The key theme emerging from, and running through, many of the
discussions at the Marketforce and IEA 10th "The
Future of Private Banking" conference held in October 2012 is
change. In particular, that there are many challenges facing
the private banking industry which are key drivers for
change. These include: (i) The changing demographics of
clients at both ends of the spectrum, with increased longevity but
also increased wealth creation at a younger age and the very
different needs of these clients. (ii) Markets are more
complex with ever increasing global relationships and pressure from
low returns. (iii) There is also fierce competition with new
entrants and established institutions seeking to build market
share. (iv) Finally, increased and changing regulation, on a
domestic level (including RDR and the handover of reins to the FCA)
and globally, bringing expectations of better professionalism,
transparency and stricter compliance.
Whilst there was a harmonious voice in identifying and recognising
these catalysts for change, it was also clear that there is not a
unified response to the challenges. There were strong
differences of views as to whether a move to advisory services
(with the stated aim of moving away from product-led relationships
and of offering clients greater choice and control) is an
appropriate response in the best interests of clients, or whether
this is best met through discretionary only services. Changes to
remuneration packages for private bankers were discussed; as were
the steps taken by institutions to differentiate themselves through
geography, focus on different categories of wealthy individuals and
/ or different approaches to segmentation.
However, one key response identified was the need to rebuild trust between private bankers and their customers.
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