The Genevan wealth manager wants to grow in a niche Swiss segment. finews.com spoke to the banker Pictet poached from UBS to do so, and how coronavirus has complicated its plans.
When several hundred Pictet bankers move into the 105-year-old «Leuenhof» on Zurich’s tony Bahnhofstrasse early next year, Alain Gallati will be among those taking up residence.
The Swiss banker, a 25-year veteran of UBS, is one of a small team devoted to Pictet’s business with independent asset managers. IAMs represent a growing and potentially lucrative segment for wealth managers: 2,500 of the boutiques exist in Switzerland, managing an estimated $500 billion in client assets.
Poaching From UBS
Gallati told finews.com the Genevan bank has seen significant net inflows in the segment in recent months. «Zurich is a top priority for Pictet,» said the banker, who terms his move last year as leaving a process-driven giant in favor of a relationship-oriented one.
Since joining Pictet last June, Gallati has hired ex-colleagues Luca Bornatico and Giovanni Cristofaro as well as Nadine Bersier (ex-Zuercher Kantonalbank) to bring the Zurich-based team to 12 people, along with 36 bankers in Geneva.
Genevan Strength vs Zurich Growth
Pictet is vesting considerable hope into the Zurich office: while the bank is among the top names for EAMs in Geneva, it has room to grow across the «roesti ditch», the imaginary but highly symbolic border between Switzerland's German- and French-speaking regions.
The coronavirus pandemic complicates Gallati’s plans – but doesn't cancel them. The bank is a net winner of what bankers term a flight to safety in the form of solidity, he noted.
Cuts As a Bad Omen
This is especially true against the backdrop of sudden and dramatic cost cuts for rivals. «For good client advisers, cost cuts are an unfavorable sign,» he said, noting that Pictet may snap up hires in the crisis.
The IAM business is one of the last bastions of extreme individuality for bankers: each boutique – which may be as small as one or two people – needs a highly distinctive business model. Banks like Pictet simply act as service station to execute transactions.
Encroaching On Turf
The business has long been dominated by UBS and Credit Suisse, which can easily afford to undercut their smaller rivals on pricing because of their size and volume. Cantonal lenders, backed by state guarantees, have increasingly encroached into the IAM turf.
Private banks like Pictet are the latest to discover IAMs as a lucrative source of revenue with little investment in infrastructure required. Gallati said the bank wants to differentiate itself from the crowd with 24-hour trading, a versatile booking platform, simplified account opening, baking sustainable investment criteria into portfolios.
