisethrough its Private Banking Division emphasizing inquality, innovation and client service excellence.Private Banking has been developed based on a philosophyof three main building blocks namely The HumanCapital, Innovative and Independent Products &Services and State of the Art Technology. High caliberPrivate Bankers with international experience & traininghave been recruited to offer best in class advisoryand portfolio management services to our clients. Clientproducts and services choices expands through afully open platform in more than 500 funds selectionsfrom the best of breed global providers that undergocontinuous monitoring and due diligence. The technologicalplatform comprises one of our strongestcompetitive advantages developed to support ouropen architecture initiatives and allowing maximumutilization of private banking talent & skills.Our Private Banking Products & Services offeringto clients covers the space of Traditional Banking,Global Investment and Wealth Management. Morespecifically the Private Banker which is the singlecontact relation between the Client and the Bankis responsible to deal and accommodate all clientfinancial needs supported by the entirety of the

MPB Group resources, expertise and know how. In the TraditionalBanking space we include services like money transfers, mortgage& personal loans, current account management and other similartraditional banking services. In the global investment area we focuson delivering innovative solutions through discretionary, advisoryand execution only mandates using global asset allocation modelsand individual product selections. Relying on our independentinvestment strategy team we exploit our extended third partyfunds selection capacity as well as our dedicated structuring deskto produce maximum value for our clients. Finally, our Wealth ManagementDivision is responsible to provide solutions to our clients’special project financing requests mainly through Lombard Loansand design optimum structures corresponding to clients’ Estate,Financial and Succession Planning needs.At present moment we manage E3.6 billion of some 2,500 clientgroups in Greece and another E1 billion abroad through a total staffof 80. Assets under Management developed very rapidly over the last3 years. In 2005 onshore total AUM did not exceed E300 million toundergo a tremendous increase of more than 12 times in over just 2.5years period.This result confirms our vision and strategy and provides enough evidencethat we are in the right path for our further development plans.Our investment process is driven by client risk profile and cash flowneeds. Periodically we discuss and update client profiles in an effort toensure that we keep up with changes in our clients investment goalsand risk appetite. Client profile is the main driver in portfolio constructionand management. Our portfolio synthesis philosophy is tosuggest and propose positioning in a set of core holdings accompaniedby a satellite subset of investment positions dictated by client’stolerance levels to risk for yield enhancement reasons. The main coreportfolio will be positioned in traditional investments with high levelsof liquidity reflecting client’s risk profile and other special requests/restrictionsfor geographic, currency and asset class allocation.“At present moment we manage E3.6 billion of some 2,500 client groupsin Greece and another E1 billion abroad through a total staff of 80. In 2005onshore total AUM did not exceed E300 million to undergo a tremendousincrease of more than 12 times in over a 2.5 years period.”Current Investment ClimateAt the present markets environment which is characterizedby volatility hikes, macroeconomic uncertainty,geopolitical risks and low liquidity it seems that atypical equity/bond/cash portfolio or other traditionalinvestments, may not be enough to materializeexpected returns and preserve capital. At the sametime high deposit rates available in the market thatthe liquidity crisis has made available from institutionswith increased liquidity concerns may also be a threatrather than an opportunity. In this environment ourcautious direction to clients is to allocate more fundsto cash than usual in order to position themselves forshort periods of time exploiting opportunities thatexist within an increased volatility environment andcontrol their overall level of risk through specialisedshort duration products either capital guarantee orpartially capital guarantee. Such products will augmentthe core holdings of an investor’s portfolio ensuring abetter long term performance.Marfin Popular Bank has an open independent platform of over 500mutual funds of well known, international investment houses inits radar screen and through continuous close monitoring depictsthe ones that consistently and repeatedly beat benchmarks andyield real returns. Our commitment and firm strategic decision isto continue expanding our client selection potential by addingestablished and value enhancing choices in the Traditional andAlternative Funds Universe. The range of funds expands from thevery common main markets value investment space to the highlyspecialized boutiques. A thorough due diligence and fund selectionprocess which is based on regular reviews of fund performanceand fund management mandates and style has been applied as themain selection filter for our fund proposals to clients.For further information, please contactMarfin Private Bank24 Kifissias Ave151 25 Maroussi Athens, GreeceD. Manailoglou, Group Wealth Management DirectorD. Scapinakis, Head of SalesTel. +30-210-8170000MARFIN POPULAR BANK • Open Architecture for Quality, Innovation and Excellence in Private Banking27

