Wealth Management

2 lessons @ 45 min.

V 1.0

Guest Speaker
Marc Lussy objtec GmbH Senior Manager Schoenenbergstr. 100 8820 Waedenswil ZH marc.lussy@objtec.ch marclussy@bluewin.ch More than 20 years experience in Banking Trader, Relationship / Portfolio Management and Project Manager

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Wealth Management
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V 1.0

Why do wealthy individuals need advice to manage their assets?

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Wealth Management
2 lessons @ 45 min.

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October: This is one of the particularly dangerous months to speculate

in stocks. The others are July, January, September, April, November, May, March, June, December, August and February. Mark Twain

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Wealth Management
2 lessons @ 45 min.

V 1.0

Market shares global AuM (on- and offshore)

Total around 110 trillion USD

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Wealth Management
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Market shares AuM offshore

Total around 7 trillion USD

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Wealth Management
2 lessons @ 45 min.

V 1.0

Importance of Wealth Management for a Global Bank

Core Results Credit Suisse by Division in Billions 2007 - 2010
10

2007

2008

2009

2010

-5

Private Banking Investment Banking Asset Management Shared Services

-10

-15

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Roles in Wealth Management

Investment Consultant

Portfolio Manager

Financial Planer

Relationship Manager (RM)

Tax Specialist

Analyst

Trader

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Wealth Management
2 lessons @ 45 min.

V 1.0

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 ]

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Wealth Management
2 lessons @ 45 min.

V 1.0

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

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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

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Wealth Management
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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

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Wealth Management
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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

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Wealth Management
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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

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Wealth Management
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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

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Wealth Management
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Classification of clients Onshore (assets are managed in country in which owners of assets are resident) Offshore (assets are managed country in which owners of assets is not resident) Retail Institutional Affluent (less than $1million but more than $100,000 ) High Net Worth Individuals ($1million to $50 million) Ultra High Net Worth Individuals (more than $50 million)

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Wealth Management
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Advisory approach Analysis Financial concept Profile Strategy Implementation

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Wealth Management
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Advisory approach - 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

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14 Wealth Management...
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Advisory approach 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

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Wealth Management
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Advisory Approach Client profile 2/3 Risk ability It defines clients ability to cope with financial losses without a noticeable effect on their standard of living Risk tolerance It defines how a client deals emotionally with investment risks

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Wealth Management
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Advisory Approach 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

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Wealth Management
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Advisory Approach Strategy

Risk profile Low Moderate Medium Enhanced High CBI

Investment strategy Fixed-income Income-oriented Balanced Captial-gains-oriented Equitities

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Wealth Management
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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

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Wealth Management
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. . . the future

?
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CRM Tools in Wealth Management 1/3

Operational CRM market operation Analytical CRM

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Wealth Management
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CRM Tools in Wealth Management 2/3

Issues
- Get a new copy of passport due 25.5.11
- Needs to sign risk disclosure due 31.12.11 - Invite for gulf turnament

Remarks
05,1,11 Became father Name

Client data

Birthday 10,2,11 Would like to invest in commodities Riskprofile 15,3,11 Plans to transfer more money 20.4.11 Wife had car accident Cliensince Monthly reports Hobbies Name wife Number of Children Responsibel RM Relations with other clients

Portfolio

Performance

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Wealth Management
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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

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Wealth Management
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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
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