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The words “wealth management” often raise more questions than it answers. So, we compiled some of the most asked questions on the subject and reached out to Alpian’s Senior Banking Specialist Jacques Sale, and Business Development Lead, Mattia Scolaro, to shed some light on the answers. 

What do you mean by “Private Banking”?  

Mattia: Hi! That’s a great question to kick things off. Wealth management can be complex, and it’s part of our job to make things clear.  

Private banking requires the understanding and empathy that only another human being can offer.

Private Banking refers first of all to a set of services dedicated to managing clients’ wealth with the highest standards and personalization. This could include discretionary and advisory solutions (more on this in the next question). A private banker aims to understand their client’s financial situation, needs, objectives, and future life ambitions. All this information is analyzed before offering a tailored financial and investment strategy, to offer the best wealth management solution. 

As you can see, private banking requires the understanding and empathy that only another human being can offer. It’s why private banking relationships are often managed with the support of an experienced banker. It is also worth noting that in Switzerland, and around the world, clients require a sizeable minimum deposit to qualify for most private banking services. 

What is the difference between discretionary asset management and financial advisory solutions?  

Mattia: As I mentioned, discretionary and advisory solutions are investment solutions offered in private banking services. In a discretionary solution, the bank invests on the client’s behalf after completing its risk assessment and defining the strategy to follow for its portfolio. This solution offers a professionally managed portfolio that benefits from the insights and reactivity of the bank’s investment team. In this approach, clients are not part of the decision-making process and do not need dedicated time to manage their wealth. 

On the other hand, an advisory solution only offers recommendations on how to invest. The client has to take the final decision. This approach requires more client involvement, and we usually follow up to point out new opportunities and to ensure that their portfolio stays aligned with their strategy. 

What investment strategies do Swiss asset management services offer?  

Mattia: Banks usually offer 4 to 5 strategies that correspond to the client’s risk profile. Each strategy is composed differently. The result of this composition is called asset allocation. For example, if you have a more aggressive strategy – one that aims to offer a better return – it would be advisable to have more equities in your asset allocation (link with the glossary to add). And you would be advised to stay invested for a longer time. 

At Alpian, we offer an indefinite number of strategies to ensure that the client’s portfolio is fully tailored and aligned with their needs. This approach tends to differ from traditional offerings, as Alpian creates a unique strategy only once the client completes their investor profile.  

What are the differences between asset management services and online trading? 

Jacques: As the name might suggest, an asset management service is usually a company or a professional managing your asset (liquidities) following a given mandate based on your risk profile, preferences and expectations.

The fiduciary duty (stewardship) guides an asset manager. This means that an asset management service aims to invest your wealth in a way that serves your best interest in the long term. In this relationship, your involvement is limited – the asset manager will decide the most suitable investment based on your strategy. 

In contrast, online trading services don’t usually offer expert support for investment decisions. You decide what to buy and sell based on your competence, emotions, and other factors. 

How are conventional asset managers different from robo-advisors? 

Jacques: A robo-advisor gives you automated investment advice based on your strategy. It considers market data and market sentiment and combines them with your inputs to formulate its advice. Essentially, there is no interaction with any human beings, and the advice is sent to you digitally. 

The freedom to think outside the robo-advisor’s framework lets them evaluate other factors to sharpen the advice they finally offer. These could include the impact of political events, macroeconomic dynamics, and even human feelings.

A conventional asset manager is a professional that – based on experience, competencies, and knowledge – provides you with investment advice. Many asset managers begin with the analysis of a robo-advisor but go further. The freedom to think outside the robo-advisor’s framework lets them evaluate other factors to sharpen the advice they finally offer. These could include the impact of political events, macroeconomic dynamics, and even human feelings. In either case, the framework of your investment strategy is respected, and the advice given aims to align with your best interest. 

Can I customize my investment portfolio? 

Jacques: Generally, to be able to do that you have two choices:

  1. Invest at least several million into a mandate, or 
  2. Pay a higher fee for the customization. 

The first case is typical of a private bank. Traditional banks usually offer you a standardized strategy matching your investment profile. Often, they assign you a profile for which a standard pre-build strategy is already in place. And these pre-built strategies cannot be adjusted to your preferences. 

Of late, some investment solutions are shifting away from this cluster approach, trying to offer more tailored strategies to their clients. After all, every client is different and all of them have different goals and objectives, and interests. So, don’t they deserve a personalized strategy? 

Thank you, Mattia and Jacques, for taking the time to answer our questions.

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The content of any publication on this website is for informational purposes only.

About the author

Driven by a need for clarity and simplicity on all things wealth related, the i-vest team works closely with senior financial experts and advisors to dive deeper into the world of finance, investment and wealth to make it more relevant for you.

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