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GLOBAL FAMILIESCOVERSTORY


Weneed to take more of an active role in voting against certain positions, when boards are not fully representative


DELYTHRICHARDS KLEINWORTHAMBROS


unreasonable requests” regularly exposed the flimsiness of private banking structures. A decade later, the challenges


have intensified. “Private banks must be careful what they wish for,” says Mr Aquilina, who also held senior roles at HSBC and Merrill Lynch. “Most of these families are still active. They are less interested in an extra 2 or 3 per cent return on portfolios than asking how you as an institution can help them in their business.” This starts with financing loans,


including specialism in derivative structures, capital protection and foreign exchange, all requiring investment banking expertise. Banks looking to combine these specialisms with their ability to service the top tier of family clients, although improving, still face an uphill struggle. Today, the notion of honing a


crack team of top bankers dealing with 100 leading global families is the only way forward, believes Mr Aquilina. “Family offices have their own highly experienced corporate finance staff, so selling mutual funds to them is not what they are looking for,” he says. “Institutions like UBS and Credit


Suisse are increasingly creating specialised teams to address these family offices, using bankers from the institutional side, corporate finance and trading. This is a trend that will continue. I don’t think it’s reversible, I think it’s obligatory.” But getting this offer right is no


walk in the park, wealth advisers agree. “These banks have been quite successful, working with families across generations and jurisdictions,” says Ed Marshall, global head of the family office and high net worth practice at US law firm Dentons and himself a former


senior private banker at both Citi and Credit Suisse. “Integrating different parts of


the same banking organisation is a very easy exercise to do on a piece of paper. The proof will be in the pudding.” Moreover, it is not a universally


popular model, both among clients and industry voices. Some leading wealth firms believe having an investment bank within the group incentivises the sale of unnecessary products and services, incompatible with a family’s financial needs. “We actually think it’s a conflict


to have an investment bank when you’re trying to be a wealth adviser,” says Northern Trust’s Mr Fox. “You have to wonder which side of the transaction some of these banks are really on at the end of the day.” Northern Trust prefers to bring


together a “knowledge exchange” of 600 wealthy families, sharing “intellectualDNA” via a “vendor- free experience”.


CULTURAL FIT Other banks in different geographical regions believe the cultural fit of bankers ismuch more important than their ability to push products. “In the past, itwas very easy for


our bankers to manage investments on autopilot, with one or two calls each quarter to the family,” says LeeWoon Shiu, regional head of wealth planning, family office and insurance solutions at DBS Private Bank in Singapore. “But in these days of Covid, with things moving at such a rapid pace, itmakes sense to have closer contact with bankers.” The Asian approach to families


differs fromtheWestern, with Mr Lee himself leading the “outreach” tomajor client prospects, before


FIG 2


GREATESTCHALLENGETOGROWTHOFFAMILY BUSINESSES


Technological disruption Insufficient cash flow


Lack of skilled talent


Increasing production costs Sluggish demand


New market entrants Cyber threats


05 10 15 20 25 30 35 2017


Per cent 2018 Source: DBS Private Bank/EY: The Asian Family Office


accounts are allocated to key bankers, based primarily on geographical location and expertise. “Our Chinese teamis fromChina


and wewould allocate one of them with the same values towork with a key client,” comments Mr Lee. “For us, this cultural affinity is paramount. It’s not just about getting someonewho is very senior and very good at investments.We have to find somebodywho can understandwhat clients fromthat region need andwhat is in their interests.” His clients, typically coming


fromChina, Indonesia, Malaysia, the Philippines and Thailand, have been speaking to the bank about a broader number of topics, including educational planning and risk diversification as well as portfolio management.Western clients are also looking to dip their toes in Asian waters, keen to assess the level of expertise available in Singapore, nowmarketing itself internationally as an attractive hub for wealthy


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