New Pictet partner Boris Collardi is breaking with a long-held tradition of Switzerland's banquiers privés. The shift is emblematic of wider changes in private banking.
The unspoken agreement by Geneva's private bank held for generations: partner-led firms like Pictet, Lombard Odier, Mirabaud, and Bordier didn't poach from each other. Boris Collardi is changing that: the newest Pictet partner has hit the phones to try and recruit private bankers – including ones at his biggest hometown rival, Lombard Odier.
The break with centuries-old traditions illustrate that even the most genteel and refined of Geneva's private banks are under immense pressure to grow. Pictet's assets stood at 512 billion Swiss francs ($514.8 billion) at year end, and Lombard Odier 274 billion – including asset management, which at Pictet makes for nearly 200 billion francs in assets.
Cramped Market
Growth on this order in the cramped Genevan labor market inevitably means that the private banks step on each other toes. As the largest by assets and employees, Pictet unsurprisingly is the first to move.
The Swiss bank's newfound brashness is linked to Collardi: such a move remains unthinkable at the competition, and at especially smaller, conservative houses like Mirabaud or the five remaining true banquiers privés like 173-year-old Bordier. A true privé, a term which the Swiss banking lobby trademarked nearly 20 years ago, vouches for the business of «his house» with his personal fortune (there have been very few female partners, and almost none who aren't scions of banking dynasties).
Despite the changing world, the privés – motto: «respect et liberté» – are sticking with their tried and tested model of refined coexistence. Data shows how loyal private bank staff are: Pictet suffered a 6.5 percent rate of fluctuation last year, a relatively low reading in financial services. In other words, the wealth manager has to hire at least 260 people ever year in order not to shrink.
Swiss Adviser Churn?
Collardi's fellow Partner Renaud de Planta, who joined the bank as an outsider in 1998, said last month that Pictet doesn't wish to harm any competitors by poaching staff. The international wealth market is big enough to accommodate the occasional exit to a Swiss competitor, but Geneva is tiny by comparison. Should competition for clients intensify, the banks' own growth plans could backfire.
A glance at the U.S. illustrates what an extremely competitive labor market looks like: U.S. brokers are paid handsomely for their – often short-lived – loyalty. The system rewards advisers, more than clients, and bank profits suffer from inflated salaries and pay-offs. The stability-focused Swiss brand of private banking couldn't stomach rampant staff churning.
