After 31 years in Singapore working within private banking and wealth management, Urs Brutsch has seen the industry develop from a small sector with just a few international private banks in the mid-1980s, to a very large business today.
Yet the model has evolved into one which he describes as being more like that of a brokerage. And he sees a common approach by most private banks akin to a distribution pipeline for their products, rather than providing holistic advice.
As managing partner and founder of HP Wealth Management, an independent firm, Brutsch hopes to see changes within the industry as a whole in Singapore over the next few years.
Being more sustainable
He judges the quality of a private banker by the advice provided – including on investments, wealth planning and private market ideas. But he also says it is important for bankers not to price themselves in a way that tries to hide fees, given that clients are increasingly sophisticated.
This is also part of developing a long-term, sustainable relationship with clients.
Brutsch says that clients must first and foremost trust their banker, but this takes time to be earned. And it requires bankers to be experienced, as a result of living through market crashes and crises. Clients realise when their banker brings investment ideas to them that make sense and are aligned with their risk profile, he adds. Plus, clients should ask a lot of questions around fees.
Brutsch also sees most private banks as not being very transparent, for example when it comes to the fees around structured products, or when they recommend the retail share class of funds from third-party fund houses even when a client should be getting an institutional share class.