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inspired by you.
Safeguarding family wealth
in a changing world
Wealthy families are facing growing challenges as they become more global.
How can they manage their structures as family members move abroad?
Where should they invest to truly diversify their assets across the globe?
Is philanthropy a challenge in some cultures? And can the financial service
providers who claim to be able to help ever regain families’ trust?
CAL, Lowenhaupt Global Advisors Let’s start off by looking at the
impact of globalism on families. What are the challenges in being a
global family of substantial wealth? Executive summary
SH, Family Office Exchange Families have similar financial challenges
whether they are based in Singapore or Europe or the US. But for • Globalization – with members of wealthy families located in
the multinational, multi-jurisdictional family, there is much more different countries – has made management of family wealth a
complexity and cost involved in managing wealth when members more complex process
are in many countries. There is much greater complexity in the
accounting, reporting and custody work that is required to support • In some parts of the world wealthy families resist the
different jurisdictional issues and keep up with regulatory changes. I establishment of formal family office structures
think the greatest challenges for these families is actually in the fam-
ily governance and the decision-making process. It’s much harder to • The measurement of the performance of family investments is
get people in five time zones to have a clear understanding of what complex and not well developed, particularly as many families
discussions need to be made. Distance mandates delegation to oth- should be looking to long-term, not short-term, returns
ers, which is difficult in many family cultures.
LT Challenges have become most noticeable in regions of the world • Wealth management independently organized by a family office
where wealth has exploded, such as the Middle East. The challenges has been facilitated by modern communications and technology.
are also most acute, it seems to me, where the family has made its But there is still a need for outside advice and services
wealth from the first generation and is now facing the succession
issues of the next. • Diversification of investment, both of asset types and of
JAMH, The Hutchinson Consultancy Globalization is going to increase jurisdictions where assets are placed is a crucial issue
the number of wealthy families, as business-owning families decide
to sell out or undertake IPOs. The challenges facing these families • Philanthropic activities demand as much professional input as
are not, first and foremost, in my view, investment or business does investment
decisions – but more relating to soft and human issues such as next
generation matters, personal security, reputation management and • Ad hoc and more formalized networking and collaboration
conflict resolution. Also, in terms of whom to turn to for help in between wealthy families is a growing trend
managing this liquid wealth, I think that they will opt to create
their own family offices because they have a certain distrust of the of large family offices in the Far East, and we’re seeing new tries at
larger banks. They want to feel they have someone who is fighting setting something up. The families we deal with don’t like to use the
in their corner for the family’s interests and not some individual major institutions, such as private banks. They have private banking
whose first responsibility is, sadly, the bank’s profit and loss. accounts with a number of institutions, but will they be taking advice
CAL, Lowenhaupt Global Advisors Certainly, providing services to from those institutions? Generally speaking, not. A lot of families do
families scattered across the globe will be challenging. How has the things for themselves with a few key advisers.
family office sector been developing in your respective regions? SS, Amarchand Mangaldas In India, at present, wealthy families tend
DA, AzureTax In Hong Kong, there are very few wealthy families who to have their issues taken care of by one person who would be a pro-
are actually from Hong Kong. We have a lot of families based there fessional but who is part of the extended family. The challenge is:
now for tax reasons or, indeed, because business is good; they’ve how does that become a family office? At the same time, Indians are
made a lot of money and they’ve stayed. There isn’t the huge volume expanding their wealth in terms of acquiring companies globally,
and therefore being in a position to really have a multi-locational the requirements of the investment returns?
presence, multi-locational assets, multi-locational management. So DA, AzureTax It varies. In Hong Kong, I have clients who are just sit-
it’s about managing to delegate trust, and creating a structure engag- ting on billions of dollars in wealth, doing nothing and they don’t
ing those members who want to take part in the family affairs and want to do anything with it. In some cases they don’t trust people
those who want to do their own things in life. We’ve come from a to look after it, and in some cases they simply are not interested in
regime where accretion of wealth was almost like a crime, and we’ve diversifying or investing that money.
moved into the situation where creation of wealth is being recog- DW, Forvest Trust Having a purpose is very important. Too few
nized over the last 15 years. wealthy families think about how to use the money they have at-
JA, Barclays Wealth In the UK, you can find a myriad of different tained. That purpose can be short-term, such as funding a health so-
arrangements. In England in particular, if you had said 20 years ago: lution, and building the capital back up is a secondary concern. Or a
“What’s the family office?” someone would have said “It’s the estate family might require a longer-term plan. We need to first analyse the
office”. But the huge growth of liquid wealth of families in Europe purpose of the returns and then plan the investments.
and the UK is changing that idea. There are some families in the UK
who have had family offices that have run for more than 50 years Best advice
but they’re pretty few and far between. I do get the impression, CAL, Lowenhaupt Global Advisors Who is best placed to advise and
though, that more people are questioning whether setting up a fam- invest family wealth?
ily office is the answer. Do you need a formal structure? JA, Barclays Wealth It depends. Some families have simple invest-
CAL, Lowenhaupt Global Advisors Before we get on to governance ment needs and can build their own infrastructure to handle that,
and structure, let’s start by addressing financial investments. How others will require external managers. Scale is really required,
should wealthy families measure investment performance? though, if a family is to have a group of individuals as good as a
CBB, Institute for Private Investors It is difficult, and there is a need bank taking care of the investments.
for clearer metrics to measure the performance of financial invest- CBB, Institute for Private Investors We’ve seen a shift in the balance
ments of a family. First, what is their goal in terms of a return? And, of power away from external financial service companies to the in-
secondly, how do the various managers they’re using compare, both vestor, thanks to technology and transparency. Up to now financial
in peer groups, but also on risk level. services companies had more information and more knowledge
DW, Forvest Trust Measuring returns is complicated. There are than their clients and than the investors. That is no longer the case.
returns in the short term, cashflow returns, and longer-term growth DW, Forvest Trust Yes, but even though there is much more informa-
and capital gain investments. You must also consider the volatility tion around, it may prove counterproductive and does not replace
and liquidity of the investment. If we are talking really about liquid the requirement for professional asset management, particularly
assets – yes, returns can be measured, and performance of the asset in a diversified portfolio. I agree that the family office may be able
managers can be compared, but families tend to have a broad port- to understand and evaluate the investment process, fees, type of
folio of diversified assets where comparison and performance need investments, etc, but it may not necessarily be able to evaluate the
to be carefully defined. risk/reward ratio and form a global view, for which a true profes-
JAMH, The Hutchinson Consultancy There’s probably too much short- sional is irreplaceable.
termism. When you are judging external portfolio money managers, CAL, Lowenhaupt Global Advisors We touched on diversification
fine, but, if one’s looking at unquoted situations or property, it may earlier. How are families diversifying their portfolios?
take a whole generation before you actually see the return. Families DA, AzureTax I don’t think I’ve come across a truly diversified family
should be looking longer term, not quarter by quarter. in terms of geographical spread and risk spread in Asia. If they have
DW, Forvest Trust That’s very true, but what about the family’s need a business, a lot of their money will still be in it. You hear about
for money right now? It is important to start by analysing the pur- families having investment committees, a pool of advisers on invest-
pose of the investment return. What is the money required for? And ment strategy, but they still often get overridden by the patriarch,
from there, go on and establish an investment policy. who says: “No, we must have x, y and z”.