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Specialist approach allowsBanco Urquijo to weathermarket volatilityIn an uncertain economic environment, with increasing market volatility, Banco Urquijo’s longstandingcommitment towards understanding and meeting its client’s needs comes into its ownBanco Urquijo’s undisputed reputation as a benchmark of privatebanking excellence is backed by more than 130 years of history.The bank’s new focus on wealth management, on the back of itsacquisition in 2006 by Banco Sabadell Group - the fourth largest bankin Spain - is already reaping benefits; in 2008 Banco Urquijo was recognizedby Euromoney as the second best private bank in Spain.With the aim of adjusting client investment portfolios to currentmarket conditions and reducing the overall risk, Banco Urquijo advisesits clients to diversify their investment portfolios with structuredproducts and alternative investments.Thus, one of the bank’s main aimsis to preserve capital. Nevertheless,even in uncertain times, good investmentopportunities may arise. So thegoal of Banco Urquijo is to focus onmonitoring its client’s portfolio riskand to seek investment opportunitiesthat diversify and reduce theoverall risk of its client portfolio.Uniquely efficientmarket portfolioWith regard to alternative investments, Banco Urquijo dedicates a greatdeal of time and effort to analyzing and selecting best-in-class productsfor this type of investment. Consequently, it is able to offer clients aselection of exclusive products such as private equity, real estate and artfunds, private equity funds of funds, hedge funds and funds of hedgefunds. Banco Urquijo is involved in finding real estate investment opportunities,paying special attention to the geographic area, the type ofinvestment (property development/property-related assets), as well asthe type of market (residential, office, shopping mall).Another key alternative investment target has been renewable energy,in particular wind power. Banco Urquijo recently launched a privateequity fund aimed at investing in Polish wind farms, taking advantageof one of the fastest-growing economies that has recently joined theEU and a new regulatory framework that favours this type of energy byoffering a very attractive yield (10% higher than the average EU yield).Banco Urquijo offers an extensive range of structured products withdifferent risk profiles linked to a wide range of underlyings such asstocks, bonds, currencies, commodities, inflation, indexes and hedgefunds, all with different time horizons.This new phase of Banco Urquijo’s development underscores its strongcommitment to building up long-term relationships with its clients. Itsapproach of delivering a uniquely efficient market portfolio with a 360ºrelationship with its clients, while meeting each client’s risk profile andproviding an integrated range of products and investment solutions,has paved the way for Banco Urquijo to be placed first in 13 categoriesof the 2008 Euromoney best private banking awards in Spain.Dedication and innovationIt is in this uncertain economic environment and increasing market volatilitythat Banco Urquijo’s long-standing commitment towards understandingand meeting its clients’ needs comes into its own. To achieve this goal,Banco Urquijo provides an integratedrange of products and services adaptedto current market conditions.The discretionary asset managementservice provided by Urquijo Gestión(Banco Urquijo’s asset managementunit) ensures that its client investmentportfolios are professionallymanaged by a team with a proventrack record. In collaboration withthe client’s private banker, the investmentmanager draws up a client riskprofile and the client’s portfolio is managed accordingly. Banco Urquijohas developed its own innovative risk management tools to ensure thateach client portfolio is managed within its risk profile framework.Banco Urquijo’s client portfolios are the result of its open architecturepolicy and a team of product specialists (one product specialist forevery two private bankers) who implement this policy by analyzing andselecting best-in-class products and by providing technical support toprivate bankers so that they can focus on strengthening their relationshipwith their present clients and gaining new ones.By building up this team of product specialists, Banco Urquijo has beenable to position itself at the cutting edge of the Spanish private bankingIndustry, providing close support to private bankers and clients.BANCO URQUIJO• Specialist approach allows Banco Urquijo to weather market volatility