From its highest mountain, the Zugspitze in southern Bavaria, to the white sands of the Island of Sylt bathed by the North Sea at its most northern point, Germany is varied not only in geography but also in culture, business, and wealth-client needs.

The Eurozone’s largest country by population and economy, some 45 per cent bigger than second-biggest France, Germany also ranks as one of the world’s top four countries in high net worth population, according to the Capgemini World Wealth report, where it lines up alongside heavyweights such as the United States, Japan, and China.

“Germany’s wealth management market and clientele stand out in Europe and not just due to its sheer size. While most European countries have their wealth centred around their capital cities, Germany’s economic history was built on its exceptionally strong mid-cap companies, often founded and still controlled by families that are spread throughout the country,” explains Patrick Prinz, Sub-Region Head Germany and Austria of Julius Baer, a Swiss who has been covering the German wealth market for more than twenty years.

Wide business roots
Located in the heart of Europe, Germany’s economy and administration is more decentralised than its neighbours due to the strength and history of its states that were unified only relatively late in comparison to the rest of Europe, after the Franco–Prussian War of 1870–71. In turn, the wealth and breadth of the economy was bolstered by the Mittelstand. They account for the largest share of Germany’s economic output, employ about 60 per cent of all workers, provide crucial training, and contribute significantly to corporate tax revenues.  

Germany’s burgeoning start-up scene by comparison is relatively new. Originally mushrooming around Berlin, it has spread to other centres such as the Bavarian capital of Munich. “The German wealth market is one of the most dynamic and diverse in Europe, and this translates into varied and complex wealth management needs,” Prinz adds.

According to a McKinsey report published in 2021, German banks lost sizeable market share in terms of revenues to foreign banks, including European and US players. While still dominating retail banking with an 80 per cent share, German banks retained only a minority of the market in investment banking and wealth and asset management, with shares of about 20 per cent and 45 per cent, respectively.

Broad presence
Julius Baer has been present in Germany for more than 30 years and currently has offices in Berlin, Düsseldorf, Hamburg, Hannover, Kiel, Mannheim, Munich, Stuttgart, and Würzburg, alongside its German headquarters in Frankfurt am Main, the financial capital. The locally regulated Bank Julius Baer Deutschland AG has held its local banking licence since 1989. Julius Baer also serves German clients out of other financial centres if requested for diversification purposes.

“Our Bank’s specialised focus on wealth management, with an emphasis on holistic expertise and advice, has been of particular appeal in Germany,” explains Heiko Schlag, CEO of Bank Julius Baer Deutschland AG for more than a decade. He adds that the Bank’s expert offering has helped Julius Baer not only become one of the most successful wealth managers in Germany but also further built on its strength and stability.

“We are very customer centric. Our customers are at the centre of our thoughts and actions, and we take into account what is really important to them – in business and in their private lives, today and for future generations,” adds Schlag.

Julius Baer Group’s results in the past years have further reinforced the resilience and strength of the focused wealth management business model it has opted to follow and underlines the Group’s prudent management style. This is key in navigating through short-term difficulties as well as for its long-term success.

 Julius Baer’s Swiss roots have also played a role in the Bank’s local success. “Neighbouring Germans and Swiss have a long-standing respect for each other. Our economies are heavily interlinked as is our culture,” adds Prinz. “This reciprocal trust has played a key role in our relationships over the years and will without a doubt continue in the long term.”

Multi-generational families
Wealth management in Germany is highly regulated, with financially educated and knowledgeable clients seeking a long-term partner. Many multigenerational families and businesses in Germany are now international and spread across continents let alone different countries. This means they seek more complex support and guidance to ensure and protect the next generation’s financial future and regularly require cross-border experts.

Germany’s successful young tech entrepreneurs also have distinct wealth management needs and desires. They may seek a long-term partner to guide them in decisions about how to finance their venture and what happens at the next stages of their business cycles. This means they may have an eye on international expansion and seek the support, experience and access to the necessary knowledge needed to take these next steps.

Sustainability and philanthropy
These “younger” clients – but not only – are also more interested in ensuring that their investments take into consideration environmental, social, and governance (ESG) criteria. The Cap Gemini World Wealth report also indicates that 55 per cent of high-net-worth individuals globally say investing in causes with positive ESG impact is critical, and this per centage increases up to 66 per cent when looking at Europe alone.

At Julius Baer, sustainability is not only a key part of the client value proposition but also a part of its own strategy. That’s why a data-driven and thorough framework to estimate ESG strengths and weaknesses in financial instruments has been developed by the Bank.

Social responsibility, cultural engagement, and philanthropy have also gained popularity in recent years. Germany has its own Julius Baer Foundation, Julius Bär Stiftung Deutschland, which was established in Frankfurt in 2019. It focuses its activities on three core charitable areas: supporting vocational training projects, reducing wealth and opportunity inequality, and promoting sustainable alternatives to the use of plastic.

The Foundation not only underlines Julius Baer’s long-term commitment to Germany but also reflects its own presence in the country: deeply ingrained in Germany but with a strong global outlook.