Banque Marcuard was founded in 1746, placing it among the longest-standing private banks in Switzerland and Europe. It traces its present structure back to 1991, with the establishment of new Marcuard family offices. Philippe Rudloff founded the Geneva-based wealth management services group Atlantis Marcuard in 2016.

Rudloff exchanges his views on building on the bank’s three century wealth management pedigree with Lily Zhu, managing director of OMFIF’s Wealth Strategy Institute. Much of this discussion focuses on how a smaller, independent firm can continue to prosper in an increasingly competitive market pressured by rising costs and diminishing margins.

KEY SESSION HIGHLIGHTS:

· Marcuard’s independence gives it a number of competitive advantages over larger firms, allowing it to maintain an open-source model. This is aimed at serving the clients’ best interests, even if these are less profitable for Marcuard itself.

· One of the most obvious changes in the wealth management industry over recent years has been its increased dependence on technology. Some wealth managers have used technology to achieve economies of scale by deemphasising and even eliminating the role of the relationship manager.

· This is the antithesis of the Marcuard philosophy, which for centuries has regarded relationships as the lifeblood of its business. ‘I use technology; but the relationship manager remains at the centre of our business,’ says Rudloff. ‘So, unlike many firms, we are empowering our relationship managers and giving them more freedoms.’

· While this may be a costly model, it has rewarded Marcuard by helping it to win and retain clients. ‘In a global market the bulge bracket banks have the scale which allows them to be extremely price competitive,’ says Rudloff. ‘But there have been plenty of occasions in my professional career when I’ve beaten the big banks because I was more reactive. So, I wouldn’t say the smaller guys are necessarily winning, but I believe there is space for everybody.’

· Marcuard’s focus on relationship-building is fundamental to the success of its international business. This is based on providing local services through its 10 offices around the world and respecting national cultures and sensitivities.

· For a relatively small, independent wealth management specialist, there are drawbacks as well as advantages associated with technology. It allows wealth managers to reach clients quickly through social media and other digital channels. But data overload generates challenges, requiring wealth managers to filter a glut of information to ensure that clients receive material that is relevant to them.

· As a result, among large managers as well as smaller firms, data may be more useful for addressing compliance and auditing requirements than it is for end-clients.

· Along with it maintaining close personal relationships, Marcuard’s clients value its adaptability based on a recognition that clients’ demands and expectations evolve as they age. They also welcome the diversity of its product range and its ability to shield clients from the sometimes intrusive attention of regulators.

· While women are a fast-growing segment of Marcuard’s client base, now accounting for about 50%, Rudloff does not believe their requirements are materially different from those of the firm’s male clients.

· Remaining loyal to core values that have stood the test of time should not be confused with nepotism. It is notable that partners in Geneva’s oldest private banks, Pictet and Lombard Odier, are no longer being drawn from descendants of the founding families, nor even from a demographic with a similar cultural background.

· Growth at a firm the size of Marcuard is inevitably constrained by the depth of its team of relationship managers. Constructing a wealth management model around relationships can also be a source of risk, given managers’ freedom to walk away and take clients with them.

· Given how pivotal relationships are to the Marcuard philosophy, the enforcement of social distancing during the pandemic was another constraint. In spite of this, Marcuard was able to grow – albeit at a slower pace – during the recent global public health crisis.