Latin America: sprawling and emerging
Beatriz Sanchez, Head Latin America at Julius Baer, shares her thoughts and experiences in this dynamic and very diverse region.
Ms Sanchez, you have been a member of the Executive Board and Head Latin America at Julius Baer since the end of 2017. What do you think sets the Bank apart from its competitors in the region?
One of the biggest factors is that we are a pure play private bank. All of our resources are dedicated to helping clients manage and grow their wealth in a way that gives them peace of mind and the ability to pass that wealth on to future generations. Another important differentiator, particularly in Latin America, is our very holistic approach. If a client is entrusting their wealth to us, we have to really understand who they are, their situation, and what their goals are in order to be a true partner to them.
Why is Latin America an important market for the Bank?
The demographics make clear sense. Latin America is seeing strong economic development, and has a growing, better-educated middle class. People are living better. It’s a young region with more and more entrepreneurs, so the potential for wealth creation is high.
There is also an increasing number of women coming into the workforce, and many are inheriting or managing wealth. As a matter of fact, we are now for the first time seeing that most of the entrepreneurs coming out of the region are women. This is a very exciting area that we are exploring.
What makes the region distinctive?
The diversity: every country is so different, and proud of its history, culture, food, music, and football team. To be successful in the region, you have to understand that a Brazilian speaks a very different language and has a very different colonial past and culture from, say, an Argentinian. It never gets boring, because you also need to understand the political, social, and economic realities of where the client is sitting, as well as the global factors that could change that reality. For the Latin American market, it’s important to be a specialist as well as a generalist.
How would you describe the needs of your clients?
Their needs are relatively complex. They are looking for holistic advice, but specifically also how to balance domestic risk with offshore exposure. They want to know how to manage currency risks, and when to hedge their bets if the situation in their country is becoming uncertain.
Also, many clients in Latin America are looking for the next great idea. Julius Baer’s expertise in megatrends, such as developments in alternatives to fossil fuels and electric mobility, means we can help them find that idea. And because the region is home to very congested and contaminated cities like São Paulo, Santiago de Chile, and Mexico City, many of these themes really resonate with our clients.
Are there any identifiable industry trends in Latin America?
We are seeing significant growth in the multi-custodial independent wealth management business. Local banks often dominate the domestic markets, but they don’t necessarily have the same breadth or depth of plat-forms, products, and advice.
As a result, there is a lot of added value in being able to say to a client: “Keep your assets with your local bank, but we will come and sit on your side of the table, advise you, and bring you a world view that a local provider alone might not be able to offer.”
What are your main goals as Head of Latin America?
We are already firmly positioned among the top 10 international wealth managers in Latin America. My number one goal is to improve on this position and become the reference for pure play private banking in the region. Second, Latin America is very competitive, so we aim to be the employer of choice for wealth management. And number three, we want to be seen as true partners. By having a long-term relationship with our clients, we can work with them and bring more than just financial value. We can make introductions and give them new ideas as well as access to resources they would not have otherwise.
If we want to achieve these goals, we have to combine local proximity with our international expertise under the umbrella of a transparent, straightforward set-up. We also have to keep a firm focus on the markets we want to invest and grow in.
Which markets in Latin America do you intend to focus on?
We have been looking at our regional footprint in Latin America very closely since I started and realised that, in order to achieve our long-term goals, we need to focus on our key markets. We see the greatest potential in Brazil, Mexico, Argentina, Chile, and Colombia. Brazil and Mexico are the markets with the greatest growth potential, followed by Argentina, while Chile and Colombia are our opportunity markets. To be able to concentrate on these key markets, we had to let go of others, which is why we decided to close our offices in Peru and Panama.
How is Julius Baer preparing for the next generation of investors in Latin America?
A very big change in the generational control of wealth is starting to take place and we want to be at the forefront of that. Events like the Formula E allow us to capture the attention of the next generation and show them that we are attuned to the big questions affecting their future lives on this planet. Latin America was host to three races this year. They served as a great platform, not just in terms of entertainment, but more importantly for talking to the next generation about timely issues and the next big trends.
Another initiative we are planning internally is reverse mentoring. Employees over a certain age are going to be mentored by millennials working at Julius Baer. The idea is to keep us fresh, tuned in, and help us get a sense of how to use social media and generally to better connect with our next generation of clients.
‘Living better’ is the topic of the latest edition of our VISION magazine. What does ‘living better’ mean to you?
I think at the deepest level, living better just means being at peace with your priorities, with what you’re doing and the direction your life has taken. But it is also about giving back.
I was born in Cuba, so one of the things I focus on is helping people there. I spend a lot of time working with civic society, teaching people entrepreneurial skills. I also back a local microfinance fund that finances very small, primitive businesses in Cuba, and provides people with opportunities to make a living and a life for themselves.