Being prepared for more demanding customers
Although the easy days are gone, the Luxembourg private banking industry is well prepared for the future. At an increasing number of banks, the stage is set for meeting the needs of a demanding clientele. This is Peter Aelbers’ analysis, country manager at ABN AMRO Bank Luxembourg. In an interview with LFF, he talks about trends in private banking and the profile of today’s private banker.
LFF: Is the financial crisis an opportunity for the Luxembourg banking industry to show its strengths?
P.A.: The opportunity lies in the fact that the high quality and stability in the financial sector is appreciated by clients who are looking very much for safety after the events of the crisis.
LFF: What is the tendency today? Have investors turned their back on sophistication and do they ask for simple and straightforward products they can understand?
P.A.: Investors ask for full transparency rather than for simplicity. The investor wants to understand the product rather than trusting a "black box" with a good past track record.
LFF: Luxembourg is under pressure regarding the future of banking secrecy. This climate of insecurity about the future is certainly not ideal to do business. How do you cope with this?
P.A.: Banking secrecy is not really the issue for the clients Luxembourg wants to attract today, but confidentiality is. Luxembourg is committed to continue to protect the confidentiality of its customers and to find common ground in the EU for a fair taxation without losing out on this confidentiality.
LFF: What does the profile of a private banker have to look like nowadays compared with the one five or ten years ago?
P.A.: Today a Private Banker is expected to have a profound knowledge of financial planning, international structuring and estate planning across the countries where his/her clients come from and where they have their investments or domicile. A Private Banker has to travel more for business than in the past. For these reasons investment advice today should be handled by professionals who assist the Private Banker in the relationships.
LFF: Mobile citizens are optimistic about their future, be it their family or their business. They are demanding with themselves and with their service partners, including private bankers. Are Luxembourg bankers prepared for this demanding clientele?
P.A.: At an increasing number of banks, Private Bankers are indeed prepared for this demanding clientele. And since this is a corner stone of our business model (now and in the future), Luxembourg banks should ensure proper education and development to this extent.
LFF: Does Luxembourg really have a competitive advantage when it comes to accompanying the internationalization of companies?
P.A.: It has indeed, because of its structuring possibilities and its tax treaties with a lot of jurisdictions. It is not a coincidence that large corporations use Luxembourg as their financial hub.
LFF: How optimistic are you about the future of private banking in Luxembourg?
P.A.: Very optimistic when it comes to defined service offering and added value -- if we are prepared to invest in this. However, the easy days are gone. Today we have a demand for sophisticated service delivery, but at lower margins than in the past.