A survey of Julius Baer relationship managers highlights both the opportunities and challenges for intermediaries at a time of significant change. What are the growth outlook and the challenges ahead?
Technology and generation change
Leaving aside the younger markets that are still expanding quickly, what should EAMs in developed markets do to adapt to the new challenges they face – how can they rethink, reset and refresh? As our survey tells us, mergers and acquisitions are expected in the next few years to build the scale needed to spread the costs of regulatory compliance. But, beyond that, where are the new ideas?
Younger clients familiar with new technology-based investment services see less value in traditional investment services. But EAMs can remain relevant by refreshing their offerings across a broader range of products, including sustainable investments, private markets and cryptocurrency, asserted some survey interviewees. What’s more, wealth planning can build a bridge to a family’s next generation.
“EAMs must either innovate regarding their service portfolio or become specialists in certain areas,” asserts Bader from the Alliance of Swiss Wealth Managers. He adds: “One of the main challenges for an EAM is generation change. Not only on the side of the clients but also on the side of the relationship managers. Both aspects of generation change have to be balanced in harmony.”
Fewer, closer bank relationships
A surprising finding from our survey was that the custodian banks serving EAMs cannot escape consolidation. Under pressure to cut costs, EAMs in Switzerland and the EU are looking to reduce the number of custodian banks they work with. As they do so, they will prioritise service quality and commitment to technology.
But the few banking partners that EAMs retain relationships with seem likely to become close partners – whether in providing the evolving range of products and services required, or helping with the technology.
- Financial service providers are playing a key role in the allocation of capital to sustainable economic activities.
- The EU is setting the standards for sustainable finance, while Switzerland is predominantly relying on self-regulation by the financial industry.
- Both EU regulation and the Swiss self-regulatory guidelines will likely impact Swiss financial service providers. A thorough situation analysis at an early stage is key for keeping track of market standards and client expectations.