The document is a certificate from a banking and insurance course taught by Prof. Dr. Hans Brunner in November 2011. It provides an overview of the wealth management industry, including the roles of relationship managers and different types of client mandates. It discusses how wealth management has evolved from a focus on banking secrecy and tax optimization in the 1990s to the present environment where clients are more informed, loyal to performance over institutions, and impacted by increased competition, regulation, and technology. The future of wealth management may involve new markets, increased client retention efforts, more tools like CRM, and potential industry consolidation.

1. V 1.0
Certificate of
Banking & Insurance
Banking
Wealth Management
$ CBI Prof. Dr. Hans Brunner
$ $
Professor for Banking and Finance
School of Business Administration Fribourg
November 2011
10.11.11 1

2. Wealth Management V 1.0
2 lessons @ 45 min.
Guest Speaker
Marc Lussy
objtec GmbH
Senior Manager More than 20 years experience in Banking
Schoenenbergstr. 100 Trader, Relationship / Portfolio Management and Project Manager
8820 Waedenswil ZH
marc.lussy@objtec.ch
marclussy@bluewin.ch
CBI Financial Markets – Prof. Dr. Hans Brunner 2

3. Wealth Management V 1.0
2 lessons @ 45 min.
Index of Contents
Overview
Roles and Products
Advisory Approach
From the Past to the Future
CBI Financial Markets – Prof. Dr. Hans Brunner 3

4. Wealth Management V 1.0
2 lessons @ 45 min.
Overview
CBI Financial Markets – Prof. Dr. Hans Brunner 4

5. Wealth Management V 1.0
2 lessons @ 45 min.
Why do wealthy individuals need advice to manage their assets?
CBI Financial Markets – Prof. Dr. Hans Brunner 5

6. Wealth Management V 1.0
2 lessons @ 45 min.
For the same reasons ill people need a doctor
Expertise Experience
Hold clients
Diagnosis
hand
CBI Financial Markets – Prof. Dr. Hans Brunner 6

7. Wealth Management V 1.0
2 lessons @ 45 min.
What is ment by Wealth Management?
Providing highly customized and sophisticated investment management and
financial planning services to wealthy individuals.
Which client groups are covered....and which not?
O Ultra High Networth Individuals
O Affluents
O High Networth Individuals
X Retail
X Institutionals
O Very High Networth Individuals
CBI Financial Markets – Prof. Dr. Hans Brunner 7

8. Wealth Management V 1.0
2 lessons @ 45 min.
Classification of Clients by Wealth
Ultra
HNWI
$ 50 million
Very HNWI
$ 5 million
HNWI
$ 1 million
Affluent
$ 100´000
CBI Financial Markets – Prof. Dr. Hans Brunner 8

9. Wealth Management V 1.0
2 lessons @ 45 min.
Classification of Clients by Residence
Onshore Offshore
Resident
Resident
Management
Management
of Assets
of Assets
assets are managed in country in assets are managed in country in
which owners of assets is resident which owner of assets is not resident
CBI Financial Markets – Prof. Dr. Hans Brunner 9

10. Wealth Management V 1.0
2 lessons @ 45 min.
Types of banks in Wealth Management
 Global banks with private banking units
 Traditional offshore focused private banks
 Traditional onshore focused private banks
 Retail or affluent focused local banks
CBI Financial Markets – Prof. Dr. Hans Brunner 10

11. Wealth Management V 1.0
2 lessons @ 45 min.
Market shares global AuM
(on- and offshore)
Total around 110 trillion USD
CBI Financial Markets – Prof. Dr. Hans Brunner 11

12. Wealth Management V 1.0
2 lessons @ 45 min.
Market shares AuM offshore
Total around 7 trillion USD
CBI Financial Markets – Prof. Dr. Hans Brunner 12

13. Wealth Management V 1.0
2 lessons @ 45 min.
Importance of Wealth Management
for a Global Bank
Core Results Credit Suisse by Division in Billions 2007 - 2010
10
2007 2008 2009 2010
5
0
Private Banking
Investment Banking
Asset Management
-5 Shared Services
-10
-15
CBI Financial Markets – Prof. Dr. Hans Brunner 13

14. Wealth Management V 1.0
2 lessons @ 45 min.
Roles and Products
CBI Financial Markets – Prof. Dr. Hans Brunner 14

15. Wealth Management V 1.0
2 lessons @ 45 min.
Roles in Wealth Management
Investment Portfolio
Consultant Manager
Relationship
Financial Tax
Manager
Planer Specialist
(RM)
Analyst Trader
CBI Financial Markets – Prof. Dr. Hans Brunner 15