CAL, Lowenhaupt Global Advisors As the individual answers the start- SH, Family Office Exchange There are regional differences. Contrast-
ing question: what is the wealth for? how should he or she consider ing Europe with the US, it seems that European families take much
Charles A Lowenhaupt (CAL – chair) is founder, Deborah Annells (DA), managing director of
chairman, president and chief executive of AzureTax Limited, has been at the forefront
Lowenhaupt Global Advisors, and a recognized of Hong Kong’s taxation profession for
industry leader in managing wealth for ultra- more than 10 years. In 2002, she established
high-net-worth families around the world. AzureTax to provide transparent, strategic and
He is also managing member of Lowenhaupt ethical international tax advisory services for
Global Advisor’s affiliated firm, Lowenhaupt & individuals and businesses.
Charlotte B Beyer (CBB) is the founder and chief Shardul Shroff (SS) is the managing partner of
executive of the Institute for Private Investors, the leading law firm of Amarchand Mangaldas.
whose online community and educational He is based in New Delhi. His family is the
programmes afford a safe harbour for 1,180 promoter family of the law firm, which
private investor members from 18 countries. originated as a family firm. The family still has
a substantial capital and profit share in the
Lee Thistlethwaite (LT) has more than 30 years JA Michael Hutchinson (JAMH) has been
of investment and private banking experience. assisting families for 30 years. He worked in
He worked for JPMorgan for 25 years before the Guinness family office for some 15 years.
retiring as a managing director in 2004. Since During that period, he realized the importance
then, he has been an independent adviser to of the personal touch, and subsequently
photography: Simon Clarke
several wealthy families in Europe and the established The Hutchinson Consultancy.
Middle East. He is based in Geneva.
Sara Hamilton (SH) is the founder and David Wollach (DW) is managing director
chief executive of Family Office Exchange. of Forvest Trust, a Swiss asset management
Recognized for her expertise on wealth owners company based in Geneva that specializes in
and their family offices, she and other Family the high-net-worth-individual market.
Office Exchange managers serve as strategic
advisers to sophisticated investors with assets
lasting beyond one generation.
Thayer Willis (TW) is an author and expert in John R Healy (JRH) was appointed adjunct
the area of wealth counselling. Since 1990, professor in the Centre for Nonprofit
she has specialized in helping people handle Management at Trinity College, Dublin, in
the psychological challenges of wealth. Born 2007. He serves on the boards of the Irish
into the founding family of Georgia-Pacific Landmark Trust and the Trinity Foundation, is
Corporation, she has a unique perspective on a member of the Irish government’s Forum on
wealthy families. Philanthropy, and sits on the advisory board of
the One Foundation.
Jeremy Arnold (JA) joined Barclays Wealth in
September 2006 as head of wealth advisory.
He is also a member of the Barclays Wealth
Management Committee. He is responsible for
providing advisory-based solutions including
fiduciary products and services. He has more
than 20 years’ experience.
greater control over the actual management of the assets that they’re LT In some cases, political disturbances have forced families to
involved with. They might have an average of 20 managers that diversify jurisdiction. Whether it is the Shanghainese leaving China
they’re working with when a US family would have 40. In Europe, in 1949, or it was non-resident Indians leaving the subcontinent in
families tend to be focused on issues related to business ownership, 1947, or the Jewish community, these diasporas have gone across
so we see less of a focus on investable equities and less confidence in different parts of the world. This is one reason Switzerland has at-
the public markets for the equity investments than we do in the US. tracted enormous amounts of money. The country has been a great
In real estate, US families might have an allocation of around 10%, beneficiary of political stability.
and among European families it’s much closer to 20%. In general, CAL, Lowenhaupt Global Advisors These historical, political events
Europeans are less invested in hedge funds and fixed income, and can shape an investment mentality. Here is an example. A family
more invested in the natural resources and energy area. I know in the US who moved there as refugees a generation ago
SS, Amarchand Mangaldas In India, diversification is growing. The has what they would call investment real estate in 10 jurisdictions
traditional investment has been gold. And clearly securities and around the world. What family members will say is: “This is good
mutual funds are the preferred investment vehicle. Art, however, for investment diversification”. What the patriarch would say is:
is becoming increasingly popular. And there are new commodities “This is good because if we ever have to leave one country we can go
funds setting up. From a geographical standpoint, there is a clear re- to another country”, and he’s not thinking at all about the financial
alization by families that this is the time to buy outside the country, returns, he’s thinking about lifestyle or life preservation.
and to hedge for the day when demand in India might go down. JA, Barclays Wealth That’s a good point. Lots of families and family
This might include business acquisitions outside India, so families offices, what they’re concentrating on is security, political risk, not
need corporate as well as personal investment advice. losing money. You may therefore not want to invest in emerging mar-
CBB, Institute for Private Investors There is certainly an interest from kets despite the growth prospects, you may actually want to go and
families worldwide in diversifying assets globally. Last year, 70% of buy prime real estate in London or New York. The outlook among
IPI members intended to increase their exposure outside their do- families differs. It is not just about going out into the world and try-
mestic market. Until recently US family offices were invested twice ing to make more money than the next money manager. If you look
as much in non-US markets as the average US pension plan. The at family offices, some are actually in wealth-creation mode and some
way they do it, however, is typically to look for referrals from trusted are in wealth-preservation mode. Their needs will differ.
advisers or their own peer group, and they will tend to find local
managers or global firms that have access to local managers. Philanthropy
CAL, Lowenhaupt Global Advisors What about jurisdictional diver- CAL, Lowenhaupt Global Advisors When talking about investments
sification of governance structure? How does jurisdiction dictate and family wealth, philanthropy has to be part of that conversation.
structure and planning? A wise woman I know said: “When I put money into my commu-
LT Sometimes structure is forced to be altered because family mem- nity, that is as much an investment for my children as any stock or
bers move to another jurisdiction. They may start off as one family bond I can buy”. How can we go about measuring return on philan-
with pooled assets in one jurisdiction but once one member moves thropic investments?
to another jurisdiction, it throws up all sorts of very difficult issues. JRH, Trinity College The problem is that the return on investment
Today this is happening more frequently and is causing huge debate. is a social return, for which no measurement system has yet been
DW, Forvest Trust It is important to diversify jurisdictionally in any devised. This allows people who are professionally involved in the
case. You can diversify assets, but if you don’t also diversify the world of philanthropy to play around quite a lot and be relatively
structure in which you are holding it, it can be devastating. unaccountable. One interesting development that will occur over
DA, AzureTax Having all your assets with one custodian, for exam- the next few years is that a lot of the new money that is coming into
ple, could be a danger. philanthropy through people who have made a lot of wealth in re-
DW, Forvest Trust Or holding all the assets in an investment com- cent years, particularly but not exclusively in the hedge fund area, is
pany that happens to get sued, for example, because of a private money that is going to be invested according to a much more com-
equity deal it is in. In that case all the assets would be exposed mercial model than has traditionally been the case in philanthropy.
unless the structure was diversified. And that I think is a very welcome development.
