Affluent investors abandon traditional wealth managers

Lorna Bourke

As the big banks write off billions, the dissatisfied ‘new rich’ are switching to the rising stars among the smaller independent banks, says Lorna Bourke

‘Clients are moving to independent banks partly because of their unlimited liability structure. They take the view that partners exposed to the risk of losing everything can be relied upon to guard their clients’ cash better than large investment banks.

Swiss banks with similar structures, such as Pictet, Lombard Odier Darier Hentsch and Wegelin & Co, ‘are gaining assets for similar reasons,’ Bain says.

Williams, too, highlights the search for security. ‘The rich traditionally keep their money with the same wealth managers for all their lives,’ says Williams. ‘But JP Morgan Private Bank and Pictet were two institutions that had big inflows of new money in the first quarter.’

According to Williams, the reason why clients usually change wealth manager is the price of products and services. But the credit crunch has changed all that. ‘Trust is uppermost in the minds of many clients now,’ he says.

Bain’s choice of banks worth considering includes Julius Baer, which now owns GAM, the asset management firm that was formerly part of UBS; Sarasin, also a big fund manager; and of the bigger investment banks, Credit Suisse and JP Morgan Private Bank. JP Morgan Asset Management, the fund management arm, has been named Leading Pan-European Fund Management Firm in the Thomson Reuters Extel Survey 2008.

For those looking for a young, dynamic individual to manage their money, Boris Collardi, chief operating officer of Julius Baer’s private banking unit, has topped the inaugural 2008 ‘Wealth Bulletin 40’ list of rising stars aged 40 or under in European wealth management.