16. Wealth Management V 1.0
2 lessons @ 45 min.
Role Relationship Manager (RM)
Relationship managers are the customer service giants that own the
customers, know everything about them, manage that knowledge as an
asset, and are able to meet the full complement of financial needs.“
[Ernst & Young ]
CBI Financial Markets – Prof. Dr. Hans Brunner 16

17. Wealth Management V 1.0
2 lessons @ 45 min.
Key Activities of an RM
 Client retention
- Make sure that existing clients stay with the bank
 Client selection
- Identify profitable clients
 Client Acquisition
- Increase client base
CBI Financial Markets – Prof. Dr. Hans Brunner 17

18. Wealth Management V 1.0
2 lessons @ 45 min.
Key skills and Know-how needed
to be a successful RM
 Profound product know-how
 Social Skills
 Sales Skills
 Knowledge of compliance regulations
 Know-how IT Tools
CBI Financial Markets – Prof. Dr. Hans Brunner 18

19. Wealth Management V 1.0
2 lessons @ 45 min.
Mandate types 1/3
 Advisory Mandate
- Client makes investment decisions himself
- RM provides specialists expertise and current
market information
- Client follows the markets on a regular base
CBI Financial Markets – Prof. Dr. Hans Brunner 19

20. Wealth Management V 1.0
2 lessons @ 45 min.
Mandate types 2/3
 Trading / Investment Consulting Mandate
- Client makes investment decisions himself
- Short term approach
- Active Trading
- Market sentiment is more important than fundamentals
- Relationship Manger / Investment Consultant provides trading ideas on
a daily base
- Client follows the markets on a daily base
CBI Financial Markets – Prof. Dr. Hans Brunner 20

21. Wealth Management V 1.0
2 lessons @ 45 min.
Mandate types 3/3
 Discretionary Mandate
- Relationship / Portfolio Manager makes investment decisions
- Relationship Manager informs the client several times per year about
development of the portfolio
- Client does not need to follow the markets
CBI Financial Markets – Prof. Dr. Hans Brunner 21

22. Wealth Management V 1.0
2 lessons @ 45 min.
Advisory Approach
CBI Financial Markets – Prof. Dr. Hans Brunner 22

23. Wealth Management V 1.0
2 lessons @ 45 min.
Advisory Process
 Analysis
 Financial concept
 Profile
 Strategy
 Implementation
CBI Financial Markets – Prof. Dr. Hans Brunner 23

24. Wealth Management V 1.0
2 lessons @ 45 min.
Analysis
 Investments
- Get an idea of size and asset types
 Wealth creation
- Inflows such as earnings on assets, salaries, expected inheritance etc.
 Liabilities
- Current and future financial obligations
 Expenditures
- Living costs, regularly payments, tax payments etc
CBI Financial Markets – Prof. Dr. Hans Brunner 24

25. Wealth Management V 1.0
2 lessons @ 45 min.
Financial concept
 Channeling and visualization of gathered information including clients
asset and liabilities, annual income and annual spending
 The financial concept must reflect the clients overall situation
 Allows the RM to provide his client a personalized investment solution
CBI Financial Markets – Prof. Dr. Hans Brunner 25

26. Wealth Management V 1.0
2 lessons @ 45 min.
Client profile 1/3
Adequate classification of the client in a client profile is a key success factor
of a successful advisory process
Risk ability
Risk profile
Risk tolerance
Client profile
Service profile
CBI Financial Markets – Prof. Dr. Hans Brunner 26

27. Wealth Management V 1.0
2 lessons @ 45 min.
Client profile 2/3
Risk ability 20
18
It defines clients ability to 16
14
cope with financial losses 12
without a noticeable effect 10
8
Spalte C
on their standard of living 6
4
2
0
1 2 3 4 5 6 7 8 9
Risk tolerance 20
18
It defines how a client deals 16
emotionally with investment 14
12
risks 10
Spalte C
8
6
4
2
0
1 2 3 4 5 6 7 8 9
CBI Financial Markets – Prof. Dr. Hans Brunner 27