CBB, Institute for Private Investors Melissa Berman of the Rockefeller nature, which cuts across cultures. In many wealthy families, dif-
Philanthropy Advisory Group pointed out that this trend towards ficult relationships develop, damage the family and even some-
measuring philanthropy so exactly and in a commercial way can be times destroy it. When family members are hurting and angry, it
very counter-productive, because it’s almost like venture capital. If is human nature to withdraw, to pull in and to be psychologically
you went into venture capital, you cannot measure its success in the busy managing the pain. This makes effective philanthropy impos-
first three months. It sometimes takes years. So I think her position sible. If anyone in the family has the wisdom to acquire assistance
would be to have a solutions-based view, identifying a problem or in healing these relationships, the family members, as they heal,
cause and then being patient. So I just want to make sure we don’t will naturally become more expansive and generous. It is only
think of philanthropy as something that’s suddenly going to be hav- then that philanthropy can become a very fulfilling business in
ing a quarter-to-quarter measure. that family. This pre-philanthropy need must be addressed or the
CAL, Lowenhaupt Global Advisors Just as philanthropy went nation- philanthropy will be limited. Families in all cultures share this
wide with the Rockefellers and Carnegies, today philanthropy is characteristic.
going global with the Gateses and Turners. Is global philanthropy CAL, Lowenhaupt Global Advisors If philanthropy is not for ama-
different and will the global family think differently about philan- teurs, who can help families on setting up a structure?
thropy? Is diaspora philanthropy different from home-grown? JRH, Trinity College If families are pursuing their philanthropy at a
DA, AzureTax In the Far East, philanthropy has got a way to go. reasonable scale, it requires them to hire the best people they can.
Families make donations, but it is not their purpose in life. There is And it requires them to give those people the space and the author-
not a formal structure for philanthropy in the region. ity and the discretion to be effective.
JRH, Trinity College I think there are differences around the world, DW, Forvest Trust I agree it has to be done professionally, but one
and I think the differences are particularly cultural differences. My doesn’t have to be a chartered accountant to know the general
own country, Ireland, is a case in point where we’re trying to get concept of accountancy. So being part of a wealthy and charitable
philanthropy started after a period of rapid economic growth and family means that one also has the responsibility to have a general
the accumulation of significant wealth for the first time in history. concept of philanthropy, set the goals and directives and then leave
But there is a begrudging culture that does not value philanthropy. it to professionals to be carried out effectively.
The Bill Gates situation is obviously the polar opposite of that, and CAL, Lowenhaupt Global Advisors But does that detract from the
Gates’s philanthropy has won him much acclaim and we have all enjoyment of philanthropy?
forgotten about anti-trust issues. The process of philanthropy does JRH, Trinity College That’s true. The most compelling reason to get
not differ from culture to culture and from country to country, involved in philanthropy is that you can get more fulfilment and
however. You make your investments and you try to get the best bring more meaning to your life. Now you can’t on the one hand
return possible. But the level of sophistication is very different. And argue that, and on the other hand say you have to give it over to
philanthropy in any country has to go through a series of lifecycles. professionals. So, as with everything else in life, it’s a matter of get-
Initially it’s mostly heart; then it becomes a combination of head ting the right balance. I think they need to be engaged. They will
and heart, and then a little bit more head, as people try to measure not get fulfilment and meaning out of it unless they are engaged,
more precisely the impact of what they are doing, be more strategic in but they need to avoid micro-managing, and quite frequently they
their giving, less responsive. Philanthropy is a very fulfilling business, are seen to do that.
but it’s also a serious business, because you have a chance to achieve CAL, Lowenhaupt Global Advisors It may be that there are two ele-
significant social change, so it has to be approached carefully. And ments of philanthropy for a family. One is the professionalization of
I would hope that family philanthropists will realize that it has to the process of giving – grants, investments and so forth. The other is
be approached professionally and that it will be more successful if the strategic analysis of how to use philanthropy to help the family
families are prepared to create structures through which their philan- build its own functionality. Discretion is a key point too when con-
thropy can be pursued. And creating such structures requires them to sidering philanthropy. How and should families keep their giving
do something very difficult – they have to give up some control. confidential?
TW There is an important consideration for families before phi- JRH, Trinity College There are many influences on philanthropy that
lanthropy can be a very fulfilling business. This is a law of human require accountability and transparency of a kind that we have not
experienced in the past, and that obviously cannot be combined laboration that is aligned with investment interests that are closely
with the sort of discretion that a family would expect through a aligned with groups of families coming together in ways that are not
family office. Resolving that issue is quite difficult. permanent but in interactive ways to have an exchange or to co-in-
DW, Forvest Trust In philanthropy we speak about values. I think the vest or collaborate in some way. A network might be formed among
most valuable philanthropy is anonymous philanthropy, because families in different parts of the world because they bring something
that’s really what true philanthropy combined with value is. to the table that’s valuable to each other. There could even be multi-
JRH, Trinity College Anonymity is very attractive but it has some ple networks that a family might be part of. The structural relation-
downsides, and if you pursue your philanthropy at a certain scale ships will get even more complicated than they are today.
it becomes impossible to be anonymous. The solution, I think, is to JA, Barclays Wealth But in terms of governance structures, I’ve done
pursue your philanthropy discreetly and modestly. work with single families, and trying to work out the structures with
TW Philanthropy is such a tremendous tool for families. Discretion a single family is very difficult. But surely we’re not talking about
in the eye of the public, as you mentioned, is important. Yet among two families having one governance structure?
family members, philanthropy also produces recognition of a fami- CAL, Lowenhaupt Global Advisors Isn’t that a multi-family office?
ly’s strength. It is also a wonderful way to teach business principles JA, Barclays Wealth My perception of a multi-family office is that
to the family. you might get different families with separate legal structures but
they pool their resources and certain investments.
Collaboration SH, Family Office Exchange The ways in which we’ve seen families
CAL, Lowenhaupt Global Advisors An interesting point was made collaborate in a multi-family office structure are a precursor of future
earlier about collaborations and networking of families. Can we collaborative models. Private family-controlled buying consortia
return to that? that have the same kind of access as the larger institutions is more
CBB, Institute for Private Investors Yes, there seems to be a trend desirable for many of our members than collaborating with any
toward looking for partnerships with families in other countries, financial institution, where the senior executives are going to be
whether it’s philanthropy or on the investing front. We’ve seen a changing every three or four years.
shift in family attitudes about being singular in their focus and do- CBB, Institute for Private Investors Technology is fuelling the ability
ing these things themselves, to having a much greater appetite for of families to share their ideas globally.
collaborating with other family groups. What is not entirely clear is CAL, Lowenhaupt Global Advisors Sharing ideas around the world is
exactly how families will be able to do this structurally in ways that valuable. I know an Indian family that has a family business, and
hold up over long periods of time. part of their requirement is that any younger family member who
JAMH, The Hutchinson Consultancy Co-investing with families that wants to be part of the family’s wealth has to spend one month
they know and trust in the local jurisdiction is becoming more every summer doing social service work as a volunteer in the village
popular than just relying on local money managers, I agree. For ex- from which the family originated. That is a fine idea and I’ve taken
ample, agribusiness has been interesting, and international families that idea to a couple of US families.
are co-investing with local families in South America to gain access. CBB, Institute for Private Investors It brings great hope that the best
LT In Scandinavia you will increasingly come across co-investments practices globally will be seen by others and adopted. Wharton’s
of the major families. Why? It’s a relatively small region of the 10-year-old Private Wealth Management programme brings families
world, they do know each other quite well, they think in similar from 10 to 15 different countries in a room with the professors, and
kinds of ways,. Structurally this does indeed raise issues. If two then at night they’re comparing notes and learning from each other.
families get together, the first thing both of them independently LT This cross-border communication can also complicate issues for
and then jointly should be questioning is what is the match in families, however. In some parts of the world there are huge debates
terms of their families’ values and visions and ideals? And if those under way, whether they are gender debates or educational debates,
are mismatched, then I’m not sure that they ought to be talking to or religious debates about what the family thinks it ought to be
each other, and they certainly ought not to be paying any financial doing as opposed to what it wants to be doing, because there are fac-
adviser to try to hitch them together. tional differences of opinion, and very strong ones, being fed from
SH, Family Office Exchange I think in the future we will see col- different sources. Globalism, in a way, doesn’t help family unity.
