Comment: Old world of private banking is back in fashion
Europe, where private banking was born, looks to be coming back in vogue with private banks.
In the last week four wealth managers launched initiatives in the region, attempting to make further inroads into Europe’s wealth.
SG Private Banking has announced a regional wealth management initiative throughout France, which includes opening offices in Bordeaux, Marseille and Lyon by September 2008, followed by Lille, Strasbourg and Rennes in 2009.
Bank Sarasin said it was upgrading its office in Lugano – the Swiss town just across the border from Italy – to take advantage of a surge in new business there.
Vontobel said it planned to beef up its operations in Germany, Italy and Spain, as well as Eastern Europe after experiences strong growth in all these countries.
And Barclays Wealth continues with its UK regional growth efforts by opening an office in Liverpool this week.
The news is refreshing, given the huge surge in emerging market wealth in the last few years that looked to be eclipsing Europe’s significance in the global wealth stakes – an importance it has had since the early 1800s when Switzerland’s – and the world’s – first private banks were established.
But in reality, Europe looks to have lost none of its wealth sheen and is unlikely to do so in the years ahead because of the following trends.
Firstly, private banks are developing regional strategies in their home countries as they see a chance to capture local wealth from the retail banks – hence, SG Private Banking initiative in France and Barclays Wealth efforts throughout the UK.
Secondly, the slowdown in Europe might not be as serious as first thought. The German economy looks to be robust, as does the French. The UK, Italy and Spain are the laggards, but these three economies could yet avoid a recession. Also, wealth managers will want to be well placed when the upturn takes place in Europe.
Thirdly, Europe will always be the playground of the world’s wealthy – and the growth of emerging market wealth only will add to this image. Whether multi-millionaires are from Brazil, China, or Russia – most will want to spend at least some of their time in Europe rich hotspots such as the South of France, London’s West End, or Swiss ski resorts. Many will also want to do their banking in these locations in between their shopping sprees.
Lastly, competition among wealth managers is healthier than ever in Europe – and the credit crunch has only enhanced the trend. Concerns over the health of UBS, the world’s biggest wealth manager, and the Northern Rock crisis in the UK, has spurned much of this competition.
Those wealth managers perceived to be more “trustworthy” are benefiting from this trend, but all private banks are trying to reassure clients more than ever.
del.icio.us
Digg
Newsvine
reddit
StumbleUpon