28. Wealth Management V 1.0
2 lessons @ 45 min.
Client profile 3/3
Service profile
In order to suit different client requirements it is very important to
understand which services he needs and to define an according service
profile
Possible service profiles are:
 Advisory mandate
 Investment consulting
 Discretionary mandates
CBI Financial Markets – Prof. Dr. Hans Brunner 28

29. Wealth Management V 1.0
2 lessons @ 45 min.
Strategy
Risk profile Investment strategy
Low Fixed-income
Moderate Income-oriented
Medium Balanced
Enhanced Capital-gains-oriented
High Equities
CBI Financial Markets – Prof. Dr. Hans Brunner 29

30. Wealth Management V 1.0
2 lessons @ 45 min.
Implementation
 Implementation and maintenance of a strategy is an continuous process
 Every strategy must be reviewed on a regular base
 Risk control for every investment is a must
Implementation Control Adjustment
CBI Financial Markets – Prof. Dr. Hans Brunner 30

31. Wealth Management V 1.0
2 lessons @ 45 min.
From the Past to the Future
CBI Financial Markets – Prof. Dr. Hans Brunner 31

32. Wealth Management V 1.0
2 lessons @ 45 min.
Wealth Management – from the past to the future
Excellent Service
Personal Relation Performance
1990 2020
CBI Financial Markets – Prof. Dr. Hans Brunner 32

33. Wealth Management V 1.0
2 lessons @ 45 min.
Wealth Management – from the past to the future
1990 2020
Expertise
Expertise
Experience
Experience
Diagnosis
Hold clients
hand
Hold clients
hand
Diagnosis
CBI Financial Markets – Prof. Dr. Hans Brunner 33

34. Wealth Management V 1.0
2 lessons @ 45 min.
Wealth Management – the past
 Strong banking secrecy
 Main goal of a lot of clients was tax optimization
 Performance of limited importance
 Clients had limited access to market information (→ Newspaper)
 Clients were loyal to the their bank
CBI Financial Markets – Prof. Dr. Hans Brunner 34

35. Wealth Management V 1.0
2 lessons @ 45 min.
Wealth Management – the present . . .
Client
Well informed
Decreasing loyalty
Complex products
Competition Technology
New competitors Challenges Internet
Trading Platforms/ Client Retention Mobile
Discount-Broker Increase of Sales Potential e-commerce
Consolidation
Bank
Restructuring
Compliance / Legal
Higher Quality Standards
CBI Financial Markets – Prof. Dr. Hans Brunner 35

36. Wealth Management V 1.0
2 lessons @ 45 min.
CRM Tools in Wealth Management 1/3
 Operational CRM market operation
 Analytical CRM
CBI Financial Markets – Prof. Dr. Hans Brunner 36

37. Wealth Management V 1.0
2 lessons @ 45 min.
CRM Tools in Wealth Management 2/3
Issues Remarks Client data
- Get a new copy of passport due 25.5.11 05,1,11 Name
Became father
- Needs to sign risk disclosure due 31.12.11 Birthday
10,2,11
- Invite for golf turnament Would like to invest in commodities Riskprofile
15,3,11 Client since
Portfolio Plans to transfer more money
Monthly reports
20.4.11
Wife had car accident Hobbies
Performance Name wife
Number of Children
Responsibel RM
Relations with other clients
CBI Financial Markets – Prof. Dr. Hans Brunner 37

38. Wealth Management V 1.0
2 lessons @ 45 min.
CRM Tools in Wealth Management 3/3
 Where can a CRM add value?
 Measure activities
 Analysis of current situation
 Identification of target clients
 Manage sales activity
 Quick access to client information
 Consulting
CBI Financial Markets – Prof. Dr. Hans Brunner 38

39. Wealth Management V 1.0
2 lessons @ 45 min.
. . . the future
?
CBI Financial Markets – Prof. Dr. Hans Brunner 39

40. Wealth Management V 1.0
2 lessons @ 45 min.
Wealth Management . . . the future
Threats
 Weaker banking secrecy
 Regulations
 Decreasing margins
 Increasing costs
 Increasing quality standards
The way forward
 New markets (BRICS / Emerging Markets)
 Increased effort for client retention
 Increased tool support (CRM, product selection)
 BPO (Business Process Outsourcing)
 Mergers / take overs of smaller banks
CBI Financial Markets – Prof. Dr. Hans Brunner 40

41. Wealth Management - Impressions V 1.0
2 lessons @ 45 min.
CBI Financial Markets – Prof. Dr. Hans Brunner 41