CAL, Lowenhaupt Global Advisors Globalism is creating multi-cul- JAMH, The Hutchinson Consultancy When it comes to the holding
tural families, and that comes with challenges. structures, global banks can perhaps help families and family offices
SS, Amarchand Mangaldas That’s very true, and I think the diversity in the future. I have a fear as to the long-term future of the trust
aspect is something that families are actually living with in the sense as a structure, especially for Anglo-Saxon families. Governments
they’re not attempting to clone the same behaviour, going down the worldwide are very concerned about their tax base and are going to
route that diversity is a fact of life, and that is something that you continue to try to attack trust structures. It would, therefore, be un-
need to work around rather than against. wise for families to just rely on the trust. However, it will need much
JA, Barclays Wealth We do a lot of work in the Middle East, and we original thinking, probably not within family offices, but from ex-
see a lot of families being affected by this cross-cultural thing. For ternal advisers, to come up with some hybrid animal – whether it be
example, the patriarch made the wealth all in the Middle East, sends insurance-based, corporate-based or whatever – which can be used
the son off to college in the US or to England, and they come back as an alternative to the trust.
and they may have acquired conflicting values. CAL, Lowenhaupt Global Advisors What about investment?
TW The family culture is going to have a big effect on how well CBB, Institute for Private Investors I’m optimistic that the finan-
diversity can be developed. cial services industry grasps the change that has occurred among
investors. The industry is seeing the importance of transparency
Governance and technology, firms realize they need new definitions of risk and
CAL, Lowenhaupt Global Advisors Have any of us seen a governance outcomes, and that they have to decouple advice from product.
structure that allows for diversity and creativity, that is either work- The most advanced of these financial service entities will begin to
ing or, more importantly, we believe will be working over the next execute on this, and begin to act on what their clients and their
100 years? prospective clients are telling them.
SH, Family Office Exchange I have. We’ve spent a lot of time looking DA, AzureTax I think it’s very difficult for banks and major financial
at what kind of structures will allow flexibility and freedom, and yet institutions to actually act in that way. The bank or the financial
connectedness in ways that allow both principles to survive. Pos- institution is worried about its share price, it is worried about its
sible structures exist in different forms and accommodate different reputational risk, and it can’t actually do what is best for the family
philosophies for decision-making. There is the united-we-stand phi- in many cases. And usually the family has got 20 or 30 providers
losophy, which allows a family to stay together for generations by – why is it going to select one particular institution to pull together
defining their affinities and in what ways they want to be together. all the pieces for them, perhaps in terms of analysis of investments
Then there is the divided-we-stand philosophy, which allows owners or structural issues? I just don’t see it happening. And we’ve been
to invest together in flexible ways. They are divided in their owner- talking of the family office industry; well, there is no such industry.
ship and their legal structures, but able to use their investment It’s a wonderful idea to try to develop such an industry, but I just
dollars in collaborative ways. The approach allows owners to leave don’t think it exists in any formalized style actually. I see exchanges
whenever someone feels the need for independence. between families. I can see groups of people like this today, but I just
CAL, Lowenhaupt Global Advisors What do you think will be the can’t see anything more institutional or more significant than that.
challenge for the multicultural family? So I just can’t agree that financial services firms will be able to tackle
SH, Family Office Exchange It is a very complex challenge. We are the issues.
involved in a family business study in Asia looking at how govern- JA, Barclays Wealth Well, the job of financial institutions is to
ance is being structured to transfer wealth successfully from first- to provide family offices with what they need, not what they think
second-generation families in multicultural settings. It will take they can sell them, and that’s a challenge. I think the opportunity
about a year for us to gather enough data to analyse what works and in financial services is to get yourself back into the fiduciary space,
what doesn’t work. And, as we all know, what works for one family in the widest sense, and that is about giving family offices what
doesn’t mean it’s going to work for another family. they need. Family offices are very smart, so you have a much more
CAL, Lowenhaupt Global Advisors Let’s move on to discuss where we superior dialogue and it is good to deal with another institution,
feel financial service providers can truly help family offices, be that albeit that it has a private client bent to it. But I don’t see it quite as
in structure or investments. Michael, what are your views? blackly as you do. I wouldn’t be at a forum like this if it was an area
that was too difficult to deal with. I don’t think it is. real added value.
JAMH, The Hutchinson Consultancy I think it will take a lot of time CBB, Institute for Private Investors I disagree. It’s about talent, brain-
to rebuild the trust which is lacking between families, family offices power and solutions, and a family will go where they can find that.
and the global banks. And in the intervening period I think the And let’s face it, in many of these large financial institutions there
banks should be content just to be niche service providers to the are very bright people. Of course there is turnover of personnel, but
family offices in certain particular areas. Banks should be prepared to over-generalize about financial institutions is a big mistake, be-
to take a long-term view. The perception of families and family of- cause there are some very happy clients of some major institutions.
fices of the banks based on past experience is that there’s a constant JA, Barclays Wealth I think that’s absolutely right, and the challenge
turnover of staff, and so the families end up repeating their story to for the bank is to develop the solutions. That’s what the smart banks
the bank time after time. do. I think sometimes the professions think that that independent
DA, AzureTax It’s true. Every three years you end up repeating your- view can only exist within the professions but there is an alternative
self to the next family office person with whichever major bank you out there.
are dealing with. SH, Family Office Exchange Yes, I would say that at the heart of the
JAMH, The Hutchinson Consultancy The banks should not give up, challenge is the issue around customized advice and the ability for
though. I do think there is potential there if they take the long-term institutions to play a sophisticated role in supporting these families.
view, realize they have to rebuild this element of trust, do original I think it is unrealistic to think they’ll be able to take a holistic view
thinking and provide the solutions the clients want. I hinted at this of a multinational family that’s doing business in multiple coun-
earlier this afternoon – think up alternative structures for the trust, tries, because the scale is just so broad. Within any institution, the
realize the significance of where the family’s computer servers are, number of departments involved in serving that family are com-
so the bank’s computer servers shouldn’t be in or pass through the prised of territorial people who don’t want to expose their clients to
US, London or Frankfurt, otherwise the IRS and others are going potential risks inside the institution. So providing pieces of custom-
to claim jurisdiction. Start to think in an original and creative way, ized advice in a sophisticated manner probably changes the role that
and then family offices might come back. The problem with some an institution plays in support of a financial family and their family
multi-family offices is that they’re becoming banks. Families want office, but it’s a really valuable role to have them there as resources
original thought, original solutions – not product. Families want to access new and innovative strategies. I seldom meet sophisticated
access wisdom. family office executives who don’t want to know about the best
JA, Barclays Wealth I totally agree. What is very interesting about thinking inside leading financial institutions.
family offices is that they are very smart. You’re not dealing with CAL, Lowenhaupt Global Advisors But aren’t we also talking about
innocent, ignorant private clients, you’re dealing with highly the concept of trust? I see David’s point that maybe the banks are of-
sophisticated professionals, and they will come to you when they fering services beyond their competency, but families can deal with
need your product, not vice-versa. I think where you’re right is that. What I’ve noticed is that our clients no longer trust the banks.
about the fiduciary side of the business. Interestingly we are now JA, Barclays Wealth Institutional trust does exist. Families with
looking at things like using limited partnerships and so on as an huge amounts of wealth sometimes have difficulty in being able to
alternative to the trust structure, because it’s more transparent in entrust their money to individuals or a group of family members.
terms of ownership. There are still major families out there who will use institutional fi-
duciaries to hold their money, and that means that there is still that
Banking needs fiduciary trust that’s out there, it hasn’t completely gone away.
