At a time when many wealth managers are cutting back on local personnel, Pictet sees on-the-ground presence as essential in order to be closer to clients.
This strategy becomes apparent when you enter the firm’s offices in Zurich, housed in the Leuenhof, a 105-year-old bank building, which the Geneva-headquartered bank lovingly renovated a couple of years ago.
Wood panelling and carefully-placed artwork are all sending the message: We are here to stay and we intend to make a mark.
Victor Aerni, the group’s head of wealth management in Zurich, said although clients need digital support, it is equally important for them to know how highly the bank is rated, who runs it, and who the CEO is of the local branch.
‘In Germany we compete, among others, with Deutsche Bank and offer wealth management out of Germany rather than Switzerland. If you are not there – you are often seen as the second choice.’
The wealth manager provides digital solutions, such as Pictet Connect, which allows users to slice and dice information about their accounts in various ways, but it is not targeting clients who want to do everything on their own.
More than 14 years ago, during his time with Boston Consulting Group, Aerni looked at the needs of different client groups and how involved they wanted to be in the wealth management process.
He admits Pictet is excellent for delegators but probably not the bank of choice for someone who wants to do everything on their own.
‘We will never be Coinbase, we are Pictet, and if someone wants to trade the whole day online – you can go to an online broker for that,’ he said.
Focus on organic growth
Aerni said the bank is still growing organically and will continue hiring next year, both in private banking and support functions.
According to the firm’s 2021 annual review, the number of bankers in its wealth management division has decreased year-on-year, shrinking from 363 to 355, which was probably linked to the departure of managing partner Boris Collardi. This decline, however, belies the growth that preceded it.
The bank has made no acquisitions in its entire 217-year long history, be it in wealth or asset management.
‘It is a sign that we have a distinct culture, where we want to grow step by step with the right values, rather than for growth’s sake,’ Aerni said.
Pictet has 220 employees in the Zurich office alone, where it moved 18 months ago, but there is space for 300. Rather than targeting specific geographies, the wealth management team will maintain their focus on hiring talented individuals when opportunities arise.
‘We are privately held, so we don’t need to say we are planning to add 80 people within the next 12 months. If we find the right match and talent we will have more people in this building faster.’
Aerni said the periods of uncertainty are the best times for the firm to hire because this is when good people sometimes don’t get the right support or don’t see the strategy behind opportunistic hiring or firing.
He is also not in a rush to go after bankers at companies going through rough patches, be it Credit Suisse or any other peers in the market.
‘It is not like we would say: “Okay this bank is having issues now, let’s go after the top people there.” It is not the way we do business.’
Promoting from within
Aside from hiring teams outside of the organisation, one of the latest improvements for the group was better internal mobility.
A case in point is head of fund selection Mussie Kidane, who is now the CIO for the firm’s North American Advisors unit. Aerni has been working with Kidane and the team closely whenever third-party funds are required for client portfolios.
‘Maybe in the past you would have said: “I don’t see my next opportunity within the bank and have to go to a competitor.” With my hat of a former consultant on, I think having better internal mobility is great.’
Another sea change for the group, which has now exceeded a total headcount of 5,000, is looking for younger, less experienced hires.
‘There aren’t many experienced people out there to hire, and everybody is fighting for the few that are available at a given moment. That’s why we are increasingly hiring young people.’
This also helps build a bridge with millennial clients, who are often misunderstood by traditional wealth managers.
Aerni said the younger generation of bankers is more likely to put forward the group’s research on crypto assets in front of millennial clients for example.
‘Maybe some senior bankers would just put it to one side, while younger ones would suggest reading it. It all starts with knowing the topics of interest for the younger generation.’
Servicing millennials
However, Pictet is wary about generalising millennials and realises that in one family you can have two siblings one year apart with opposite views on digital assets.
For many younger clients the ‘passion project’ is to launch their next firm, rather than being their own private banker for the next 50 years.
‘They are digital natives and like business models based on those principles. But they also make money as entrepreneurs, which doesn’t mean they want to do private banking themselves.
‘It would be wrong to say millennials equal crypto. I think they are much more interested in new business models, like blockchain, and thinking about what they can do to disrupt the world, be it biotech or developing a new app,’ Aerni said.
Be it traditional or next-generation clients, Aerni is convinced Pictet can offer something that its peers rarely can.
The firm is a privately held partnership with the owners still very much involved in its day-to-day running, which was a draw when he joined all those years back.
‘Pictet is a partnership of entrepreneurs who are active at the firm. They don’t sit in Saint-Tropez the whole year and only occasionally check on us, they are working alongside us and their own clients.’