LT I think we need to be realistic. The banks can only go so far. They DA, AzureTax It has diminished though.
are always going to have to justify to their senior management that JA, Barclays Wealth I think some wealthy families get comfort from
they are making a decent return, as are those multi-family offices the institutional pocket.
that have sold stakes to global private banks. They can’t get away JAMH, The Hutchinson Consultancy That was the case, but I do think
from that. They will never, therefore, look at a family from a holistic tremendous damage has been done to the reputation of some very
point of view, whereas there are many other institutions that are not major Swiss banks over the last 12 months over the sub-prime situ-
banks that are geared to work with family offices accordingly. Most ation. How can you expect families or family offices to entrust their
families in some shape or form need a bank, and they will continue wealth to those organizations?
to use a bank, and those that like leverage have to have a bank. So CAL, Lowenhaupt Global Advisors Good banks say: “Look, we made
banks will be there, but I think that we just have to be realistic, they mistakes, we do make mistakes, but we also correct them, so you
will never take over the family wealth space. have our assurance that if we make a mistake, we’ll make you
DW, Forvest Trust We asset managers consider ourselves comple- whole”. People used to believe that but don’t believe that any more.
mentary to the banks. We believe banks are acting today beyond Trust has to be reintroduced somehow.
their core business to act as depositors and custodians and grant LT There’s going to have to be a huge rebuilding exercise. And
credit facilities in case of commercial banks. I think anybody who there’s also going to have to be a rebuilding exercise between two
uses the big banks today for anything other than that, is not re- very fundamental divisions within these global banks – the private
ally evaluating what he’s expecting to receive. We need the banks banks within the global banks, and the investment banks who’ve
because we need the security and financial facilities that the banks cooked up a lot of these investment products that have gone wrong,
offer us. I think the mistake is that many banks try to diversify in because the managements of these global banks wanted these divi-
areas where they can just not be competitive enough nor bring any sions to work more closely together.
Vienna-based Bank Gutmann:
Private banking “from
entrepreneur to entrepreneur”
With its unique approach of providing partner-led services to wealthy private clients for more than
30 years, an international team of experts, long-standing experience in the world of private equity
and a strong, client-driven system of values, Vienna-based Bank Gutmann is one of the top names in
private banking in Europe
Specializing in asset management and investment advice for foreign
The Bank’s partnership concept ensures personal
and domestic high-net-worth individuals and institutional investors, commitment and continuity in customer service
Vienna-based Bank Gutmann is a leading private bank in German-
speaking countries, operating also in central, eastern and south-
eastern Europe as well as in selected overseas markets. A strong
international private banking team works closely with an interna-
tional pool of advisers, including lawyers, tax advisers and business
consultants. Bank Gutmann currently manages total assets of more
than 10 billion euro for high- and very high-net-worth clients, trusts
and foundations, and institutional investors.
Owner-managed bank with tradition and a future
Founded in 1922 by the Gutmann family, one of central Europe’s
most influential industrial dynasties with a long tradition of entre-
preneurship as owners of leading industrial enterprises in the Aus-
tro-Hungarian Empire, Bank Gutmann has always been independent
and privately owned.
Since 1959, the Kahane family has been the majority shareholder
of Bank Gutmann AG. Twenty per cent of the share capital is held
by 10 senior managers of the bank. The consistent involvement of international private banking division, explains: “Over the years,
these partners in the day-to-day running of the business is one of we have established close links with leading international private
the bank’s key distinguishing features: Gutmann clients are served equity investors. This co-operation has provided us with an avenue
by the bank’s owners – from entrepreneur to entrepreneur. They to extraordinary investment projects. We are happy also to make
make their clients’ affairs their own business, for which they as- such investments available to our entrepreneurial clients, who
sume long-term responsibility. This Gutmann partnership concept would not be able to gain access to such projects on their own.”
ensures independent and speedy decision-making processes as
well as the special personal commitment of the bank’s owners, Gutmann, however, is also a sought-after partner for entrepreneurs
based on discretion and trust. who have sold shares in their companies to private equity inves-
tors and now wish to invest the proceeds in the best possible way.
At home in central and eastern Europe The Gutmann team is assisted by a network of international and
Not only its historic roots but also Vienna’s geographical proximity local best-of-breed advisers, among them law firms, tax advisers
to the east European markets explain why Bank Gutmann has been and business consultants.
working successfully with high-net-worth investors and entrepre-
neurs in this region for more than a decade. In addition to serving Through its many years in the business, Bank Gutmann has
customers in German-speaking countries, the bank focuses on developed not only a strong bond with the region but also a
customers from Hungary (where Gutmann has its own investment deep understanding of the needs of investors from these markets.
advisory subsidiary), from the CIS countries, the Czech and Slovak Thanks to its geographical location and very favourable legal and
Republics, Romania and Bulgaria, where it is expanding vigorously. fiscal conditions, Vienna is an excellent platform for serving inter-
national high-net-worth investors.
Apart from offering asset management, Bank Gutmann has suc-
cessfully added private equity umbrella funds to its portfolio of Individual one-stop asset management
activities. Gutmann invests not only in private equity funds itself Bank Gutmann offers personal, efficient and discrete customer service.
but also helps its customers to participate in attractive invest- Solid, customized solutions, security and capital preservation – that is,
ments. Sepp Maier, a Bank Gutmann partner and head of its the clients’ long-term interests – are top priorities. Gordian F. Gudenus,
Bank Gutmann CEO Rudolf Stahl about ...
... an owner-managed bank and personal ... “Tailoring” instead
responsibility: of “retailing” services
“Everything that concerns banking must be handled with utmost to customers:
care. Gutmann is an owner-managed private bank – therefore, our “A good private bank works
business policy is strongly marked by our partners and our system for its clients like their family
of values. Our partners are entrepreneurs and thus committed office. Our approach to serving
to the fortunes of the company and its customers over the long customers is highly personal,
term. This status breeds a special sense of responsibility. Each of with 200 specialists attending
our clients may trust that one of the partners will feel personally to fewer than 2,000 Gutmann
accountable for their affairs.” clients. Instead of selling off-
the-shelf products, we listen
... Bank Gutmann’s special offer in central and to our customers and find
eastern Europe: individual solutions to their
“I believe there are few specialists who offer their private banking specific requirements: which
Rudolf Stahl, CEO,
services in central and eastern Europe with as much sense of means we are “tailoring“ rather Bank Gutmann
purpose and reliability as Gutmann. Customers in this region enjoy than “retailing“. Trust in a
the advantage of receiving services from a Vienna bank that has private bank is also created by the right atmosphere and the convenience
always been firmly embedded in the traditions of Western banking it offers. Bank Gutmann boasts Vienna as its attractive base, excellent
while being able to fully exploit the logistic benefits of being based logistic links and a special cultural environment, with our account
in Vienna. There is hardly any major place in the region that cannot managers speaking our clients’ languages. This very personal approach
be reached within a few hours. For a long time, Vienna used to be in providing our services has enabled us to compete successfully
the eastern-most city of the free world. Now we benefit from the against the best international private banks. External experts such as the
fact that all decisions on business policy are taken in Vienna, in the international financial magazine Euromoney and the renowned German
heart of Europe, based on a profound understanding of the east publication Fuchsbriefe have consistently awarded us top ranks among
European market.” asset managers in German-speaking countries.”
deputy head of international private banking and a Gutmann partner, themselves of the services of a strong international private banking
explains: “We offer attractive services to high-net-worth individuals, en- team that is thoroughly acquainted with the markets and operates in
trepreneurs and their families. As the leading Austrian private bank with 16 languages,” is Gudenus’s concise description of Bank Gutmann’s
a strong international focus we offer our customers tailor-made cross- multi-cultural competence.
generational personal asset management. Thanks to the independence
of the bank’s owners, our recommendations are always objective and Core competence of portfolio management
not influenced by the interests of international financial groups.” Gutmann is also closely involved in financial studies and research.
In 2001, Bank Gutmann and the University of Vienna co-founded
For Bank Gutmann, private banking is more than simply the optimal the Gutmann Centre for Portfolio Management. Academic advisory
management of individual portfolios. The starting point for tailor- board members include not only numerous professors of notable
BANK GUTMANN • Partner-led private banking
made investment management is a careful analysis of each custom- international universities but also Nobel Prize laureate William Sharpe,
er’s current needs and plans for the future. “Our customers can avail inventor of the world-famous Sharpe ratio.
In portfolio management, Gutmann works closely with independent
research partners, the Gutmann Centre for Portfolio Management
and the world’s leading securities experts.
For further information, please contact:
Bank Gutmann Aktiengesellschaft
Gordian F. Gudenus, Partner
Schwarzenbergplatz 16, 1010 Vienna, Austria
Tel: +43-1-502 20-290
Modern wealth management with tradition and vision in www.gutmann.at
the heart of Vienna
The Standard Chartered
Private Bank: a new global
force in the market
The launch of The Standard Chartered Private Bank last year and its acquisition of American Express
Private Bank soon after made a big splash in the staid world of wealth management
Private banking is often regarded as a staid business where things move ternal expertise where
at a glacial pace. The launch of The Standard Chartered Private Bank in it is most needed.
mid-2007 changed that. Not only did the bank open in 11 markets in “Private banking is a
just five weeks, it then deepened its network to 30 offices in 17 markets strategic priority for
through the acquisition of American Express Bank in September 2007. A Standard Chartered,”
new – and different – force has clearly arrived in private banking. says Flavel. “The bank
works as a team
“We considered opening a single office before rolling out a broader net- – unlike some banks
work,” explains Peter Flavel, global head, The Standard Chartered Private where there is little
Bank.“But during the planning stages, we realized that we had the skills crossover of resources
and momentum to create a launch with a scope and scale never seen – so it was a natural
before in private banking. Moreover, our entry into private banking was choice for us to bring
driven by demand from our existing banking relationships and it made the resources of the
sense to meet those needs in the fullest way, in the shortest possible time.” entire bank to bear.”
Standard Chartered Bank operates in more than 70 countries across A perfect fit
Asia Pacific, North and South Asia, the Middle East, Africa, Europe and Having opened
the Americas. The bank derives over 90% of its profits from the trade its doors in mid- Peter Flavel,Global Head,
corridors of Asia, Africa and the Middle East, positioning it perfectly to 2007, The Standard The Standard Chartered Private Bank
grow a significant private banking operation. With a presence in nine Chartered Private
out of 10 of the world’s fastest growing markets for private banking, The Bank’s acquisition of
Standard Chartered Private Bank has a fertile basis for growth. American Express Private Bank that September – the deal closed at
the end of February 2008 – dramatically raised the bank’s profile and
Standard Chartered Bank’s existing connections and networks have expanded its reach and capabilities. The purchase tripled The Stand-
largely dictated its target market of high-net-worth first- and second- ard Chartered Private Bank’s distribution strength to 30 offices, gave it
generation entrepreneurs.“These people understand world markets a staff of 1,100 and took assets under management to over $35 billion.
and have businesses and family arrangements that span a number of “The opportunity to buy American Express Private Bank was too good
countries,” notes Flavel.“They need a bank that can meet their needs geo- to miss,” says Flavel.
graphically, technically, intellectually and intuitively. We are in the right
markets at the right time – offering the right investment opportunities.” The attraction of American Express Private Bank was not just its
client base. The bank used the same back office system as Standard
Crucially, The Standard Chartered Private Bank was able to draw on Chartered Bank, making integration of the two operations much
the full resources of its parent bank in planning its launch. While many more straightforward and seamless. Additionally, as a long-estab-
private banks operate at arm’s length from their parent, Standard lished operation American Express Private Bank already had a Geneva
Chartered Bank was eager to put the entire resources of its global booking centre, a trust and fiduciary capability, a discretionary wrap
operation at the disposal of its new operation. “Such a collaborative programme and a web offering that enabled a global account view.
approach was the only way to achieve the scale of operation we
wanted in a relatively short time,” says Flavel. “The Standard Chartered Private Bank had originally planned to spend
two years following the launch expanding its capabilities but Ameri-
More importantly, the decision to use Standard Chartered Bank’s can Express Private Bank was a perfect fit,” explains Flavel. “One way
commercial and other banking operations in the creation of a private of describing the relationship between our operation and American
banking business reflects the bank’s broader philosophy of using in- Express is that it was long on infrastructure and short on distribution
whereas we had the opposite position.” In addition, as a result of
the acquisition, The Standard Chartered Private Bank gained a Latin
American operation that extended its distribution.
Executives from The Standard Chartered Private Bank spent several
months on the road in advance of completion of the acquisition visit-
ing American Express Private Bank offices around the world develop-
ing relationships with new colleagues and learning about their opera-
tions. “That period of hard work enabled us to hit the ground running
on 1 March when the acquisition completed,” recalls Flavel.
To that end, when American Express Private Bank offices opened
worldwide on 1 March, each one had a senior representative from The Offices reflect the heritage of
Standard Chartered Private Bank in place to welcome staff. “The signal The Standard Chartered Private Bank
that sent to our new colleagues at American Express Private Bank was
crucial,” says Flavel. “It indicated that the staff in the acquisition were
valued highly and we were fully focused on working together to cre-
ate a better offering for our new clients.” A unique model
The Standard Chartered Private Bank stands out from other private
“With respect to American Express, which is obviously a strong payment banks through its combination of onshore and offshore banking.
services company, its private bank operation was not at the core of the While most private banks offer only offshore banking, Standard
business,” says Flavel.“Now its staff are at the centre of a new business Chartered is able to make full use of its existing formidable banking
THE STANDARD CHARTERED PRIVATE BANK • A new global force in the makret
in a dynamic bank and receive all the attention and investment that network – it is the longest established foreign bank in China and
implies. Their expertise is being used in a fuller way than in the past.” has the largest network of any foreign bank in India.
“We realized that we had the skills and momentum to create a launch with a
scope and scale never seen before in private banking”
Deepening relationships The ability to offer practical day-to-day banking services, in addition
The Standard Chartered Private Bank caters to two high-net-worth to the financial flexibility of offshore banking, gives The Standard
client groups: private banking clients, who typically have between $1 Chartered Private Bank customers a unique level of convenience and
million and $10 million invested with the bank; and key clients, who integration in their transaction and banking affairs. “Delivering a full
usually have more than $25 million in investments at the bank. In domestic banking service, including local transactions, in the markets
total, The Standard Chartered Private Bank has around 19,000 client in which we operate is hugely beneficial for clients,” says Flavel. “It just
accounts in the 17 markets in which it operates. makes life easier and ensures that The Standard Chartered Private
Bank provides a truly complete service.”
The Standard Chartered Private Bank’s sizeable client base is a huge
achievement for an operation that is just a year old. However, it is In its offshore banking operation, The Standard Chartered Private
important to remember that its parent bank, Standard Chartered, Bank is refreshingly honest about the realities of contemporary
has first-hand experience of wealth management services over many wealth management. “It’s tough to differentiate oneself in private
years and in many markets. “As a bank, we already have existing rela- banking through products,” admits Flavel. “Products are replicated
tionships with numerous customers that are qualified to be private extremely rapidly in today’s marketplace.” Consequently, Standard
bank clients,” says Flavel. “It is a question of talking to them and show- Chartered has decided not to play that game with its private
ing them our expertise and what we can deliver.” banking offering.
Indeed, while The Standard Chartered Private Bank is open to new clients The bank offers a full service open architecture client proposition that
to the Standard Chartered banking network, its initial push to gain clients gives access to a myriad of markets and products. The range includes
is focused on existing bank clients. With a huge client base in consumer liquidity funds and capital guaranteed products, client directed
banking, strong small and medium-sized corporate relationships and a mutual funds, discretionary portfolios – where professional manag-
powerful local corporate and multinational company franchise, the pri- ers handle asset allocation and investment selection – and signature
vate bank has plenty to build on.“The long-standing relationships of trust portfolios, which offer a choice of geographic focus and fixed income,
many people have with Standard Chartered are invaluable,” says Flavel. equity or balanced orientation and are managed by investment man-
“We aim to leverage them into partnerships that are deeper and broader.” agers chosen from the best in the business.
Each of these stages of the investment process, which anchor The
Standard Chartered Private Bank’s thinking and the way it interacts
with clients, requires a deep understanding of the mindset of clients.
As a private banking group built around growth markets, the bank has
an unparalleled insight into how its clients perceive risk and reward
and, more generally, how they live their lives. “Approaches to wealth
differ the world over and with operations in Asia Pacific, North and
South Asia, the Middle East, Africa, Europe and the Americas, we are
acutely aware of regional, local and, of course, individual differences,”
The private bank has 30 offices, globally However, while all global private banking markets differ, many that The
Standard Chartered Private Bank operates in have a number of features
Clients can also access structured products, offering exposure to cur- in common. Generally, clients in emerging markets have a reluctance to
rency, interest rate, bond, commodity, fund and equity markets. And subscribe to traditional asset allocation models that were designed for
alternative investments such as hedge funds and private equity – which clients who perceive wealth in strikingly different ways to them. “We find
offer exposure to asset classes that are less correlated than equities and that clients don’t want 25% of their money in markets that would be
bonds, and form an element of any balanced high-net-worth portfolio chosen by a US private bank, for example,” says Flavel. “In contrast, our
– are also available, as are straightforward investment options such as asset allocation models are built around what our clients find comfort-
foreign exchange trading. able in their local markets.”
“The point is that we have no internal fund management operation Similarly, The Standard Chartered Private Bank is able to accom-
because we want our clients to have access to the best wealth man- modate the investment behaviour of its client base because it
agement talent in the world, whoever may be providing it,” says Flavel. understands their expectations. “Obviously some of our clients have
“One way of describing the relationship between our operation and American
Express is that it was long on infrastructure and short on distribution whereas
we had the opposite position”
“We carefully select the best products in the world – either from single international lifestyles and might have the same approach to trad-
managers or from funds of funds that represent the best the industry has ing as any private banking client,” says Flavel. “But more commonly,
to offer. Our extensive array of products is designed to appeal to a wide our clients will have first- or second-generation wealth – which will
range of clients with varying needs and objectives – indeed, some of our have been gained by hard work and being market savvy and being
products are eligible to provide margin for a loan.” quite focused on trading.”
Rather than aiming to create every product that a client might require Typically, such clients have higher return expectations than tra-
internally, The Standard Chartered Private Bank is able to focus on ensur- ditional private bank clients. “It is accurate to say that our clients
ing its clients get the leading offering – whatever investment choice they might be higher on a risk/reward scale than clients in, for example,
make – while leveraging its heritage and expertise in dynamic growth Europe,” says Flavel. “What we observe is that they are generally
markets to make the right choices for clients. And, most importantly, The averse to handing over large sums of cash to a banker – who has
Standard Chartered Private Bank is able to add value – in addition to just flown in from head office – before they jet off on long holidays.
gaining access to the world’s leading financial products – by understand- They want to be actively involved in how their money is invested
ing the needs and expectations of its clients. and many are likely to be quite active traders.”
Perceiving risk and reward In practical terms, that means that The Standard Chartered Private
The Standard Chartered Private Bank has a steadfastly principled approach Bank relationship managers must be considerably more skilled
that informs its entire wealth management strategy. It aims to develop a than a traditional private banker. “For our clients, this is not just a
thorough understanding of, and appreciation for, each client’s unique cir- feel-good relationship with someone who can be relied on to select
cumstances and objectives. Then, working with clients to understand their a good wine at lunch and who can help settle family disputes,” says
vision and expectations, the bank’s relationship managers devise a strate- Flavel. “This is a dynamic partnership with a professional that has
gic, long-term approach focused on clients’ needs, rather than individual technical competence in multiple markets and asset classes and
financial transactions, before recommending innovative financial solutions who understands investment products, foreign exchange and the
that meet an objective assessment of each client’s goals. complexities involved in managing a family’s wealth.”
cycle because, in the long term, day-to-day timing is insignificant in terms
of returns compared to the long-term returns that can be created by tak-
Serving you ing committed views on where value is located,” says Flavel.
The Standard Chartered Private Bank delivers great
opportunities and benefits to clients, including: In turbulent times clients appreciate the solidity and financial stability
of Standard Chartered, which has a banking heritage spanning more
• An unwavering corporate commitment that focuses on than 150 years. Rated A+ by Standard & Poor’s, Standard Chartered
serving the long-term wealth management needs of recently reported results for the six months ending 30 June 2008 that
clients and their families through generations; showed operating income 33% higher, profit before taxation up 31%
– an interim record for the bank – and total assets 34% higher at $397
• A pledge of exceptional client service from experienced billion “We are well capitalized and, as a group, we have a clear and con-
private bankers and the account management team; sistent strategy, which is do business in markets we know, with products
we understand fully, with clients with whom we build deep relation-
• Connecting clients to opportunities in a broad network ships. This is important to clients and the Bank as a whole.” says Flavel.
encompassing 30 locations worldwide focused on the
growth markets of the world; Future plans
With the acquisition of American Express Private Bank finally com-
• A wide range of wealth management services – from pleted in February this year, The Standard Chartered Private Bank has
investment management and estate planning to credit plenty to occupy it at the moment. “We have plenty of growth oppor-
services and more; tunities on the horizon through our existing client base – both clients
that were previously with American Express Private Bank and those
THE STANDARD CHARTERED PRIVATE BANK • A new global force in the makret
• An award-winning offering – The Standard Chartered clients of Standard Chartered that are qualified to become clients of
Private Bank was named Global Best Private Bank the private bank,” says Flavel.
2008 by Euromoney, which cited the bank’s strength
in risk management, focus on growth markets, strong But while The Standard Chartered Private Bank may be spending
performance, growth in client base and commitment to much of the next year further integrating American Express Private
client service and advisory as factors in its success. Bank, Flavel says that he is eager to consider new markets for the bank
for expansion. “We’re an ambitious operation – that’s what makes us
so successful for our clients – and necessarily we are always thinking
bigger,” he says. With Standard Chartered in 70 markets worldwide
and private banking currently in 30 locations, there is plenty of scope
Seeing through the cycle for expansion in the future.
While many emerging markets initially escaped the credit crunch that
began in the summer of 2007, markets across Asia – and to a lesser Regardless of how, or where, The Standard Chartered Private Bank
extent, Latin America and the Middle East – have come under increas- grows in the coming years – and it seems certain that it will continue
ing pressure in 2008 as evidence has grown of a global economic to be one of the fastest-growing banks in the sector – Flavel says that
slowdown. “We remain cautious about the short-term prospects for the principles that the bank launched with will remain central to its
global markets,” says Flavel. “There will clearly be more bumps to vision. “Our success has been built on a clear philosophy of wealth
come before markets strengthen.” management that reflects the expectations of our clients,” he says.
“There can be no compromise in terms of quality, service, investment
However, Flavel notes that the fundamentals of many emerging choices or flexibility. We are here to meet clients’ needs.”
markets remain indisputably positive. “Growth in the most important
emerging markets – China and India – remains at a multiple many
times higher than OECD markets,” he says. “We still expect 7-9% a year.”
For further information, please contact
Growth in a number of other emerging markets, such as those in the
Middle East, also remains impressive as many countries in the region
reconfigure their economies – using massive oil revenues – to be less
reliant on oil production in the long term.
“It is vital for clients to have a strong partner that understands when
markets or asset classes are overheating and caution is required and,
equally where new opportunities may be emerging where it’s important
6 Battery Road
to be an early investor,” says Flavel. The Standard Chartered Private Bank
continually evaluates markets, products and asset managers on its clients’
behalf to ensure that its recommended solutions deliver the results that
clients expect. However, the bank is also keen to help clients see beyond
short-term fluctuations in markets.“We help our clients see through the
World Citizen Services:
Life moves in good company
High-net-worth individuals enjoy increasingly mobile lifestyles including business or residences
outside their home countries. However, many complexities arise from the multiple legal and fiscal
regimes associated with an international existence. World Citizen Services, recently launched by
ABN AMRO Private Banking, can offer these clients financial ease abroad
World Citizen Services is an exclusive ABN AMRO Private Banking serv-
ice concept that guides clients through new challenges abroad. As
we see many of our clients moving their lives across borders to coun-
tries like France and Spain, ABN AMRO Private Banking has extended
its existing service with local World Citizen Services offices on the
Côte d’Azur and the Costa del Sol. World Citizen Services is ready to
help clients in any respect: from finding and financing a home abroad
to tips on how to get settled in their new country. Regardless of the
financial requirements, we make sure that all matters are arranged
to perfection in clients’ new countries of residence, so that they can
focus on enjoying their chosen lifestyles.
A local guide
Local support can be invaluable to clients who are expanding their
lives across borders. Our local World Citizen Services teams give World Citizen Services help ease the complexities of life abroad
access to their local network, as well as to any financial service in our
global ABN AMRO network, as well as to any financial service in our having a home abroad? World Citizen Services has already helped
global ABN AMRO network – with all the support of a top 10 global many clients purchase homes abroad. The local team has developed
private bank. Our local teams are knowledgeable about local real relationships with brokers over many years, and knows the market for
estate, legal advice, credit requirements and taxation. They are there high value home like no other. We know what’s involved in buying a
to advise clients on all their questions regarding living in their new home abroad and can point out relevant issues for the client.
“Local support can be invaluable to clients who are expanding their lives
across borders. Our local World Citizen Services teams give access to their local
network, as well as to any financial service in our global ABN AMRO network. ”
country: from questions about every financial matter abroad to infor- Together with the client World Citizen Services will look for the best
mation about the region and local market. World Citizen Services can financing, reviewing all opportunities to find the right solution. For
provide both immediate solutions and long-term arrangements. instance, financing with a client’s own capital is not always advisable. A
mortgage may be more beneficial, for which we can offer various options.
Our local teams can speak to the client in his own language. Our
teams speak French, Spanish, English, Dutch and German, and know Daily banking ease
best how to get things done in their respective countries. They com- A move abroad requires adjustments and familiarization with local cus-
bine expertise and experience to provide personal, local advice that is toms, traditions and (im) possibilities. This includes banking. Some things
completely customised to a client’s situation and preferred location. are exactly as they are at home; others are completely different. World
We want clients to experience unlimited enjoyment as they join the Citizen Services helps clients navigate their new banking environments by
exclusive company of those who have turned their international facilitating the payment ease to which they are accustomed. In France, for
lifestyles into an art form. example, we can quickly arrange a current account for all banking needs,
including a cheque book, credit card or online facilities. Our service ranges
A home abroad: from dream to reality from a single, simple account to internationally distributed, multiple
Where do you start once you have decided to realize your dream of account management. Our teams work with the worldwide ABN AMRO
network, allowing a client’s total account management to run smoothly.
your life abroad
your life abroad
our local support
our local support
France: Banque Neuﬂize OBC, Palais Marie-Christine,
+33 49 70 38 332
20 Rue de France, Nice. Tel. +33 497 038 332
Spain: ABN AMRO Private Banking, Avenida Jose Banus,
Ediﬁcio Malaga Local 2-B, Marbella, Malaga. Tel. +34 952 90 88 43
More information at www.worldcitizenservices.com
or send an e-mail to email@example.com
world citizen services
life moves in good company Making more possible
080410_02E ABN_A5.indd 2 08/08/08 4:57:10 PM
Estate, tax and legal advice In addition to golfing events, World Citizen Services organizes other
An international move can have a number of consequences related to activities that range from culture and entertainment to informational
taxes or legal rights. A foreign owner of a French home, for example, sessions on financial issues, and provide information on third-party
has to take various tax issues into account. He will probably face events planned in their areas. All this provides the client with an
double taxation. He may also be categorized differently by the tax excellent opportunity to expand his networks in France and Spain.
authorities in each of his countries of residence and has to consider a
number of other important issues. World Citizen Services ensures that Our services
the client receives specialized, made-to-measure tax advice from our These are just some of the ways in which World Citizen Services helps
international estate planning specialists. They have solid experience clients to flourish in their new environments. From insurance to ad-
providing international tax and legal guidance to private banking cli- vice to events, our expertise helps them to move their lives smoothly ABN AMRO • World Citizen Services
ents so as to preserve wealth, make optimal arrangements and avoid and successfully.
any undesirable fiscal consequences.
For further information, please contact
A new environment often means acquiring new social and commer-
cial contacts and experiences. World Citizen Services welcomes the
client in our network by inviting him for local client activities in France
and Spain. These activities range from golf tournaments to economic
forums. For example, in France we were the main sponsor of the Day
for Change benefit golf tournament at the Royal Mougins Golf Club,
which concluded with an attractive evening programme.
France: Ab Meijer AA_fullcolourC.eps
+33 497 038 332
In Spain, World Citizen Services Spain sponsored the Sotogrande
Spain: Marianne de Wit +34 952 90for coated paper
ABN AMRO full-colour
Width shield: 20 mm
Silver Cup, Spain’s top polo tournament on the Costa del Sol, in 2007. www. worldcitizenservices. com
Overlap: 0,05 mm
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 &